The Power of Debt Freedom: Brian’s Story

Hey, friends! I’ve got a great treat for you today! My friend Brian from over at Debt Discipline has graciously agreed to share his personal story with Frugal Farmer readers. Brian and his family paid off over $109,000 in credit card debt in just over four years! As a token of my thanks for Brian sharing his story, I wrote a post on his site explaining how we got our kids on board with our own journey to debt freedom. If you want to read our post over at Debt Discipline, you can click here. But for now I hope Brian’s story will encourage you to never give up on your own financial goals. Welcome, Brian!

 

Our Story with Debt

When Laurie asked if I would guest post and share our story with debt I immediately said yes. I enjoy sharing our story. It’s not from a place of bragging or boasting about our accomplishments, but from a place of hopefulness that someone struggling with debt, or money issues will read it and get inspired to begin a journey of their own. This was not always the case for us.

When you have $109,000 of credit card debt hanging above your head and have no clue how you accumulated it, it’s not something you talk too much about with friends and family. Certainly, not with strangers. We lived beyond our means for years, always chasing minimum payments, and refinancing thinking that the next pay increase would fix our problem.

It never did as we continued to repeat the cycle of over-spending. We justified it by telling ourselves everyone does it. Everyone has credit card debt. Everyone takes a second mortgage to remodel. We work hard and our family deserves a nice week long vacation that we don’t have the cash for, but can afford on credit and worry about paying off later.

Recommended Reading: Six Lies Broke People Believe

We fell into these traps for ten plus years, never thinking for ourselves when it came to OUR money, just following in the footsteps of others, and never doing anything to change our behavior or education on the topic.

Rock Bottom Moment

Several years ago, my brother was about to be faced with having two children in college at the same time. We chatted about the fear he was facing about how he was going to pay for it all. I never said anything to him at the time, but I had an uneasy feeling for my family after that conversation. We have three children, twins and a younger sibling who were three years apart. We could have three in college at the same time. That fear faded as college was still eight years off,

Just a few months later as I planned our summer vacation, we reached a rock-bottom moment with our money. We had no available cash and we were close to our credit limits on the five credit cards we had. I attempted to extend the credit lines on each of the five cards but was unable to. Our debt to income ratio had ballooned and no company would extend our lines. That in hindsight was a blessing because it forced us into a corner.

Recommended Reading: Beating the “Broke” Mindset

I felt like I had let my family down. I was the one who handled the finances in the family and not being able to afford to take a vacation felt like I had let my wife and kids down. I explained the situation to my wife. I also suggested we need to make a change in the way we were handling our money. We did take a vacation that year; a staycation. We spent time as a family and did several local things that were free or inexpensive.

 

Breaking Bad Habits

After that weeklong family time I focused on educating myself on personal finance. I was positive there was some “get out of debt quick” plan that I was never taught in high school or college, Once I found it we could clean up the mess quickly,

What I found instead was a resource by the name of Dave Ramsey. I checked out his book, The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness from my local library and read it over a few days. I was humbled and inspired. How could I have overlooked these common-sense steps to handling money, but also felt inspired by examples of others in the book who had climbed out of debt.

The book that inspired Brian’s journey to debt free: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness

I took Dave’s plan to my wife and explained his baby steps. I believed that we could apply these steps and get out of debt too. It would take a family effort and changes in our spending, but the end goal would be amazing. We agreed to give it a try.

We started with a budget. We had to understand how much money we had coming in and how much we had going out. We organized all of our paystubs and bills on paper. We were shocked to see we were running at a small deficit each month.

We knew from the new-found information on money that there are two ways to address this problem, cut expenses and increase income. We began to cut expenses. We looked at things is our budget in two categories, a want or a need. We cut as many wants out of the budget as possible. Things like satellite radio, eating out, trips to the salon, travel, etc. That was an immediate step we were able to take and get our budget under control.

Our next step was to save a small emergency fund of $1000. Having cash on hand would prevent us from going back into debt when something unexpected happened, we carried that emergency fund for the entire time we repaid our debt. It covered unexpected things like flat tires, appliance breaking down, etc. along the way.

Recommended Reading: Six Mistakes Broke People Make

We later increased our income as my wife returned to work. We used the extra income to help pay down our debt faster. We also involved out three children in the money discussion in the house. There were going to be changes our spending, we would have to say “no” more often and we want them to understand the “why” behind it all.

The first three or four months were tough. Breaking those bad habits that we feel into for over ten years and mindlessly followed were going to take sacrifice and hard work to overcome. We fell into a routine after that and used the debt snowball method to pay down our $109k worth of debt in 50 months. There were many ups and downs along the way, but we never lost sight of the end goal of being debt free.

Debt Freedom

 We have been debt free for over two years now. Our life is totally different today, from when we had debt. We have less stress. There’s no fear when the unexpected happens because we have money in savings to cover it. It something breaks or we need to take a trip to see family we can. We communicate better as a family, and through working together to get out of debt we began having monthly meetings about our money. This type of planning and unity has carried over into other areas of our life. We are teaching our three children so much about handling money. They will be better prepared than we ever were at their age.

Recommended Reading: Love Your Life, Not Theirs: 7 Money Habits for Living the Life You Want

We have now moved on to building wealth and saving for college for our children.  We are not ashamed to share our story now, always leading with our failure first to let others know we have been there too. Both my wife and I are volunteering our time now too. Giving back in our community, helping others, and trying to spread the financial literacy message through the blog and speaking events.

If you are struggling with debt or getting your day-to-day finances under control it is so important to just start.

Recommended Reading: How and Why You Should Get Out of Debt NOW

The sooner you can begin, the better off you will be. Don’t get me wrong it will take hard work and sacrifice, but the good news is there are plenty of people who have gone through just what you are experiencing and are willing to help. I’d be more than happy to chat or e-mail any answer any questions you may have.

 

 

 

24 comments

  1. The Stoic says:

    Laurie– Thanks for sharing Brian’s story, it was inspiring! It was stories like these that helped inspire me to get out of debt several years ago.

    Brian–Thanks for sharing your story. It’s impressive the amount of debt you paid off, but what really made me feel good was that you, your wife, and kids all came together to confront this challenge as a family. Awesome! 🙂

    All the best,
    The Stoic

  2. Our path to financial freedom started with Dave Ramsey, too. As far as getting out of consumer debt, I don’t think there’s anyone who does it better than Dave. (Different story when it comes to the steps after that. 🙂 ) But we owe Dave a lot for getting our heads right when it came to my student loans & credit card debt.

    So glad you shared your story, and congrats on paying off those six figures!

  3. Great post, Brian! Proof that it can be done. It’s not easy, but it’s worth it. A common theme I see among those that have achieved debt freedom is the level of stress and fear is lifted. In my experience, that itself if life changing!

  4. Josh says:

    That’s incredible to pay down that much in four years. We only have our house to pay off and my wife & I plan to be debt-free for the rest of our lives. And, congrats on having the time to volunteer. It seems like everybody’s favorite line is “I’m too busy” to make commitments (I’m guilty of it myself).

    • Thanks Josh. Good luck paying off the mortgage. There are days that I’d rather just go home than spending the extra time volunteering, but seeing some of the outcomes the group has been making it well worth it.

  5. linda albarran says:

    Thank you for sharing. I have read other stories of how people have paid down their massive debts and all of them are encouraging. I just wished that they taught this in school.

  6. I have learned a little more about Brian’s story here. When he said, “I felt like I had let my family down” I felt that old silent guilt and shame of our debt – which can be such a block to progress. It’s wonderful that Brian and his family have overcome and become consumer debt-free. That lack of stress is something credit can’t buy.

  7. Yes! It is absolutely necessary to humble yourself to take good advice when it comes. This is as true for debt relief as it is for investment decisions and improving your own (human) capital. Very good story.

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