How 3 Families Conquered Debt

Behind in your payments? You're not alone. The average American household carries $91,000 in debt, which includes mortgages, credit cards, and student loans. But it is possible to dig your way out. See how these three families did it, and get inspired by their money-saving strategies. 

Cartoon Bills and Truck
Photo: Lucy Vigrass

"We stopped using our credit cards altogether."

Roni and Stephen Issa McKinney, Texas

Son: Bakari, 9


The Issas buried themselves in debt so gradually that they barely noticed it happening. With a combined six-figure income (she's a project manager for a heating-and- cooling company; he's a high-school recovery coordinator), they had no trouble making loan payments. However, the couple routinely overdrew their checking account and racked up $23,900 in credit- card charges, thanks to a penchant for shopping and vacations. Their other obligations included car loans totaling $27,900, student loans of $33,700, and a $1,700 line of credit.

Their wake-up call came during the recession, when Roni's company imposed an across-the-board salary reduction. Money fights ensued: Maybe he should earn more; maybe she should spend less. Ultimately the couple signed up for Financial Peace University, a faith-based debt-reduction course. During the class, the Issas learned to create a monthly budget (their first) and pare back their lifestyle. They cut up their credit cards and began withdrawing predetermined amounts for groceries, gas, and more. "My grandmother put cash into envelopes every month to cover different expenses, so the strategy made sense to me," says Stephen.

With their spending under control, the Issas began attacking their debt, focusing on the smallest balances first. Within 26 months, they were debt-free except for their mortgage. Today, they have a six-month emergency fund, are saving for retirement and college, and are on track to pay off their home in four years. The Issas believe that using hard currency is what solved their money problems. "When we go out with friends, everyone else pulls out credit cards, but we use cash," says Stephen. Being debt-free has made them better money role models for their son. Last year Bakari saved up all summer to buy a $40 toy he desperately wanted. Once at the store, he chose to buy two less- expensive items that seemed like a better value. "With that attitude, I hope that he'll never have to go through what we did," says Roni.

"We charted our way out of trouble."

Hillary and Brent Reynolds Juneau, Alaska

Kids: Lilli, 11; Nathaniel, 11; Brenna, 8; Garrett, 2


The Reynoldses had tried several times to reduce their debt, first by consulting a credit-counseling agency and later by consolidating loans. It never worked, mainly because they never changed their spending habits. One complicating factor: Brent was stationed away from home in the U.S. Coast Guard, which led to Hillary's taking a number of expensive flights with their infant twins to her parents' home in southern Alaska for caregiving help and support. Money became so tight that Brent would pull into harbor after months at sea and discover that he could barely withdraw $20 from an ATM. "We were riding it so close," recalls Hillary. Their debt included $32,000 in credit cards, a $16,000 auto loan, and $6,000 in student loans.

Their money goal was twofold: to get out of debt and to allow Brent (as he approached 20 years in the service) to open his own business. "I wanted the freedom to choose whether or not to leave the military rather than having our debts dictate the decision," he says. They also wanted Hillary to continue staying home with their kids, one of whom has special needs. The couple approached their debt by adopting ideas from financial expert Dave Ramsey, author of The Total Money Makeover.

Their favorite strategy was making a color-coded debt chart that displayed their shrinking loan amounts. "It became this huge accountability tool," says Hillary. "I saw it above my computer every time I paid bills or shopped online." To free up funds, Hillary became a master shopper. "My hourly 'wage' was based on how much I could save rather than earn," she says. She whittled the family grocery bill down to $300 a month (a reduction of $200) by stockpiling sale items and planning menus to align with what she already had in the pantry. She learned to can vegetables and fruit, while Brent figured out how to fix things—from their toaster to his truck—by watching YouTube videos. Eventually, the Reynoldses managed to set aside $2,000 per month, nearly half of Brent's take-home pay, toward debt reduction.

When the family paid off their final debt (a student loan) three years later, they celebrated by taking the kids to dinner and a movie. "You would have thought they went to Disneyland, they were so excited," says Hillary. The Reynolds children have gleaned a valuable lesson from their parents' experience with debt. "They know there's no such thing as free money," says Hillary. Brent, meanwhile, was able to retire from the U.S. Coast Guard and opened his own successful marine-electronics business last year.

"We started living frugally."

Cristin and Patrick Frank Buffalo, New York

Sons: Pad, 11; Luke, 9


The Franks fell into debt the way many families do. When Cristin became pregnant shortly after their wedding, the couple took on a $160,000 mortgage for their first home, borrowed $35,000 to buy a new car, and splurged on baby gear. That was on top of the $55,000 they owed in college loans. By the time their first child was born, "We felt buried," Cristin recalls.

Their game plan: pay off the car loan early and continue to reduce their student loans, all on Patrick's income as a computer sales rep (Cristin was home at the time with Pad, who was then a baby). They made small spending shifts, dropping their landline, sharing one cell phone, skipping restaurant meals (they eat out only a few times a year), and getting by with one car. Cristin began walking or biking everywhere with her two sons. "We didn't do anything drastic. We made one choice at a time about what we could live without," she says.

When Cristin later took a work-at- home project-management position, the couple decided to earmark her salary toward their mortgage. Their frugal lifestyle paid off. The Franks retired their student loans within two years, satisfied their car loan two years early, and after six and a half years (with a fluctuating income of $80,000 to $120,000) had paid off the house. In keeping with their pragmatic style, they didn't bother celebrating that milestone. Still, erasing their final obligation did enable Cristin to quit her job; start Eve of Reduction, a blog about reducing debt, waste, and clutter; and write two books.

The Franks don't view their still-thrifty existence as lacking. For fun, they take family bike rides, hike in nearby parks, and go sledding. "We still spend money, just less," says Patrick. Their boys have adopted their parents' simple values. When a friend of Pad's commented about the Franks' small house, he replied, "This home is perfect for us. We don't need anything bigger." The topic never came up again. "Pad and Luke are comfortable with how we live, and so are we," Cristin says.

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