From Six Figures in Debt to Six Figures in the Bank: How They Did It
Tagged in: , ,

"Learn how to invest—you owe it to yourself! It’s the best way to build long-term wealth."

Tap to Read Full Story

"Realizing we couldn’t afford a family vacation, thanks to $109K of debt, was our wake-up call.”

Brian, 47, and Lynn Brandow, 46, IT project manager and retail associate in Long Island, N.Y.

“Back in 2010, Lynn and I were planning a family vacation. But when I tried to swipe our five credit cards, we didn’t have enough credit available to pay for the trip. I asked the banks to increase my credit limits without any luck.

Though this was our rock bottom, it gave us the motivation to start learning about good money management and how to pay down our $109,000 of credit card debt. While we had some retirement savings at the time, we also had an underwater mortgage—so we had our work cut out for us.

Getting started: Our first step was creating a lean budget and cutting back on things like eating out and entertainment. Lynn also went back to work as a part-time retail associate, earning $600 to $800 per month.

We ultimately utilized a free debt management program through our credit union, which helped us negotiate reduced or waived interest rates. This didn’t discharge any debt, but getting a break here was an incredible springboard to begin repaying debt.

Crossing the finish line: Over the next four years, we funneled as much as $2,200 a month, or about 30 percent of our take-home pay, toward our credit card debt. (We also built up a small emergency fund of $1,000.) By September 2014, we’d paid it all off.

Debt freedom has brought our family peace of mind. Lynn and I continue to regularly communicate about money, which is an important part of being good financial role models for our kids.

Now we’re focusing on building our wealth. Our net worth is currently $366,000 between retirement accounts, cash, cars and our home (which is no longer under water). Every dollar we put toward debt is now saved or invested.

Their advice for others: Define your ‘why.’ Ours was to better provide for our kids, travel more, share experiences and build memories as a family. Keeping this in mind made it easier to take the necessary steps to dump our debt.”

[subscribe]

<< Page 3 of 3