Things went on like this for a couple years. We didn't make a lot of progress on our debt, but some. We were still making two car payments but they were manageable. We had enough to provide necessities for our child. We decided to try and get pregnant again. The doctors recommended IVF. Our health insurance through the University would pay for all but $50, so we did it, and we conceived on the first try! And in late 2001, our second child, a girl, was born. And we started thinking that it was time to move into a larger place. A "starter" home, but something that didn't require a lot of repair because we didn't have the time, money, or skill to do that. And in 2002, we moved into a new construction home. It wasn't totally perfect - it had a small kitchen, it was basic builder features, etc. but it was a great first home.
Oh, also in 2002, I decided to go back to graduate school. I decided to get my masters in training and development & project management. It would make me more marketable. I was sure. My "old" student loans would go on hold, and the university would pay for half of my tuition, but we'd need more student loans to make up the difference. But it would fine. I was only taking a class each semester anyway at this point.
Our mortgage payment in the new house was more. Twice as much as the condo. But we were making more than we ever had too. Or course, we had the two kids now. And we had daycare now for two kids. But it would be o.k. And then, I decided, you know what, I never see these two kids of mine. And I asked my boss if I could go to part-time. He said Certainly. I would lose my benefits, including my tuition benefit, but my salary would be a VERY good part-time salary. So we decided to just go on my husband's health care plan. It would be o.k. But it wasn't. We would have been o.k. if we had only had to come up with the money for the mortgage, student loan payments, the two car payments, our credit card debt, our utilities, food, etc. since we were paying less for daycare. But have to ALSO come up with $650 a month for health and dental benefits through my husband's job was very difficult for us. (My oldest child has severe asthma. She was taking four different medications at this time, and she was hospitalized at least twice a year from the time she was born until she was 6.) But we were managing.
And then it got worse.
The University decided to lay off over 400 part-time employees (essentially any part-time staff that was on a yearly contract) in September 2003. Now, I went from good part-time money to no money. We tried to survive like that, but after a couple months, we had to cash out my retirement fund to live off of, but that was only going to last so long, since I'd lost over 50% by cashing it out. I'd started teaching preschool in the mornings out of my home to my oldest and just a couple other kids in January 2003. So I decided to expand it in the fall of 2003 and soon had 12 kids coming in the mornings for preschool. But I was making MUCH less than when I was working part-time. And I also discovered that I was pregnant with our third child in January 2004.
I didn't know how we were going to function. Paying our bills was going to be hard enough. But we were getting to the point of not being able to pay our health insurance premiums. And we were struggling to get food. And then, someone told me about the Illinois AllKids program (Medicaid). It would cover me during my pregnancy (my son was due in September of 2004) and it would cover the kids. We would have decent health coverage, especially the children, and excellent prescription coverage. We would qualify for WIC. It would be such a blessing, but should we do it? My husband had a job. I had a bachelors, and was working towards my masters. I had had good paying jobs in the past. I had had good, affordable, health and dental benefits in the past. My parents had always provided for me when I was a child and hadn't used any government assistance programs.
Ultimately, we decided to do it, for these and one other BIG reason. Our first tax/escrow payment came due (since you pay in arrears and they hadn't yet figured up what our tax/escrow would be for June 2002 to 2003, it wasn't until June 2004 that we got our first payment due.) and it was for MUCH MUCH more than we ever dreamed. And I'm sure that they explained it all to us when we originally signed papers in June 2002, but we were unprepared to suddenly come up with the $4500 bill that they wanted paid (payment due in 10 days or less, of course.) I spoke with the bank (in a semi-destraught voice, I'm sure) and they said that they could spread it out over 12 months. This still wasn't managable for us. So our banker recommended that we take a second mortgage to cover it. It would be an 80/20. The 20 would be at a fairly high interest rate (8%), but it would be fine. In a few years, we would be in a better place and we would put it back together in a traditional mortgage. Or when we sold the house in a year or two. It would be fine. So we decided to get a second mortgage.
And it was added to the already long list of bills - first mortgage, utilities, student loan payments for my husband, credit card payments (which of course, we could only afford the minimum; and we occassionally got cash advances which only compounded the problem.), food, etc. Maybe if we didn't have to also come up with almost $700 for health/dental/prescription coverage, we could survive. My husband was, and had been covered since I got laid off, through his employers plan for health and dental benefits, and it was free. And Medicaid would cover the rest of us. Surely, in a few months, by the time my son was born, we would be in a better place.
And then it got worse.
