Into Debt And Out Again – Overcoming $40,000 Of Debt

by The Happy Rock on May 20, 2010

The following is a guest post by a dear friend and colleague Ed who is just months away from finally getting out from under $40,000+ in debt. Give him a warm welcome in the comments or a shout on twitter(@ed_bruner):

The First Step Into Chains

When my wife and I got married, we were debt free with money in the bank (minus my student loans…which I wasn’t even thinking about). When she got pregnant, we decided it was time to buy a house. The year was 2001. The Housing bubble in NJ was already ballooning. We had difficulty finding anything that wasn’t a “fixer-upper”x2. Mistake #1: the mortgage loan officer realized that I didn’t want to borrow all the money I was qualified for, so his advice was: “When you buy your first house, you want to borrow to the point that the payments are difficult to make because over time it will get easier”. I believed it. And so, our first house was a challenge. Our savings were wiped out because there was no extra money. In 2003, we moved to our current house. It too was a stretch. Over the course of years our debt was slowly becoming unmanageable.

Journey into the Red

To be honest, I tried to create a budget, but there was no room for savings. If something unplanned occurred, we had to put it on a credit card. We used an ATM card for our purchases, not cash. We would set an amount to spend, but would easily go over the small amount when tallying receipts. So, when I would “do the bills” I would have to juggle things to make it work. I would have to estimate the days it would take for a check to get delivered/processed so it wouldn’t bounce. We were living without a budget and the credit card debt was beginning to get stressful. 2005 brought pregnancy with child #3, the harsh reality of a needed minivan became apparent. Mistake #2: I reasoned in my mind that I could make the loan payments on a used vehicle if I took advantage of just 4 hours of OT a week. The vehicle was purchased in 2006, a month before the child was born.


In May 2006, I suffered two strokes a week apart. I am thankful that I have made a full recovery, but I was on disability for several months….needless to say, no OT was happening. Debt was piling up, and for the first time in our marriage my wife begun managing the bill. I was mentally “checked-out” due to recovery. She realized the financial house of cards, I built for us was crumbling. When I returned to work, either OT was not available or I was still too mentally “checked-out”, either way, I wasn’t doing any. Between my medical costs, car loan, student loan, new baby we found ourselves 40k in debt with increased monthly expenses. Failure was imminent.

Hope and Change

Because I have the best wife in the world and because of several positive influences in my life, we realized that managing our debt was not the way we wanted to live the rest of our lives. Two main positive influences: 1. The Happy Rock, because I know him personally I was challenged and inspired to embark on this journey toward debt freedom. 2. Duggars, as corny as you may think the show is, it has made a resounding positive influence on my family. For those who don’t know, the Duggar family contains 19 children and boasts that they live debt free. If they can do it in AR with 19 kids, why can’t I do it in NJ with 3? These influences allowed me to see that not only is debt freedom possible, but it is essential to a successful family.


I began to see debt as the enemy of our success and dreams. In addition, because of my faith, I began seeking Scriptural verses to confirm this avenue I felt God was directing me. “Owe no man anything but love” Romans….”the debtor is a slave to the lender” Proverbs…. Seeing debt as slavery brought more clarity and resolve. Large sums of debt keep us from enjoying things like much needed vacations, car repairs & maintenance, and proper heath care among other things. With debt, we are not free to pursue our dreams because we are tethered to a lender. I want freedom, don’t you?

Roll Call

Credit card  = $10,000

Auto Loan = $4,000

Student Loan #1 = $5,000

Student Loan #2 = $6,000

The First Steps Out of Debt

After expressing my intentions to the HappyRock, he gave me a copy of Total Money Makeover – D.Ramsey.  We began by creating a budget.  We started using Ramsey’s Debt Snowball method. Mistake #3: we wanted to get started immediately, we didn’t start with a $1,000 security fund first. I recommend the security fund.  Basically, we stopped adding to our debt using a good budget.  We started making minimum payments on all loans except for the one with the lowest balance. Finally, we began living on cash.  My wife and I each divided a modest amount for  each other for each week.  When that money was gone, the spending stopped.

The Journey is almost Over

After two years of intense debt reduction, we have paid off all non-mortgage debt, except for Credit card #2.  My father felt bad about not helping me out with college and started sending me money to pay the Student loans.  With his help, we wiped them out.  When you get to the point where we are at now, it is amazing to see how much money we could be keeping instead of sending to creditors.  Never did I dream about so much available money.

Our goal to reach debt freedom (minus the mortgage) this September.