This family paid off $109,00 in credit card debt

Here’s how one family paid off $109,000 in credit card debt

For Brian Brandow, carrying credit card debt was normal. He thought it was simply what people did. After all, everyone he knew had some credit card debt, so how could it be so bad? But this mentality led to chronic overspending — for years.  Here’s the story of the Brandows and how they got out of their six-figure credit card debt.

“We used credit cards to help cover the shortage of money,” says Brian, a married father of three who now runs the blog Debt Discipline and is creating financial literacy courses for students in his Long Island, New York, community. “We did that for 15 years or so, and then basically came to a realization one summer when we were trying to plan a family vacation that we didn’t have any money. We were maxed out on five credit cards. That was our rock bottom moment.” 

That rock bottom moment was to the tune of $109,000. Here’s how the Brandows got out of their credit card debt in just 50 months.

Related article: What to do if you’ve got $100,000 in credit card debt

Build a budget and follow the money

Brian is the first to admit that part of what landed him in this jam is that he and his wife, Lynn, had never created a budget. “We needed to understand how much money we had coming in each month and how much money we had going out, because we never had a plan down on paper,” he says. 

It was an eye-opening exercise to realize where their money was going each month. One place: Dining out. “We were spending a lot of money on food, and we weren’t even eating at good restaurants,” he says. “It was fast food, because we were running around or had a bad day at work. And even with fast food, when you have a family of five, you can spend $40 to $50 a week in just one trip. If you did that once a week over the month, that’s $200. It really made us realize that we could take that same $200 and go to the grocery store and buy food for at least a couple weeks and eat a lot better.”

Get comfortable with a new normal

Getting serious about their debt meant the Brandows had to shift their behaviors in ways that weren’t easy at first. It meant changing many ingrained habits. “I think the biggest change for us was just getting used to the new behaviors and understanding that if we were running late from a day at work, we had to plan ahead,” Brian explains. “We started keeping easy-to-prepare meals at home, like tacos. You can make tacos in 15 to 20 minutes.”

Build a cash cushion

“One of the first things we did was save $500 in cash, because we never had a surplus of cash before,” Brian says. “When the flat tire happened or the dishwasher broke, we would always rely on a credit card to handle that. Initially, we saved $500, and then we bumped it up to $1,000 to cover most unexpected events.”

Ask for help

Brian reached out to his creditors to ask for reductions in interest rates. And it worked. “They closed the accounts so we couldn’t charge anything further on them, which was a good thing, and they were able to reduce the interest rate for us, so we were able to pay off our debt quicker.” And don’t be discouraged, he says. He was initially told no when he asked for a lower rate, but through persistence he was able to get the rates reduced. (Learn how you can negotiate with your creditors by yourself.)

Find new ways to have fun

In order to cut expenses, the Brandows took a hard look at the luxuries in their life. Gone was the satellite radio subscription for the adults and a gaming membership for the kids. “It didn’t mean that we weren’t doing those things,” Brian says. “We just found other ways. We got reintroduced to our local library where there are tons of movies, music and obviously books to tap into for free. You can start making those cuts and trim back your expenses immediately.”

The Brandows also had to rethink vacations — which they had regularly financed with credit cards. “We found that we could still take time off work and spend time as a family, but we didn’t have to fly in a plane somewhere or take a four or five hour road trip to a destination,” Brian says. That first year, they took a week off work, but instead of leaving town, they went to a local beach and to the library. “We really found that a vacation doesn’t have to be a destination,” he says.

Increase the money coming in

When they had their debt wake-up call, Lynn wasn’t working outside the home while raising their three kids. They decided that one big solution to chip away at their debt was to increase their income, so they agreed she would go back to work.

“Cutting expenses while increasing income is a one-two punch that you can really use to help get out of debt,” Brian says. “My wife took on a part-time job at night when I came home. We increased our income, we cut expenses, and, as a result, we had a little bit more room within our budget that we could start throwing towards our debt.” 

Choose a debt repayment strategy

The Brandows used the debt snowball strategy to pay down their debts. “We basically attacked our smallest debt first, throwing any extra money we had at it, and then as soon as that first debt was paid off, we moved that payment from the first debt to the second debt,” Brian explains. “We did that down the line for our five credit cards. You’re able to increase the payment every time you pay off one debt. And that really builds momentum.”

Related article: Debt avalanche vs. debt snowball: Here’s what you need to know

Involve the whole family

To truly commit to paying off their debt, it had to be a family affair, Brian says. Although their children were still young at the time, Brian and Lynn discussed the family’s finances with them. “We wanted them to understand the mistakes that we had made and that we were going to have to say ‘no’ a little bit more to certain things, because we were really watching how we were spending our money,” he says. “We showed them the budget. We explained to them how much money we made and how much things cost.”

It’s a lesson he hopes will stick with them throughout their lives. “If they can manage their money well from the time they’re 16, 17, 18, they’re going to have such an incredible head start,” he says.

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