How A Family on One Income Got Out of Debt {$55,000 Kind of Debt}

Money With Wallet

Written by Crystal, Contributing Writer

They say ignorance is bliss. So I guess I lived in blissful ignorance for a while.Truthfully I was placing an unfair burden on my husband.  For years I let my husband manage all of our money. We had no budget. If I needed something, I just asked if we could afford it and being the agreeable man that he is, my husband generally always said yes.

After all, I was generally only asking for things that we needed and rarely for anything very expensive. Then one day someone told me they had misplaced a check I had given them and so it had never been cashed. I was bothered by this since I had given this lady her check more than four months before. I should have known that it never cleared. 
I went home that day and asked my husband about it. It turns out that he just hadn't been keeping up with reconciling our checking account so I offered to look it over. One thing led to another and I started digging into EVERYTHING not just the checkbook.

I discovered we were about $55,000 in debt beyond our mortgage.

I can't say I was shocked by that number, but it was one I had never acknowledged before. We had two car loans, student loan debt, and a chunk of credit card debt.

Most of that credit card debt had been accumulated as we worked toward our Master's degrees. We had chosen to pay each tuition bill with plastic and even though at least my husband's portion was reimbursed by his company, we rarely applied it to the card when it came through.

I discovered we were really operating in about $500 in the red. We were going further into to debt by at least $500 per month. 

This was a wake up call! I do not blame my husband for this mess. I had left the huge burden of dealing with our money square on his shoulders. By remaining ignorant, I carried a chunk of the blame. To make matters worse, I was on maternity leave with our first child. I didn't want to go back to work. I wanted to be home. Oh...and on top of that, God had put on our hearts that we needed to start giving back to Him in earnest. We felt led to give 10% of our income. 
So what did we do? 

We took a deep breath and we dove in. First we refinanced our mortgage. At this time, the real estate market was still booming. Cheap mortgages were easy.  We got a better rate and lowered our house payment. That certainly helped.  Next, we began to give just as God had asked us to. Yes, I know it is crazy! We didn't have enough money to meet all of our bills, let alone dig out of debt! How could we start giving MORE! But give more, we did. And that's when everything changed.

God provided the answers! First, we discovered Dave Ramsey.  Our church offered his Financial Peace University and we jumped on that bandwagon with both feet hog wild. 

We made our first budget and got busy. We cut up and closed ALL of our credit cards.  We started to live on a cash ONLY plan. We followed the Dave Ramsey plan nearly to the letter.  We ran around our house and sold anything we could part with of any value starting with books. We had lots of books!  Amazon is great for selling books.  We found old bank bonds we forgot about and cashed them in. We had a tag sale. I started babysitting for another family to earn extra money. We squeezed every dime. We started seeing bills paid off.  The ship was SLOWLY starting to turn. 
Then crazy things started to happen! I got a refund check in the mail from something or other, the details are lost on me now.  It was a BIG check. That check was nearly exactly the same amount as one of my student loans! We paid it off. 

My husband started getting little surprise bonuses at work. Those bonuses added up. We paid off more! He got larger raises than we could have ever expected. More of our debt disappeared. We became faithful to God and His call to give and He blessed us beyond our wildest imagination.

Truthfully, looking back, if I sit down and crunch the old numbers it still wasn't enough.  The numbers still do not add up. It shouldn't have happened the way it did.  But it did.  We paid off $55,000 in debt, despite a 30% drop in our income and a decision to tithe in earnest, in less than 2 years. God is good! 

Now we are able to have emergency cash in the bank most of the time.  When something breaks, we do not reach for credit cards, but for cash. We were able to put a new roof on our home--paid for in cash. When the water heater went, we covered it in cash. When BOTH vehicles broke within 2 days of each other, it was all covered--in cash. 
We are now investing for retirement and saving just a bit for our childrens' college educations. We have seen our net worth grow by 50% over 5 years despite the depressing economy. I can't say it enough, God is good! 

If you have questions about our plan, I'd be glad to help. To date, my husband and I have led 5 or 6 Financial Peace University courses.  We've seen remarkable results and lives changed.  I'm not a financial expert by any stretch of the imagination, but I just might be able to point you in a good direction. If you are deep in debt, do not despair…you can do this!

Crystal is a former special education teacher who decided to stay home after her first child was born. Staying home was a completely foreign idea to Crystal. However, she followed the Lord's leading and is happily homeschooling her three children while also running a photography business.

Crystal blogs about life, homeschooling, photography and more at Crystal Starr.

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Unknown said...

This is amazing and inspiring. I have huge amounts of student loans and I would love to come up with a plan to pay them off! said...

You can do it Bekah! :)

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