Being a husband and a father of three children I truly felt like I had let them down in the summer of 2010 when I had to let them know we could not afford a family vacation. I felt embarrassed and disappointed that I had let our finances get to this point, a whopping $109k in debt. What I soon realized was that it was years of bad habits, over spending, poor communication between my wife and I, which had led us to this point.  We had hit rock bottom and something had to change.

We considered borrowing more money, or consolidating our debt to a lower monthly payment to give us some breathing room. Luckily these were not viable options for us at that time because our debt to income ratio had skyrocketed and no one would lend us any more money. We had to find another way. I began to search for information online. There had to be some “get out of debt quick” program that I have been overlooking for years that would save us. I could not find any such information. What I did find was a number of personal finance blogs and a guy named Dave Ramsey. That information was the spring board for us to begin our debt repayment.  We began to plan out our debt snowball.

Our credit union offered free financial counseling that we used in the form of a debt management program (DMP). If you’re not familiar with the DMP, a debt management program is a program that assists consumers with credit card debt, housing debt, and bankruptcy concerns. They will typically charge a small fee (in our case because our credit union offered it as a service there was no cost to us) to handle your situation. DMPs collect your monthly payments and pay your creditors on your behalf. The goal is to pay each creditor back in full, but at a negotiated reduced interest rate. Once we had the educational back ground and DMP in place, the last piece of the puzzle for us was making the behavior changes in our daily lives to ensure we did not fall back into this place again. These are changes that often are generalized, but I wanted to give you our changes that have allowed us to pay off $84K in 42 months.

Breaking Bad Habits

Here are some of the personal changes that we made as a family to help repay our debt:

Luxury Items – we gave up items that were wants, not needs. I gave up Sirius satellite radio, and my children gave up GameFly.

Food – we stopped eating out, even fast food would cost a family of 5 between $30-35 and a chain restaurant was a minimum $75 bill. Now when we do eat out, we enjoy it much more. We made better choices when grocery shopping. We don’t buy as much food each week and wasting food throwing money away each week.

“No” – we learned to say this word often, to family, friends, co-workers, etc. If it wasn’t in our budget, we politely said “no.” If someone pushed back we would explain what we were working on with our finances.

Involving our Children – we have made a point to include our 3 children ages 14, 14 and 11 in our budget discussions. We want them to understand why we are making these changes and prepare them for their futures. We don’t want them to make the mistakes we have made.

I would not change the last 42 months. The sacrifices have been so worth it. The entire family has managed. It hasn’t always been easy, but we keep the end goal in mind of being debt free. Having a surplus of over $2k per month can really keep your family motivated. I really wish we learned the common sense principles of being debt free more the 42 months ago, but I’m so glad we are less then a year away from being debt free.

Brian blogs at Debt Discipline where he writes about his family’s personal experience with debt and paying off over $109k in debt. You can follow Brian on Twitter @debtdiscipline.