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Related topics: debt, debt reduction, credit card, credit counseling, Donna Freedman

Travis Pizel and his family enjoyed 14 years of good living: a custom-built home, shopping sprees, dinners out, plenty of toys for the kids, splendid vacations, new cars every four years.

"We just got into a mindset of 'We deserve it. We're going to do it,'" says Pizel, of Rochester, Minn.

He and his wife had "multiple" credit cards; he won't say how many. When forced to confront the debt, he was "absolutely shocked" to find they owed $109,000 -- almost as much as they earned in a year.

"When I added it up in my head," he says, "it was always around $60,000 or $70,000."

A shocking money realization is often triggered by a crisis, such as job loss or a change in interest rates. It may also develop as a feeling that something isn't right: "I make a decent salary, so where did it all go?"

Image: Donna Freedman

Donna Freedman

Or maybe it's a forehead-slapping epiphany: "If I'd signed up for the 401k when I got this job, I'd have three years of matched retirement savings by now!"

Your financial foul-up may be due to a simple lack of knowledge, i.e., growing up with no financial education or role models in handling money. The roots may be psychological, such a fear of money-related conflict. Or perhaps you simply followed the rampant consumerism you saw around you.

Whether you're overpaying for insurance or repeating your parents' financial mistakes, there's always a chance to start over. Read on to see how others dealt with their money blunders.

It's just hard to say 'no'

Pizel realized he was in the conflict-avoidance camp, unable to say "no" to anything his family wanted. "I didn't want to have that argument," says the 37-year-old computer programmer. "I didn't want to have that fight about money."

Then came a letter from the company that issued five of their credit cards, announcing that the minimum monthly payment would rise from 1% to 2.5% of the balances. This meant an extra $900 per month. Pizel knew they couldn't cover it.

He broke the news to his wife, who had no idea they owed so much, since he'd always handled the bills. This could have been a classic money-killing marriage issue. But they sought help from CareOne Credit Services, a debt management company. CareOne negotiated lower interest rates, and the Pizels are paying back the entire amount, at the rate of $2,489 per month for five years -- more than their mortgage payment.

Now, 18 months into the debt repayment program, Pizel has had a second shocking money realization: Overspending for 14 years meant contributing less, both then and now, to retirement and college funds.

"All those years lost . . ." he says.

These days, he shares their story on CareOne's "My Journey Out of Debt" blog. He wants others to learn not from their mistakes, but rather from their progress.

But I'm spending for the family!

Saying "no" can be especially hard when family is asking. Gwen R. gave her adult children money for 20 years. "Once you've helped them . . . it seems like they kind of expect it," says the coastal California resident.

She contributed thousands toward a grandchild's tuition because her son couldn't afford it. Until recently, she sent $500 a month to a divorced daughter with two children in college, stopping only because she felt the children's father should help more.

Gwen's daughter called with a suggestion that she said came from her attorney: Why didn't her mother give her money every month as part of her inheritance?

"I thought that was kind of tacky," says Gwen.

Now she gives money only occasionally -- and only if she feels she can afford it. "If I do it too much, they'll think that the Bank of Mom is open and they could get money any time they wanted."

Cynthia M., who lives in Southern California, frequently lent money to a daughter with a ne'er-do-well husband -- everything from a down payment on their first home to money for everyday expenses like utilities and groceries.

(Thinking of confronting a family member in a similar situation? Read this first: "Can you stop a money train wreck?")

"I could have done the tough-love thing, but I have grandkids who needed to eat," says Cynthia.

Five years ago, she decided the bailouts enabled her son-in-law to remain irresponsible. Ultimately the marriage ended; Cynthia's daughter, who held sole title to the home, sold it and returned every dime she had ever borrowed.

That money is now flowing back to Cynthia's daughter, to the tune of $1,000 per month -- the amount that the soon-to-be-ex-husband agreed to pay in support, but never has.

"She can't make it through the month on what she earns," says Cynthia. However, her daughter now has a careful budget -- if you need a simple one, try the 50-30-20 budget -- and she will stop accepting money as soon as she can make it on her own.