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  • Episode 17 – Help I’m Drowning in Debt

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Help I'm Drowning in Debt

We got a question from one of our listeners, who wrote, “Your story is so inspiring. I would love any resources to help get out of debt. I'm currently unemployed and my husband and I are drowning in debt with no plan to pay it off.” 

I thought this would make a great podcast episode because I know a lot of people are struggling with this right now (because COVID) and it's unfortunate, but it typically takes some sort of catastrophe before we really look at the problem that we're having and that's what happened with us.

Our Story

In 2006, I was diagnosed with cancer and we almost lost our house. It was devastating. It really made me think about what we were doing financially. When everything was said and done with chemo and with cancer, we had over $200,000 in debt, and that didn't include our mortgage. That was a home equity line, student loans, credit cards. I think there might have been a car in there. I'm not sure if we'd had our cars paid off by that point.

It was a lot. I thought, if something happens to me I don't even know what Jeff's going to do. Most of this debt was in our joint names. We had a house and so if something would have happened to me, he would have been forced to sell the house, use any equity we had, which I don't even think at that point we had any equity because the housing market was crashing and so we were upside down in our house. 

We had no idea what we're going to do, but I knew that we could not keep going the way that we were going. That was just not going to work. I know people who have declared bankruptcy, and we considered doing it, but it's not a great feeling.  There are certain types of debts that are not going to go away if you declare bankruptcy. Tax debt will not go away. Student loan debt will not go away, and that was a pretty significant chunk of what we had. We also had a home equity line, and the only way that was going to go away was if we sold our house. We really like our house. So we decided to buckle down and figure out how we were going to pay this off. 

I know there are programs out there that talk about debt forgiveness, and whatnot, and a lot of those are just crap. They charge you a ton of fees. Essentially all they're really going to do is try to save up some money that you're paying them in payments to make an offer to your credit card companies. If your credit card company says, no, you've just trashed your credit. It's not a good solution.  

A lot of times, those companies have you make one payment to them and they distribute that money out to everybody else. You can do that yourself without paying all their fees. 

I totally appreciate this person that wrote in with this question because it takes a lot of courage when you are in that position, to ask for help. That's the first step, acknowledging that you have a problem and need to fix it. 

How to start getting out of debt

The way that you start is a two-pronged approach. I think you have to do both. We follow Dave Ramsey and I know Dave Ramsey is not for everybody, but I want to talk about some basic things that we did that I think that most people are not willing to do when they're trying to pay off their debt. 

We looked at it like football. I'm a big football fan, being from New England. 

In football, you have to have a really good offense and a really good defense. If you're married, you have to do this together. If one of you was on board to do it and the other one isn't, it's not going to work. You won't be able to dig yourself out faster than your spouse can put you back in. Luckily Jeff and I were totally on board. This is what we're going to do. 

How to play defense with your debt

What does that mean to play offense and defense? Let's start with defense.

For us, defense meant keeping the money in the house. Keeping it in our household so that we could use it to pay off debt.  

You have to know how much it costs to run your house. Most people don't know. Money just flows out of their hands. You have to know how much it costs you to run your home. And you've got to put some limits on some things. 

You have to sit down and look at your bills and when you do that, you're probably going to notice things like… we have Netflix and Hulu and Amazon Prime and cable. Do we really need all this stuff?

It's really good to go through and do this review and say, okay, is there anything that we have duplicates of? I know like a lot of us, we get car insurance and homeowners insurance, and then we never think about it again. We typically requote ours every two years, or if I notice that the policy jumps more than 10%. That's usually my key that we need to requote that. 

When you're going through all of your bills, write down how much your mortgage is, your rent, and how much you are paying for utilities.

One thing I don't recommend, and I know a lot of people do, I don't recommend that you go on the even payment plan with your utility companies.  Especially if you live somewhere like New England, or anywhere with a cold winter and hot summer. The reason I don't recommend that you do that is because you're going to have times in the spring and times in the fall where you're going to have really, really low energy bills. You're not using the heat. You haven't turned on the air conditioning yet. And so you've got really low energy bills. Those are great months to pay off debt. Because you use all that extra money and throw it at your debt.

Whereas if you have the equal payment plan, you never have that. And then, for a lot of people, at the end of that payment plan, they've used more energy than they thought. And they owe a huge amount of money. I don't want you to have to do that. Pay what you actually owe on your utilities.

Write everything down and then if you don't know how much you spend on food,  I would set a budget for food. (This may not work during COVID. This wouldn't work for us right now.) But, you could open up a second checking account and put the grocery money into that account and then spend from there.

When that account is out of money, you're done with groceries. You’ve got to figure out what to do for the rest of the month. That's kind of the electronic way of doing the envelope system, which never really worked for us because I don't like carrying that much cash on me. I just don't. I never have, but second of all, we do a lot of online shopping.  

Right now, the envelope system would not work for me because we're not going to stores. Everything that we get is delivered. A good way to do that is to set a budget or, depending on who your bank is, some banks have like budgeting software actually built into the bank. so that's another way, too.

But you've got to play defense. You've got to say, what can we cut out? What can we cut back? But you can't do that unless you know what you're spending. It's critically important. You can put it in Excel, you can write it down on a piece of paper. You’ve just got to do it. 

You also need to simplify. If you're drowning in credit card debt, stop using credit cards. At some point you've got to say, this is all we have to live on. We have to make this work with the cash that's coming in. 

How to play offense with your debt

That brings me to the next point. Offense. How did we pay off so much debt so fast? We did every odd job that we could find. I installed printers for people. I did a lot of bookkeeping work. I did a lot of extra tax work. I did a lot of consulting work. I taught people how to run their businesses. I did a lot of tech stuff. You don't know how to use your email? I'll show you how to use your email. 

Jeff was doing tech stuff. Jeff was building websites for people. Jeff was helping people do tech support, whatever we could find. We had skills that we could use to make money. 

I was ready to go back to waitressing. I don't care that I'm a CPA. I was ready to mow lawns. I was ready to deliver pizzas. I was ready to wait tables. If the work that I was doing dried up, then I was going on to the next step. I had a goal of how much money I had to bring in every single month. And I didn't care how I did it. (It had to be legal, of course!) 

I think a lot of times the issue that we run into when we want to pay off our debt is we say, well, I'm not willing to do X. I'm not willing to wait tables. I'm not willing to work on the weekends. I'm not willing to not have cable. I'm not willing to sell stuff that we don't use.

Something has to change if you're going to clean up this mess. Because what you're doing right now is not working. And if you just keep doing what you're doing, nothing is going to change. You have to change something. So you’ve got to change up your defense. You’ve got to change up your offense. 

That is how the Patriots came back from a 28 to three deficit in the Superbowl.  They changed everything up. They said, okay, this is not working. Clearly. And they won the super bowl. If you want to win this game, something has got to change.

That's how we did it. I'll tell you, we're still relatively frugal. My car is eight years old. Jeff's car is seven years old. Could we buy new cars tomorrow? Yes, but I don't really see the point, especially right now. We're not driving anywhere. 

But when I wanted my Cricut machine, I waited six months to buy it. Even though I really, really wanted one and I did a lot of research and I watched all the videos. Finally, Jeff was like, just buy the new machine. Just get it. Please just buy the machine. And it was on super sale… so I bought it. 

You can have a debt-free life

I cannot tell you how amazing it feels to not have to worry about money. Even if all of our current sources of income dried up, Jeff and I could go work at Walmart or go to tech support somewhere, or I could do taxes for H&R Block, or whatever… and be able to pay our bills. 

It’s amazing. That's because we paid off all our debt. We have our mortgage, we have our living expenses. That is it. And we built up savings in a savings account. 

I can't tell you how much better that feels. If you are drowning in a lot of debt right now, I know how that feels. I've been there before. Think about how that feels. What if that was gone? I'll tell you. It is amazing.

I know it seems like it's impossible, but it's not forever. Here's the thing. If you don't clean up your mess, you are going to feel like that forever. Or, you can feel pain because you can't buy everything that you want when you want it. Or you might have to work some extra hours for a job that you might not be thrilled about for maybe a couple of years, and then it's over. You could clean up your mess for a couple of years and then never feel that way again. That's pretty awesome. It really is. 

I hope that it's helped inspire you a little bit. If you want more specifics on how to get started, how to get going, go to ask kristin.net to ask your questions or leave a comment below. I'd love to help you with this.

I wrote a blog called Payment Free Life. It's still up online. You can go check that out as well. I would love to help you navigate this. If this was helpful for you, or if you know people that need to get out of debt and you can't really have that talk with people, you could share this on your social. Who knows, someone might pick it up and listen to it and you could help change somebody else's life.

Links Mentioned




​Disclosure: We professionally create this podcast that receives compensation from companies that we talk about. So you must assume that any link you click is an affiliate link. Kristin and Ingram Digital Media only have affiliate relationships with companies that we believe in wholeheartedly. We are independently owned, and all of our opinions are​ our own.


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