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Mission Impossible: Getting out of Debt in Seemingly Impossible Circumstances

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The following is a contribution from my good friend Laurie at The Frugal Farmer. If you’re interested in contributing to Frugal Rules, please consult our guidelines and contact us.

My husband and I are on a mission: a mission to be debt free.  Many, if they saw our numbers, would consider the mission an impossible one.  We’re standing right now at a 63% debt-to-income ratio (DTI).  To put this in perspective, that means that roughly 75% of our net income goes toward paying the monthly minimums on our Discover card and our mortgage.

That would be all fine and dandy if we made 6 digits a year, but we don’t.  Not even close.  We’re a one-income family, as we’ve made a decision that I’ll stay at home while our four children are young.  And it’s not that my husband isn’t a hard-worker – Rick works very hard.  In fact, he’s one of the hardest working people I’ve ever met.  He just happens to work in a field that doesn’t pay much.

One of the reasons we decided to go “public” with our journey to be debt free over at our blog, The Frugal Farmer, is to show people that, no matter how deeply you’re in debt, you can work your way out.  We hope that by sharing our experience, we can give others tools and tips to help them dig their way out of debt, no matter how impossible it might seem.

Here are some of the principles that we use that you may find helpful if you’re working yourself out of an “impossible” situation:

1.  Get Extreme.  If you’re deep in debt like we are right now, you’re going to have to get real serious about cutting expenses.  This is no time for half-hearted attempts.  Create a budget, track every dime of your spending, and scrutinize every single expense, getting rid of everything that’s unnecessary.  Another wise move would be to look for ways to increase your income.  Sell things.  Get a second job.  Pick up some overtime.  Every single dime makes a difference in the long run as you’re paying off credit cards, like your Arrival World Mastercard.

2.  No Pity Parties.  This is no time to be feeling sorry for yourself.  Not only does it not help, self-pity can quickly lead you to simply give up.  We’ve become conditioned as a society to think that if we don’t have discretionary spending, we’re deprived.  But all that really matters money-wise is that you’ve got a safe place to live and food to eat.  100+ years ago, living a super-frugal lifestyle was the norm.  It’s time to get back to basics.

3.  One Day at a Time.  Try not to focus on all that you have to do in terms of debt reduction.  This can lead to discouragement and the breaking of Rule #2.  Instead, focus on “today”.  Celebrate that you stuck to your budget this week, that you spent less on groceries, or that you made dinner at home instead of picking up takeout.  Give yourself a pat on the back for every step in the right direction, and be proud of even the smallest victories.

4.  Keep Your Eyes on the Prize.  I know: this sounds contradictory to #3, but keeping your finish line in your sights will help you to remember why you decided to go down this road in the first place.  Make charts, graphs and pictures to show yourself how far you’ve come, and what you’ll do after you win the race.  Imagine what life will be like when you’re debt free.  How will you feel?  What will you do?  Where will you go?

5.  Play Defense.   One of the most crucial guidelines to completing an impossible mission is to make sure you’re playing defense.  Fight discouragement with visualization of yourself debt free.  Surround yourself with those who support your goals, and minimize time with those who try to sabotage them.  Have a list of things you can do when fear or discouragement comes, like going for a hike or watching an inspiring movie.  Or call a friend who supports your goal and has an attitude of optimism.  Personally, I’ve got a few very good friends that I can call on during the tough times who I know will:

  1.  Be my cheerleaders and my encouragers
  2. Give me a good kick in the pants when I’m feeling sorry for myself

Find friends like this and make a commitment to call on them when necessary.

No matter what your debt situation looks like, there is a way out.  Educate yourselves through blogs like Frugal Rules (see the Blogroll for a list of more great personal finance blogs).  Get yourself a good support system, and get it done. Change your definition of “impossible”.  It’s no longer impossible for you to get out of debt, it’s impossible for anything to stop you!

 

Have you ever been in debt? What was it that helped you turn your situation around and knock it out?

 

Editors Note: I love Laurie’s thoughts here.  As someone who was in serious credit card debt myself, I know first hand the challenge it can be. I believe a lot of what goes into debt repayment is the attitude and keeping in front of you why you’re doing it. It’s obvious that Laurie and her husband have this attitude and think they’re taking the right approach the knocking that debt out.

 

Photo courtesy of: Jason Rogers

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to U.S. News & World Report, Investopedia, Credit Karma and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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58 Comments

  • pauline says:

    Congratulations on not taking the easy way out Laurie. I have never been in debt to a level where it was scary but think you are doing a great job in owning up to it and paying it off. It may seem impossible but you’ll get there sooner than you think.

  • Good work Laurie! I especially like the advice on going extreme and not throwing pity parties. Having the right attitude is key to getting out of a debt mess. Keep up the good work and you’ll get there my friend!

  • Ashley Park says:

    Great post Laurie, it’s great to see you really working at lowering your debt. Hopefully in a few years you will be able to look back at what you’ve achieved with a real sense of pride!

  • Michelle says:

    Great post! We are working on eliminating student loans. I just look at how much I owe and that gives me tons of motivation!

  • @debtblag says:

    Great post! I’m definitely in the same situation; glad to hear others are coping well and best of luck to you!

  • Probably the biggest thing for debt repayment, in my opinion, is taking it one day at a time. That’s not to mean things should be put off for another day, but there is only so much you can do any given day. Keep pushing, but don’t get overwhelmed and keep the “one day at a time” thought in mind.

  • Good job Laurie. You show them. As long as you have the right attitude and discipline, I believe that you will be debt-free. More power to you.

  • I couldn’t agree more with #3 – one day at a time. Like you, my debt is huge! I’m not sure what the DTI is – it’s probably something crazy like 147% but I do know that taking it day by day is what I try to concentrate on so I don’t feel too overwhelm with it all…Great post Laurie!

  • Jake Erickson says:

    When my wife and I were in debt I got a lot of motivation in just looking at where we were when we started vs. where we were at currently. It’s easy to get discouraged if you just look at the long road ahead, but seeing how much you’ve already accomplished can help combat this. It sounds like you guys have the right attitudes and are well on your way out. Good luck and keep up the good work!

  • Laurie, you guys are so inspirational – from attitude to work ethic to the decision to raise your children that way through the difficult times. Vanessa and I have a lot to learn from you. Keep fighting and working hard, you guys can definitely beat the debt.

  • Do or Debt says:

    Laurie, you are doing great! This post was so inspiring! As someone in a similar situation, I realized I had to stop freaking out and stop having pity parties. Pity parties don’t make your debt go away! It’s a tough awakening. I like your no-nonsense tips and glad we are on this journey together!

  • Extreme debt calls for extreme measures. I have been there Laurie as you know, so I know what you are talking about. The best advice is to take it one step at a time and never get ahead of yourself.

  • anna says:

    Very motivating post! I really like #2 about how being frugal used to be the norm… now with such a consumption-based and over indulgent society, I think we lose sight of that! Thanks for some encouraging tips!

  • Good luck Laurie. It’s hard when you have a big debt to income ratio like that. You might need to find a way to earn more money somehow. Being frugal is an essential first step, but it will be hard to pay off big debt with small income. I hope you can find something to do to make a little extra on the side.

    • Yes, we are working on bringing in more income. I’m doing some side hustle stuff which is starting to bring in a regular income now, and Rick works OT lots. And, we keep looking for ways to cut expenses down. We’ll get it done, one way or another. :-)

  • Great job Laurie. Taking it one day at a time is my motto as well. You guys have made a lot of changes and I’m sure you’ll look back over this year and be very happy that you did :-)

  • Keep on fighting, it may seem insurmountable at times but I can be done. I know because I have done it too! The best piece of advice I have is to still let yourself have some fun and celebrate small victories (like paying another 5k off).

  • And of course, build an emergency fund. Lack of one has hurt our debt repayment attempts more than anything else. Because when something goes wrong, the only way to pay for it had been more debt.

    • Yes, Edward, we took some of our tax refund and put a small one in place. I think that can be a really important part of a repayment plan, in order to prevent going back into deeper debt. Thanks for the important reminder. :-)

  • It’s nice to hear from another one income, stay at home mum family as that’s exactly our situation. Just the 2 kids though, for now anyway!!! Hope you reach your goals Laurie.

  • Great post, Laurie! I know this journey hasn’t been the easiest, but I can already see such a change in how you look at your debt from when we first met. It is what it is and you’re moving forward – focused on the future, not the past. You do have to be laser-focused, but that doesn’t mean you can’t have fun while you’re getting out of debt. It’s just a different kind of fun and it feels good to realize you can still enjoy life without breaking out the credit cards. You and Rick and the whole family have a great attitude and I know you guys are going to kick debt to the curb and continue living an amazing life together.

    • Thanks so much, Shannon. I truly feel it’s the support from you and the rest of the PF blogging world that has given us the confidence to push through the tough times and stay on that horse, you know? It’s really made a huge difference for us, so, thank you! :-)

  • Best of luck with sticking on the path. Remember if you stumble along the way, it’s not the end of the world or not a good plan. Getting back on track is the important part. Having some kind of visual marker especially in a prominent place in your house, on the fridge, on the front door, is a great reminder and motivator.

  • Great post Laurie! Our passion for getting out of debt came through a spiritual conviction that we were not living a life that was aligned with our faith. It really hit us at a deep, emotional level. I think when that happens to a person it makes the journey sweeter and gives one the endurance needed to see it through to the end.

    • I totally agree, Brian, and that was a huge part of it for us too. We want to be better stewards of the money we’re given. It definitely helps us to stay motivated when we remember that we’re not just doing this for our own benefits, but to hold fast to what our faith says about money and to be able to do more to help others eventually as well.

  • Catherine says:

    I love your story Laurie! Our DTI ratio including mortgage, vehicle loan and call student loans is about 50% so I feel your pain. We hope to pay it off in 5 years MAX. Ideally less but getting out of debt takes time…we;ll have a better game plan when we know my income when I return to work after mat leave. Good for you ‘coming clean’ 😉

  • Laurie, these are all great tips. Thanks for hosting her story John! Not only are these great for getting through debt, but you can really apply them to other goals in life (ie: weight loss). I’m so impressed by your family’s commitment to overcome your debt instead of continuing the cycle. Can’t wait to see that final post about paying it all off!

    • Great point! I’ll have to remember that when I work this next week on getting rid of those 10 extra pounds. :-). Glad the post inspired you, and we’re excited about payoff day too! Have a great weekend.

  • Justin says:

    Laurie, I’ve said it before but you’re an inspiration. I think that defense matters far more than offense. It doesn’t matter how much you make if you’re spending it all on crap.
    Good luck with the journey.

    • So true, Justin!!! In my work in personal finance banking, I”ve seen those with massive incomes blow it all, and then you go to the PF blogging world and see those making what would be considered “pennies” who have 6-7 digit net worths. It can be done!

  • Number 3, one day at a time, is absolutely key. While long terms goals are essential, keeping your head up day to day is what will get you there.

  • Great article Laurie. I know exactly what you are facing right now. Things have been tough for my family as well but that’s no reason to give up, in fact I feel it’s brought us together even more. We are constantly talking about how we are going to pay off our debts and save extra money.

    Also like you mentioned sometimes you just have to take drastic measures in rough times and do anything you can to cut expenses and earn extra money and that is exactly what we are doing as well. Anyways good luck and I’ll be rooting for you.

    • Chris, I feel the same way. Since Rick and I have “faced the music” and made a plan to eradicate the debt, we are closer than ever. So glad to know we’ve got you guys cheering us on – it gives us all the more motivation to win. :-)

  • Before we started to really get out of debt, I used to read blogs all the time and stories of people who paid off huge debts really inspired me. Before you know it you’ll be one of those stories that inspire people to face their debt and start changing. It’s not the most fun thing in the world to tell everyone you made mistakes and lived above your means, but it’s very liberating to get it all out in the open, and I think your doing a wonderful job.

    • Thank you so much, Kim. It’s been difficult to get it out in the open: we’ve lost friends, etc.., but honestly, that doesn’t bother us, b/c we know we’ll be coming out on top one day, and helping so many others at the same time. Since you guys are so much further ahead of us in the game, it’s great to look on as you reach those milestones first, and it really inspires us, so thank you, too, for sharing your daily walk out of debt. :-)

  • The one thing about you that caught me right from the beginning when I started to read your blog Laurie was how positive you were. You clearly know what you both need to do in order to pull yourself up from under and are stopping at nothing to achieve that. Having the right attitude is one of the most important starts to a debt repayment journey along with both parties being on board if in a relationship. You have both, so keep at it and you’ll be there in no time!

  • I love the “no pity parties” comment. I think lots of people fall into that trap, and the idea that they’ve been doing well so they deserve something new and shiny. It will only benefit you in the long run to avoid pity parties!

    • Thanks, Tushar – I think you’re right! It’s so easy to fall into that trap. We’re working hard to remember that the shiny new stuff will only be to our detriment, at least right now. Thanks for your thoughts! :-)

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