It was early summer in 2010, and Brian Brandow of Long Island, N.Y., was planning a family vacation to California. But as he searched the Internet for plane tickets for himself, his wife and their three kids, he hit a brick wall.

“We didn’t have any cash. We had five credit cards at the time that were basically all maxed out or close to their limits, so we couldn’t afford the tickets on any of those cards,” says Brian. “I tried to increase the limits and was unable to do so because my debt-to-income ratio was just too high.” Brian realized a problem he’d been avoiding for years had finally become too big to ignore.

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He Calls That Night His “Rock Bottom, A-Ha Moment.”

Brian’s family was in a deep hole of consumer debt. His troubles were over 10 years in the making, dating back to the year he and his wife, Lynn, got married and bought a house. Although they obtained a favorable interest rate with no private mortgage insurance (PMI) for their three-bedroom ranch, the home purchase precipitated their slow financial slide. “As soon as we got into the home, we wanted to remodel, so we took out a home equity loan,” Brian explains. “Then years later, we refinanced the mortgage. It wasn’t actually the initial home purchase that caused the problem – it was borrowing against the mortgage, twice, that accelerated things.”

Looking back on it, Brian realizes how naive they were financially. “My wife and I never had real financial education growing up. We were taught the basics, how to balance a checkbook and those types of things. But we just followed the path of everybody else: we got married, bought a house, started having kids, and we just had credit cards and began to overspend,” he says. “We knew it was a problem but we put our heads in the sand.”

We knew it was a problem but we put our heads in the sand.

In June 2010, when Brian finally faced the situation head-on, the family was $109,000 in debt. The crisis was overwhelming, and he was worried about how they were going to reverse course – but it wasn’t just that. “As a father and a husband, I felt like I had personally let my family down,” Brian recounts. “I was the breadwinner, and I couldn’t provide a vacation for my family. I felt like I had failed them.”

Brian didn’t know his credit score at the time, but his difficulty borrowing for the plane tickets suggests it was poor. According to Kim Cole, a Certified Credit Educator and Education Outreach Coordinator at Navicore Solutions, a national financial counseling nonprofit, your credit score is negatively affected if you have a high debt-to-income ratio and you’ve exhausted your lines of credit, both of which were true for Brian.

Your debt-to-income ratio is a measure of your recurring monthly debt versus gross monthly income. If 36% or more of your gross monthly income is going toward debt payments, it’s an indicator to future creditors that you will have a hard time repaying that debt. Cole calls the 36% figure “the overall gospel of what your debt-to-income should be, whether you’re applying for a credit card, looking to borrow money for a car purchase, or hoping to qualify for a home mortgage.”

Finding a Solution

That night in 2010, Brian decided to research options before talking to his wife. He chose the debt-snowball method of debt repayment, which involves first paying off smaller debts with lower interest rates before tackling the larger debts as a way to gain momentum. Then he went to Lynn.

“I told her we were in real trouble financially and we honestly couldn’t continue down the same path. At first she was skeptical of the debt-snowball plan, and unsure if we could handle the behavior changes.”

But the couple soon got on the same page and took advantage of a debt management plan (DMP) through their local credit union. Brian says he wasn’t worried about how the DMP would affect their credit score because their focus was to eventually build wealth so they wouldn’t need to borrow again. Cole explains that a DMP will not damage your credit score, and it has a high likelihood of helping your score because it will ensure you make on-time monthly payments, a huge factor in the health of your score. For Brian and Lynn, the DMP turned out to be a godsend. Brian recalls, “The counselors worked with our creditors to reduce our interest rates and in some cases waive them altogether. We averaged a debt repayment of about $2,100 per month.”

Of course, to afford those steep monthly payments, the family had to make a series of changes. For one, Lynn took a part-time retail job to boost the family’s income. The family also developed a budget and learned to stick to it, cutting costs by eliminating luxury items like Sirius satellite radio and GameFly. Finally, they learned how to say no to friends, family and coworkers who asked them to spend on something not in their budget.

All of this took commitment. “The first couple of months were hard,” Brian says. “We had to get used to not relying on credit cards if something broke in the house or the car, or cooking dinner at home even when we were having a busy night and wanted to grab takeout.”

We had to get used to not relying on credit cards if something broke in the house or the car, or cooking dinner at home even when we were having a busy night and wanted to grab takeout.

But to the family’s surprise, those new behaviors became routine – and then the lifestyle wasn’t so hard. “It helped to focus on the end goal of what things could be like if we were debt free. We had a surplus of money each month, and we found that if we set aside that surplus, after a couple months we could take a family vacation or basically do anything we wanted.”

Brian also discovered a unique way to hold the family accountable to the changes: in 2013, he launched Debt Discipline, a blog where he shares the family’s financial challenges and successes over the last few years. Publishing the blog spurred him to deepen his financial education and also help others in similar circumstances.

Involving The Kids

As soon as Brian and Lynn agreed on a plan for how to get out of debt, they talked to their kids – 11-year-old twins, a boy and a girl, and an 8-year-old son. Brian says, “We sat them down, told them about our situation, and then laid everything out: how much the mortgage cost, what the lighting bill cost, what a vacation cost, and how much money I made. We wanted them to understand the reasons why we would be saying no a little more frequently.”

Because his kids were young at the time, Brian needed to translate the problem into terms they could understand. His device? Ice cream. “It was summer and the kids loved to visit the ice cream truck,” Brian remembers. “I explained that if all of us got ice cream, it could be $8, $10, $12 a night. For the same amount of money, we could buy ice cream for the entire week at the supermarket. That was a very tangible example because ice cream was their favorite dessert.”

Now, more than five years later, Brian sees the effect this has had on his kids. “My twins are looking for part-time jobs, and they’ve talked about saving a certain amount of money for a car, putting some aside for college and then having a little bit for going out with friends.”

Brian believes his kids will be in a much better position as young adults than he and Lynn were when they were starting out.

The Big Payoff

The family became debt free in September 2014, and Brian says it feels great. “It’s amazing the stress that is now gone from our lives because we’re not worried about where money is coming from or how we’re going to pay for something,” he reports. As soon as they were done paying off their debt, they applied the now-extra $2,100 per month to building wealth: an emergency fund, college savings and retirement.

They still have credit cards, but they only use them to earn rewards for free travel, one of their passions, and they pay off their cards in full each month. Their credit score is now over 800.

Although they didn’t use their travel points for the trip, in April 2015 the family went to Universal Orlando Resort to celebrate the twins’ sixteenth birthday, their first big vacation after making their final debt payment. Brian wrote at the time, “I can tell you for certain it made it 10 times more enjoyable, knowing there would be no vacation bills to be coming home to.”

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It may sound strange, but the ultimate reward for all their hard work may have come in May 2015 when Brian was laid off. “If I had lost my job when we were in debt and didn’t have an emergency fund, it would have been a crisis,” Brian explains. Instead, all their planning saved the day. “The morning I lost my job, I called my wife and said, ‘We’re going to be okay. We have cash savings, and we’re financially set, we’re organized.’ We sat down that night and mapped it out. We saw exactly how long I could be out of work based on our savings and my severance package.”

After being unemployed for more than seven months, Brian started a new position in January 2016. He admits it was upsetting to lose a job he’d had for more than 20 years, but being financially prepared made all the difference.

He says, “It was really kind of a minor bump in the road. It wasn’t that big of a deal.”

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