Bankruptcy and Beyond: My Debt-Free Journey

BrokeIf you ever “Google” Getting out of Debt, you will find pages upon pages (upon pages) of sites.

You can read everything out there, but in the back of your mind you might here that little nagging voice say “But will it work for me?  Does anyone really ever do it?”

I’m proof that it works.  

I have been on both ends of the debt spectrum — from declaring bankruptcy to paying off my own debts.

I share this story with all of you, not for accolades or “atta’ girl” notations, but rather because it sometimes helps to know that you are not alone and there really can be a light at the end of the tunnel (no matter how long that tunnel might be).

In 2001 I was enjoying life.  I was spending money and having fun — most often paying with credit cards.  In turn, I was only making the minimum payments, which kept me in the lifestyle I had become accustomed. It wasn’t until  December 2001 (at the end of a long relationship), that I noticed that I was financially unstable.

I couldn’t make ends meet – no matter what I tried.  I knew that something had to change, but being young (and still pretty stupid), I did what I thought was the only answer — bankruptcy.

I was officially labeled BANKRUPT in August 2002.

It was a gut wrenching feeling.  I was so ashamed that I had allowed myself to go down this path.  I then vowed to leave that behind and move forward with my life – with my soon to be husband.   In fact, within a few days of my bankruptcy being filed, he proposed and we were married in June 2003.

We both knew we wanted to start a family shortly after we said “I Do.”  We also both knew I wanted to stay home and raise our kids.  While we knew it might post a financial strain, we thought we would just figure it out as we went along.

I’ll admit that money was tight, however, we never used credit cards to pay bills – not even groceries. We had accumulated some debt which include auto loans, a home equity loan and one department store credit card. We figured that was “OK debt.”  Some months we struggled to make our payments, but we managed.  Not sure how, but we did.

In October 2007,  we learned about Dave Ramsey.  We both thought the idea of not having debt was incredible, but weren’t sure we had the means necessary to achieve that goal.

We were both very curious and eager to learn what Dave Ramsey could teach us.  So, in early November 2007, we placed an order for his books. We sat down and read everything within a few days (no joke).  As we read his books, we had no clue as to how this man would change our lives — forever.

Thus began the changes to our way of living.  I did the same steps many others have done –  right down to cutting up those credit cards and using only cash for everything. The The toughest thing for us was that budget.  Ugh – a budget.  It can make you sick to your stomach. We had to keep tweaking it, but we got it to work.  How?

We reduced our grocery budget and then used extra money to pay down debt.  Part of our doing so was to find a way to save more money at the store.  Through learning to do so and sharing these tips with friends and family, I started a blog.   As I shared my deals, we continued to pay down our debt.  We sold items.  We didn’t eat out.

Finally – in February 2010 – we made our final debt payment!  It was liberating.  I can’t describe the feeling.  This time around I did it the RIGHT way.  I didn’t just run from my debt.  I faced it head on – with my husband.  We paid it all down.  It took us 27 months, but we did it.  Paying off our debt was truly the most liberating feeling in the world!!

As part of our journey, both my husband and I learned our most important lesson “There is no such thing as good debt.”

I am proud of so many accomplishments in my life (my husband, my kids and my site), but I am also very proud that I was able to actually pay off that much debt.   When I say that this was life changing – it truly was.  Not only did we pay off our debt (other than our mortgage), we permanently changed our way of living.

To this day, we still use the same budget form.  We check and update it regularly.  We still use cash — and use our envelopes. If you ever catch me shopping at the store, you will see that is how I pay.

We still have no debt – and do not plan on heading down that path again.  We have fully funded our emergency fund.  We have been able to do things that we want to.  When you do not have debt,  your money is all yours.

I share my story with all of you so that you all know that it is possible to do this.   I want you to know that I understand where you are at – more than most of you probably ever realized.  If you want to change your life, you can do it.   But only you can make the decision to change your life – for the better!!


Tracie FobesAbout the Author:

Tracie shares her money saving tips and ideas daily at Penny Pinchin’ Mom.  She is featured regularly on her local CBS Affiliate – KCTV5 – helping local families learn how to make the most of their own budget.  

When not busy saving money and helping others, she is a mom to 3 kids, ages 4 – 8, at her home outside of Kansas City, MO.

  • Jeff Ehrlich

    Tracie, Great story and certainly inspiring and motivating for others that want to join you and your husband with debt-free living. Keep up the great work with your blog.. Jeff