Help!! I’m in Debt!!

Posted by Kim on October 24, 2011 in Debt, Money |

These words haunted me for many years. My husband and I were in debt and it seemed that all of our income was being used up by payments to a variety of different banks. I remember this feeling well. It was crippling. I remember beating myself up for getting in this position to begin with. I felt like I knew better. Yet somehow, here I was. What a mess! When I did the math and calculated the compound interest being charged on my debt, we were looking at several years before we would get to the end of this nightmare. And if we just made the minimum payments on all of this stuff, we would never get out. This just wasn’t okay with us. We had to make some changes.

We stopped spending!!

We used our money for groceries, auto fuel and basic household expenses. Notice the word “basic.” We didn’t even have cable television. There were no frills. We didn’t go out to eat. We didn’t use money for entertainment. And, we only bought the clothing that we absolutely had to have.

I’ve outlined the budgeting plan we used in these two articles:
Why Budgeting Doesn’t Work Part 1
Why Budgeting Doesn’t Work Part 2

We changed the way we thought!

We started thinking about our money the same way you have to think when you are on a diet. Instead of watching every bite we put into our mouths, we watched every penny we spent.

Think about this. If a rich man comes into money, he invests it. If a middle class man comes into money, he pays off all of his bills. If a poor man comes into money, he spends it. Why do you think that is? He does this because he has a desperate feeling that he’ll never have this opportunity again. He lives in the moment’s gratification instead of having a long term plan. He has no hope. So, he goes on a shopping spree so he can look and feel rich instead of one day being rich.

Although I wouldn’t have classified us as having a poor man’s mentality, maybe we did. I mean, we spent money that we hadn’t yet made. I could justify the expenses and tell you that they were mostly auto repairs and medical bills. But, who cares? We were in debt and had to find a way out.

We found ways to make extra money

We took on part time work to get extra money. Another thing that has helped people is to sell some stuff to get the ball rolling. Have a garage sale or use Ebay or Craig’s List.

We created rules

We created rules to protect us from our own personal weaknesses. For instance, we each were allocated a certain amount of pocket cash. On the days that we were tired and didn’t feel like cooking, it would have been easy to pull out the plastic. But instead, we created a rule that any eating out must come out of our pocket cash. This kept us from having expensive restaurant bills.

We set obtainable goals

We started with the bank we owed the least to and paid them off. Once we were free from that debt, we applied their payments to the next bank, and so on, and so on. The process of getting out of debt is overwhelming. When we focused on one step at a time, the process was manageable.

We rewarded ourselves.

To help us get through the very long process, we created small rewards when we met goals. This might have been a dinner out or maybe a movie. After paying off a really large debt, we might have planned a little bigger reward. But, we didn’t go crazy. We avoided the mentality that got us into the problem to begin with.


We worked hard and it paid off. At the end of three years, the only thing we owed money on was our house. Nothing happens that you don’t create a plan for. You have to make it happen. We were in debt until we created a plan to get out. We stopped looking at the Jones and decided that they probably had payments on all of the stuff they “owned” and we didn’t want that anymore. We decided that we were rich because of who we were, not because of what we owned. All of these changes in our thinking helped us slowly work our way to freedom.

Was it hard?  Yes.

Was it worth it? Absolutely!

Would we do it all over again? You bet.

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  • Hi Kim,

    Good for you. This is the truth, “We decided that we were rich because of who we were, not because of what we owned.” To many people get caught up in trying to impress other with things. It is great that you and hubby worked together with this problem. that is what relationships and marriages are all about. working together.

    Great plan and you worked your plan. To me the first step is to throw away the plastic. It can get you in more financial problems than you need.

    Thanks again and blessing to you,

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