2 Jobs, No Sleep, Debt Management: How We Paid Down $106,500

How one Wisconsin couple eliminated a ton of debt, had a baby and bought a house in less than five years.

MSW Photography, Dubuque, Iowa
By Kandy Hildebrandt, as told to Michele Lerner

After my husband, Russ, and I had been married a little while, we decided that I would be a stay-at-home mom and home educator. We had twin daughters (who are now 19). They were a blessing, of course, but they also added to our financial needs.

The financial problems began because we didn't really adjust our spending to accommodate for the fact that I wasn't working anymore. Every month, if we didn't have enough money, we'd just use credit cards. (The irony of our situation is that I used to be a customer service rep for a retail store, handling their credit card services.)

Russ had planned to pay off the debt by making money from a side business doing independent marketing. (By day, he's a chemist for an environmental testing company, so there wasn't really a way for him to make more money at his regular job.) That was the plan, at least.

The Wake-up Call

Russ had always tried to fix everything on his own to protect me and our daughters. He always managed to pay our bills on time, but he was obviously getting stressed and depressed about the debt we had accumulated.

I really had no idea how bad things had gotten. Then we got a letter that said our interest rate was being increased. We were overwhelmed with the mountain of debt before us.

The situation was this: 15 years after I started as a stay-at-home mom,
we had $89,000 in credit card debt and a $17,500 personal loan. On top of that, our new interest charges were accruing at $1,500 per month.

It turns out that trying to pay off bills with money from the side business didn't really pan out. While I didn't want to diminish his dream of making money with his side business, we finally had to face reality and seek outside help. I made an appointment with the Consumer Credit Counseling Services and got us on a debt management plan. The plan was for five-plus years we would put $1,910 every month towards the debt. And for the first three years we needed to pay $400 on the private loan.

I remember saying to him -- tongue-in-cheek: "All you have to do is work like a dog, and the kids and I will do everything else."

In fact, that's exactly what it took to get us out of our dire debt situation.

Extreme Measures for an Extreme Situation

Russ already worked 70 to 80 hours a week at his regular job, and had to commute 50 miles each way into Minnesota. He took on a second job mopping floors at the local grocery store from midnight to 4 a.m. five nights a week.

That situation was hard enough, but then gas prices went up, and it was really hard to make ends meet.

On the nights when he wasn't working at the grocery store, it wasn't unusual for him to work late, and when he did, he would often sleep in his car out in the parking lot to save on gas money, which was pretty rough considering the Minnesota winters.

All the while we lived as cheaply as we could by cutting out everything from fresh produce at the grocery store to watering down our personal care and cleaning products to make them last longer. We cut our own hair and didn't buy anything that wasn't absolutely a necessity. Even thrift stores and garage sales were out of reach.

The twins started a family newsletter with articles and interviews with different people, and relatives subscribed to this from all over the country, so the money they got from that was their spending money. Whenever we got a gift from anyone, we used it for the kids.

We were halfway through the debt management plan when our son was born. He was such a bright spot for all of us as we entered the midway point in our debt management plan. It was a painfully tight time, financially, where no frills were allowed.

Focus on the End Goal

The hardest part of all of this for me was helping Russ see that we needed to seek outside help for the mess we were in financially. I needed to do it in a way that was free of any criticism.

With Russ just going to work, then to sleep and then back out to his second job, he realized how much family time he was missing. Even though he was living on almost no sleep, he began having dinner with the family. That time we were able to spend together as a family helped relieve all our stress.

It also helped that we knew ... that we would be able to finish these payments at the end of the 5 years. That didn't stop us from setting goals for the future beyond five years, though.

All this time we were living in a 1,000-square-foot rented town house with the twins; our son slept in our room. When Russ saw a little house that he loved and wanted to buy. I thought he was perhaps dreaming a little too soon. But then a real estate agent offered us a rent-to-buy contract with the owners. It was amazing, because the owners decided to sell the home to us earlier even though they knew we didn't have any extra down payment money. The owner paid the closing costs, and then we used a first-time buyer tax credit to pay off the rest of our debt management plan early.

Lessons Learned

Today, we still live frugally. We've made permanent lifestyle changes. We used to have 11 credit cards; now we use only one credit card sparingly and pay it in full when the bill comes. Our only debt is the mortgage, and we're working to pay that off.

Our now-grown daughters were old enough back then to learn a lot about why you should never get into debt. And we all realize now that when you are in bondage financially, the accompanying stress certainly tests the fortitude of your family and your health.

Thankfully, in all the adversity, our family was able to come out of it wiser and stronger than ever.

Michele Lerner is a Motley Fool contributing writer.‚Äč

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no sleep and commuting 50 miles to a job. people end up in the cemetery like that. sorry, I'd rather live in debt or default than that alternative.

February 13 2014 at 5:02 AM Report abuse rate up rate down Reply

Why assume it was the wife who accrued the credit card debt, nothing in story indicates that. Further assumptions are being made that it would be financially beneficial for the wife to have returned to work. I LOVE the idea that a wife staying home rearing children is somehow parasitic. It could be that child care costs and a different tax filing made wife staying home more sense. I am sceptical about the story only because the story lacks sufficient information for the numbers to add up. How exactly does $400 per month for 3 years pay off a $17,500 loan?

February 13 2014 at 2:44 AM Report abuse rate up rate down Reply

Show me a company that will let you work 70-80 hours a week. I'll lick the floors clean.

February 12 2014 at 10:54 PM Report abuse +1 rate up rate down Reply
2 replies to Rob's comment

offshore oil rigs 84 hours a week

February 13 2014 at 12:45 AM Report abuse rate up rate down Reply

I am an hourly employee and my company offers unlimited overtime for months at a time. Some of my coworkers will work 70-80 hours a week. Most employees do not take advantage of the unlimited OT.

February 13 2014 at 10:38 PM Report abuse rate up rate down Reply

Davey Ramsey has a great plan to get out of debt and never use credit again to buy stuff. Took me a little over 2 years making $38,000 to pay off $16,000 in debts, as of this month im debt free (other than the mortgage) but now that i have freed up $600 a month i will place $400 of that every month to the mortgage as extra payments

February 12 2014 at 9:51 PM Report abuse +3 rate up rate down Reply

This article has me mystified--why didn't she take a part time job while the kids were at school? Or start a low-cost business from home? When she says she didn't want to criticize (meaning her husband) I'm saying the blame lies with YOU! You ran up the credit cards and did nothing to pay them back--for years!

February 12 2014 at 9:06 PM Report abuse +4 rate up rate down Reply
1 reply to Lola's comment

they were homeschooled

February 12 2014 at 9:47 PM Report abuse +1 rate up rate down Reply
1 reply to jimmyv2222's comment
Saint Michael


February 12 2014 at 10:03 PM Report abuse +1 rate up rate down

well, those numbers don't add up to me...I've been there....no way you can pay off that many credit cards, plus the interest, and all household expenses on that little per month....and to not work herself?? Most women working in this country have kids at home to take care off and manage a household...she couldn't work at something?? Hope he doesn't have a heart attack or stroke from the stress....

February 12 2014 at 6:58 PM Report abuse +1 rate up rate down Reply

im sorry this story just doesnt cut it for me. the only person who deserves props is the husband the word "WE" is non applicable here. THE WIFE SHOULD'VE GOTTEN A JOB TO HELP OUT PERIOD!! i thought marriage was teamwork?

February 12 2014 at 5:42 PM Report abuse +3 rate up rate down Reply
2 replies to jondastunna84's comment

she was at home taking care of the kids so she was helping in some ways

February 12 2014 at 9:48 PM Report abuse -1 rate up rate down Reply
Saint Michael

She quit her job but didn't quit her spending, so they wound up over $100k in debt. He worked his ass off, almost 24/7/365, for five years. He slept in the car. Her contribution was to finally stop spending. Yet she "tells" the story and takes the credit.

February 12 2014 at 10:03 PM Report abuse +1 rate up rate down Reply

Kudos to this Mom for teaching her children early the value of saving and living below your means. I grew up very poor and my family was always in some kind financial turmoil. When I was 10 my parents filed bankruptcy, when I was 15 we were evicted from our house and we were homeless for several weeks. When I was 18, I moved out and have lived on my own ever since. I worked 3-4 jobs thourgh college and got through with no debt. My wife also had a similar upbringing, so when we got married we knew that we never wanted to be in that sitituation as adults. We put her through graudate school using tuition reimbursement and savings. We put me through law school with no debt as well via a small scholarship, savings, and working several jobs. I intend to teach my daughter to save and live well below your means.

February 12 2014 at 2:19 PM Report abuse +4 rate up rate down Reply

I would have reigned in this over-spending wife years ago. Take away the credit cards and live within a budget. No new jewelry, furniture, high-end cosmetics or expensive clothes until the debts were paid. Also, after their kids went off to school full-time, the wife should have gotten a job to cover her spending money, not force the poor SOB husband to work 16 hrs a day!

February 12 2014 at 2:04 PM Report abuse +2 rate up rate down Reply

This man is a fool, and learned nothing from the financial and mortgage crash of 2008-09 . The big boys sell their assets and then declare Bankruptcy/

February 12 2014 at 1:44 PM Report abuse -1 rate up rate down Reply