How I gave up debt: Lauren Greutman
In this series, NerdWallet interviews people who have triumphed over debt by combining commitment, budgeting, and smart financial choices. Their stories may even inspire you pay off your debt.
Aligning spending with values helped the family tackle debt
Lauren Greutman, a spendthrift, was ashamed to let her husband, Mark, a saver, know how badly she had mismanaged their family’s finances. They owed more on their mortgage than their home was worth and nearly lost their home to foreclosure. When money ran out each month, they had to charge diapers and groceries on credit cards.
When Lauren found herself hiding $ 600 worth of new clothes in her car, she knew she had to take responsibility, change her spending habits, and tackle debt. It took two years to pay. Lauren wrote about her experience in the book “The Recovering Spender” and shared her advice with NerdWallet.
What was your total debt when you started your repayment journey?
What is your total debt today?
We are currently 100% debt free other than our mortgage.
How did you get into debt?
I bought what I wanted, when I wanted it. I thought she was the “right wife” to take care of the money, but I didn’t ask for help. I ran $ 40,000 in debt behind my husband’s back and felt so ashamed.
This shame prevented me from discussing it with him. We bought a house we couldn’t afford, drove fancy cars, and tried to make it look like we had it all.
What triggered your decision to start deleveraging?
I remember sitting on our bed one night surrounded by a mountain of bills. Mark was numb, I was crying, we were both embarrassed and scared.
I was so sick and tired of following the appearance of having everything I confessed [the debt] to him that night. It was such a dark and desperate time, and I saw no hope.
What steps have you taken to reduce your debt? What resources or services have you used?
We sold our house for $ 225,000 with a mortgage of $ 1,800 per month and moved into a small townhouse that was costing $ 700 per month. This freed up $ 1,100 per month to pay off the debt.
We canceled the cable and sold one of our cars. We have learned to budget and communicate about money. I learned to use coupons and to plan meals. We have reduced our grocery bill from $ 1,000 to $ 200 per month.
We had never heard of budgets, numbers and coupons except in a very dry, clinical, and boring way. But when Mark and I made a heart connection by bringing values and vision into the mix, that’s where the breakthrough happened.
Did you make any other changes?
I started my website, LaurenGreutman.com, to help others in the same situation and earn additional income. I have an online course called “Financial Renovation” where I show people how to get out of debt and enjoy life on a budget.
All of the extra income from my website, book sales, and lessons went to pay off about 50% of the debt.
How has your life improved since you got rid of your debt?
I have so much more peace and freedom. I know where my money is going and I have so much hope for the future.
Since getting out of debt, my husband has been able to quit his job as an actuary and come back to work with me on my website. I live a life with purpose and passion and love to pass on the information I have learned to others.
HOW TO MANAGE YOUR OWN DEBT
Lauren’s motivational tip: Make a list of everything you value in life. Next, list all of your expenses for the past month. Do the lists match? Adapt your expenses to your values.
To deal with high credit card debt, one approach is to debt consolidation, which consolidates all of your balances onto a new credit card or loan with a lower interest rate, so you can pay off your debt faster and save on interest. If you have strong credit, you may be eligible for a 0% balance transfer credit card. You can also consult the prices on personal loans for debt consolidation.