Home » Deep in Debt? Here’s How to Get Out

Deep in Debt? Here’s How to Get Out

When we first started our “getting out of debt” journey, we didn’t tell a soul anything about it, mostly because we knew that most people would tell us we couldn’t make it happen and we’d be better off filing bankruptcy. We were deep, deep in debt, facing a 65% debt-to-income ratio at the time and were a minimum of $1,000 short of income each month without Rick’s overtime pay, which was not guaranteed.

The reason we didn’t tell anyone about our situation was two-fold: first, people tend to be negative and think the worst, and we didn’t want the discouragement. Second, we weren’t even sure we could make it out of debt without filing bankruptcy. It was a tough situation – tougher than I ever imagined it would be. But now that we’re so far into our journey (I’ll share specifics when the consumer debt is paid in full) I thought I’d share what we learned about how to get out of debt when you’re in up to your eyeballs.

How Did We Get Here?

One of the first things we did in our journey to debt freedom was to write down our debt numbers. This is tough – especially when the numbers are big – but don’t allow discouragement to set in. Just because you know the numbers doesn’t change anything; you were in that much debt before you knew the numbers.

After we got over the initial shock of the numbers, we sat down and took a look at our past year’s expenditures using our credit card and bank statements. It didn’t take too long before we found oodles of wasted money, and suddenly it became very clear why our debt load was so enormous.

Knowing how you got into your mess will help you implement behavior modification immediately.

Set a Budget You Can Live With

After we figured out the numbers and where our spending leaks were, we sat down and made a budget listing all of our monthly expenses. Over the course of our journey, we’ve modified that budget several times. We’ve been unbearably strict at times and much too liberal with expenses at others, all in the name of trying to find a budget that works.

Eventually, we settled on some numbers for fluid expenses that challenged us, but not to the point of nervous breakdown. We set a $400 target budget for groceries for our family of six. Rick and I each get a small amount of blow money each month. We have a small stipend set aside for entertainment each month. We don’t always use it but it’s there if we’re going stir crazy and just need to do something fun.

As you make your budget, obviously the bills have to be paid first and you have to live with whatever is left to live with. If you’re in as deep as we were, this might mean you need to cut some expenses.

The Challenge Everything Budget

My pal J$ from Budgets are Sexy made this budget famous. The challenge everything budget is simple: you go through every single line item on your budget and see how you can make it smaller. Got cable? Trade it in for Netflix or forego paid TV altogether. Call around and get insurance quotes to see if you can lower your insurance bill. We ended up going with Geico and saving over $700 per year.We still have Geico after three years and they’ve been with us through thick and thin, providing great coverage and reasonable rates.

Look around for cheaper cell phone plans. We went with Republic Wireless and saved another several hundred dollars a year. We still have Republic Wireless after two years and couldn’t be happier.

Is Republic right for me? Smartphone plans starting as low as $5 per month.

Start doing haircuts and other salon treatments at home.Cut down on eating out and start making restaurant meals at home.

Go through every single line item in your budget and ask “How can I reduce or eliminate this expense? In line with this, start tracking your expenses using an Excel or other spreadsheet. For privacy reasons, I prefer a home managed system as opposed to an online system, but that could just be the prepper in me. 🙂

Make a Doable Plan

Guys, the plan is the best and biggest part of the process. For us we used the debt snowball, but use whatever works for you. Write down your debts from smallest to largest and figure out which one you want to pay off first. Focus on that debt and that debt alone, and use a “set it and forget it” attitude about the other debts, making the minimum payment only while you focus on pounding away at the one debt you’ve decided to destroy first.

And don’t feel badly if you have to modify your plan; just make sure you are doing so for the purposes of getting out of debt and not so you can spend more on other stuff each month.

Which reminds me: you have to commit to NOT using credit cards if you are going to make this work. That means if you don’t have the cash, you don’t spend.

Here’s another article on more stuff you can do if you’re feeling overwhelmed by debt: Overwhelmed by Debt? Start Here.

Work to Lower Your Interest Rates

This step has been crucial to our success. I don’t always advocate debt consolidation (see why here) but it can work if your head is in the right place. For us we are doing a combination of things. First, we consolidated some debt into a fixed payment, low interest rate loan with Sofi. Second, we take the other part of our debt and do balance transfers to zero interest cards so that we’re not paying any interest as we pay off the debt.

Find Stuff You Can Sell

You may need to sell some stuff in order to get the debt load down or more easily be able to live within your budget. Expensive cars may need to be traded in for cheaper ones. Boats, ATVs and other toys may need to be sold. A closet full of designer clothes and accessories may need to be pared down and sold on EBay or in a Facebook group. Gaming systems and other electronic gadgets may need to go as well. You may even need to sell/downsize your house if your situation is dire or if you want results quickly. Think carefully before doing that, though – a move can disrupt a family balance pretty seriously.

This can be tough, I know. Just remember that this is a short term situation and that after you are debt free you can buy all new stuff again if you want to.

Figure Out Ways to Increase Your Income

As time wore on and Rick’s overtime stopped, this left us in a huge bind. So I started working on options to make money from home. As homeschooling parents, we were committed to me being home with the kids, so I didn’t want to get a job outside of the home. I started with one freelance writing job for a popular blog and moved up from there. Now I’m making over $15,000 a year blogging and that number is growing each year, all while working part-time and being home with the kids. .

There are many ways you can make additional income besides blogging.

  • You can freelance a certain skill such as graphic design, tech help or organization skills
  • You can work part-time delivering pizzas or at other part-time jobs near your home
  • You can start a small business doing yard work, babysitting, pet sitting, tutoring or other work you love
  • You can pick up overtime hours at work if they are available
  • You can talk with your boss about working toward a raise or promotion
  • You can rent out a room to a college student, or rent out storage space in your basement or garage

Increasing your income will help you get out of the hole from a monthly budgeting standpoint and give you additional income to pay toward debt.

Monitor Your Progress

Every month on our spreadsheet we include our monthly debt totals. We do this for two reasons: first, it gives us an at-a-glance picture of where we’re at. Second, it helps us to stay encouraged as we see the debt numbers going down. When you’re deep in debt, the journey may take a while, and knowing that you are making progress will help.

How to Deal with Setbacks and Discouragement

If you’re deep in debt like we were, it can be super discouraging in general. Setbacks can make things even worse. We have had many setbacks during the course of our journey, from financial setbacks like a flooded laundry room to emotional setbacks such as family issues or Internet trolls ragging on us for getting into so much debt.

At one point, the discouragement got so bad that I spent nearly a month wallowing in it, hardly leaving my room. Don’t let that happen to you. If you find yourself getting discouraged, consider these tips.

Focus on your successes. Every dime of debt you pay off means you have less debt today than you did yesterday. Celebrate that!

Make small improvements. Put an extra $10 toward your debt or sell something and put the money toward your debt

Read to encourage. Read debt success stories or personal finance blogs that encourage you. Or read a great money book such as

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century ,

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy ,

Rich Habits – The Daily Success Habits of Wealthy Individuals ,

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

Money Love: A Guide to Changing the Way That You Think About Money , or the well-known classic,

The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness

Education will not only encourage you, it will give you more insight on how you can better manage your money.

Do something nice for yourself. Something that doesn’t cost any money.

  • Go for a walk
  • Take a nap
  • Give yourself a manicure
  • Watch a favorite movie at home

Which reminds me. Taking good care of yourself during this process is VITAL. You have to love on yourself and banish doubt and discouragement whenever it comes around. The more you beat yourself up – or allow others to beat you up – the harder it will be to stick with your plan.

Friends, you can do this. I know getting out of debt can be difficult, but just imagine and envision how great it will feel when you can tell your employer to kiss off because you have no debt. Won’t that be wonderful? 🙂



  1. Brian says:

    Great blueprint! So important to find the balance within your plan, Often people hear about a plan for their money or a budget and feel it will be too restrictive. It doesn’t have to be. Like you did Laurie, add categories for fun (entertainment, blow money) to help balance they debt repayment and stay motivated!

    • Laurie says:

      Yes! We tried the super strict thing at first and while it was exciting for the first few weeks it eventually just led to rebellion. I think balance is super important, especially if you’ve got a lot to dig out from.

  2. You laid it all out right here in this post, Laurie. This is a GREAT post for anyone feeling overwhelmed, discouraged or just starting to pay off debt. And I love your book recommendations. For me, reading and learning was the first (and best) step I took when we started our journey.

  3. Olivia says:

    I like to read “how to get out of debt” articles to help us SAVE money. We’re not in debt, but have always made a very modest income, so getting a bit of wiggle room is essential. I love your attitude, every category is fair game for paring down.

    • Laurie says:

      That is wonderful, Olivia! Having a good-sized savings account is important for every financial situation – even those not in debt, so they can avoid having to go into debt! 🙂

  4. Thanks for sharing this additional part of your story!

    Budgeting is not a bad thing. Far too many people take the concept as extremely negative. What we tell clients and readers is that budgeting just puts your priorities on paper. Budgets don’t restrict. If anything does, it’s a current income limitation. But within the income anyone has, it’s just a matter of prioritizing dollars.

    Our largest budget category is travel and vacation – because that is very important to us. Just behind that is food. 🙂

    If a weekly date night, or an annual family vacation, or a monthly pedi – whatever – is important to someone, then by all means it should show up in the budget. Just pull the money from another category that is of lower priority.

    As Dave says “tell your money where to go instead of wondering where it went” – that’s budgeting.

    • Laurie says:

      I love that your largest budgeting category is travel!! Listing your priorities is so important. Doesn’t matter what they are so much as knowing what they are.

  5. Laurie – I loved this post! You offer such sound guidance that I feel like I’m talking to a friend while reading. I especially love the part about taking care of/treating yourself. Self-care is so so important for your mental health. It is especially important for me as a working mom and wife, if I didn’t have my me time – I’m not sure at what level my sanity would fall in 🙂 That is why for me, having a little spa day every 8 weeks to sit in my favorite salon, with my hairstylist friend while she does me up and I drink wine. So I budget that $40 each month for myself 😉

    • Laurie says:

      So true, Daisy!!! I love that you budget that for yourself. It is so, so important. The health care costs that can come from neglecting oneself can be much higher after years of neglect than spending a few bucks at a salon would be.

  6. Mrs. Groovy says:

    Very inspirational, Laurie!
    Knowing “how did we get here” is crucial. In order to make a plan you first need to know how much you owe and how much you’re spending, otherwise your efforts will be hit or miss. Also, it’s OK to make changes slowly as long as you’re heading in the right direction. After you get a few wins under your belt you can accelerate the pace.

    • Laurie says:

      Great advice, Mrs. G! I totally agree with the “it’s okay to make changes slowly as long as you’re heading in the right direction.” That advice was very freeing for us.

  7. Laurie, I get a rush of inspiration reading this! I know your story quite well, but still . . . You have so much to offer to people who are facing that horrible mountain of debt – opening their eyes for the first time. And how wonderful that your freelance income has gone up : ) Keep on moving forward! We’re all looking forward to that consumer-debt-gone post!

  8. Jason Butler says:

    Excellent advice. People underestimate how much money they can make by selling things on eBay. I usually make at least $100 each month. That money has helped me save an emergency fund and also pay off some debt.

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