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.

{ 16 comments… read them below or add one }

Financial Samurai May 25, 2010 at 11:10 am

It really is great you realized that buying a house to the max with no savings buffer, and then taking a car loan was a mistake. Go the 1/10th rule of car buying where you spend no more than 1/10th your annual gross salary on the total value of the car.

Congrats on getting out of debt!


shannon August 28, 2013 at 10:55 am

That car advice is the dumbest I’ve ever heard. That means that to buy a Honda Accord, you’d need to be making about 200K a year. For the average family making about $50-70K/year, you should buy a car that costs $5K-$7K and anyone earning less than about $150K could never buy a new car. What?


The Happy Rock May 26, 2010 at 10:14 pm

Beautiful story Ed! Thanks for sharing.

Some awesome stuff in there. I especially appreciated that your strokes brought you and your wife closer and really paved the way for you guys working together financially.

It sounds like that along with the hard core budgeting were the practical steps that turned the tide.

Feeling sick and tired and trapped and reading Total Money Make Over and the Duggars provided the motivation.

You guys kicked some serious debt, especially on one salary for the most part.

I look forward to celebrating with you in a few months.


Double Eagle May 26, 2010 at 10:38 pm

What a great story, Ed. It turns out that I was conquering a similar demon at the same time. It’s too bad that we didn’t know about each other or we could have provided each other with that much more support. At the same time, it’s not exactly something that comes up in conversation and it seems like we still got on the road to success, so it’s a win.

We also share another common factor and that’s that without the influence of The Happy Rock (and for me, also my mother), it might not have ever happened in the first place. Achieving difficult things is that much more difficult without the support of others.

It’s not enough for a person to just say “get out of debt”. If that’s all it took, no one would be in financial trouble. It often takes friends and family who are willing to show us the light and to gently prod us in the right direction.

I’m happy to say that while I still have a fairly sizable student loan I’m still working on, as of last fall, I’m finally free from consumer debt after more than 15 years.

It took a long time and cost more money than I ever care to try and calculate, but I’m on a path to financial security, even though I still have some road to travel. There is no better feeling in the world than not having to write checks to creditors every month for mistakes that were made years ago, and to see a brand new digit in the front of my savings account balance every month or two.

I’m saving for my next car, which I’ll pay cash for (whether it’s $1,000 or $10,000), and I’m saving for emergencies. When I finally have that student loan paid off, I’ll be breathing true freedom, but in the meantime, I got a good taste.

I’ll be thinking about you in September when I know you’re going to be enjoying a great success.


Thecpa May 27, 2010 at 7:15 am

Thanks for a great post. It’s always inspiring when someone reaches goals of financial freedom. We have been totally debt free since March of this year. No matter what the future holds we will be okey. Continued success on your journey through DR’s Total Money Makeover. That was the key to our success.


ed May 27, 2010 at 9:17 am

Thanks everyone. One thing that I notice when I reread this is that frequently our plans toward success are thwarted by some unforeseen factor. Aside from the mistakes I made, there were various events that derailed my efforts. So, we’ve had to regroup and not get discouraged.


Jessica.S May 28, 2010 at 4:37 am

What I’ve learned from your story is that having a supporting family matters the most, and together you can overcome everything. Money comes and go, but family will always be there.

It’s amazing to see with how little we can live on. However, we forget and end up buying more and more stuff.


Susanna May 28, 2010 at 3:54 pm

Truly an incredible story of getting back into black. It takes serious determination and discipline, but you are doing very well! Getting out from under $40k of debt must be a nightmare, I admire you for your continued efforts. Many American families could learn a valuable lesson from this testimony.


Andrea June 2, 2010 at 8:19 am

Congratulations, Ed, to you and your wife. What a relief to live without the added burdens of consumer debt…and to live with a plan to stay debt free. Thanks for sharing your story. I live (all but mortgage) debt free now also but love (and need) to read stories like yours to remind me why it is so important I not fall back into my old bad habits.

Good work!


garrett @ debt eagle June 25, 2010 at 4:07 pm

great article ED!

This quote really made me shudder:
“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 recent bought a home in 2009 and it is turning out to be so much more expensive than i was expecting. My mortgage really isnt that bad, but taxes, insurance, and maintenance really add up. Im hoping i can save up a little bit extra and try and pay down the principle to get my monthly expenses lower.


Eric June 28, 2010 at 11:31 am

I would like to ask if you could provide more details on how you paid off the debt.

From your story, you went from living in house that you couldn’t afford and juggling the monthly budget/payments so they were “timed” not to bounce a check. You then suffered two strokes and missed work for several months, putting you $40,000 in debt.

Two years later, you have reduced that debt to about $10,000.

Where did the extra $30,000 come from? That is almost $300 a month (without adding in interest). It didn’t sound like you were living an extravagant lifestyle before getting sick. Plus, kids only get more expensive as they get older, so that has to cut into the family budget. Was it all from you father? Did you get a new job? Did you sell the house and move? It’s nice that you have reduced the debt, but HOW? Those of us in debt like the feel good stories, but without a breakdown of how people saved/paid down debt, it doesn’t really help us.


Mark July 18, 2010 at 3:09 pm

My wife and I follow Dave Ramsey off and on. He does give great advice. I sometimes wonder if we continue to struggle because we think we have a situation unique to ourselves or if it’s just that we don’t give it the old college try anymore. It is indeed mentally and physically exhausting. The thought of getting a second job for either of us is just daunting as we don’t think we have enough time as it is to do the things we need to

Be that as it may, I, too, have faith that I rely on. Perhaps it’s not as often or as committed as it should be, but through it all, I believe He has a plan for me and I just hope and pray that I’m following it to his satisfaction. :)


erwin January 13, 2011 at 4:48 am

Luckily for us the entrepreneurial spirit rubbed off on my wife and she started her own wedding photography business, using a small gov’t loan and the last of our savings to do so. She’s a natural and does fantastic work. She will no doubt be a huge success…someday
r touch


John July 23, 2011 at 12:22 pm

Thanks for in great blog.


jery bodnar April 26, 2012 at 9:52 am

Thanks for the advise I’m in the process of planning out my plan of attack. After thinking I was only 5000 in debt(not including cars and mortgage ) to finding another 35000 in credit cards my wife was hiding from me. I checked up on the accounts regularly thinking we were in the clear. So we finished our basement and paid it off(or so I thought) as we went. So thank you for the inspiring post ill be using this technique.


Tessa May 13, 2013 at 1:13 am

Debt freedom is essential to a successful family. Thank you for that sentence. It might be the guiding light I need, as I am only beginning now to try to eliminate $30K dollars of debt as a single mom.


Leave a Comment

{ 3 trackbacks }

Previous post:

Next post: