Lauren Greutman cried the day she brought her husband, Mark, into the bedroom of their custom-built Charlotte, N.C., dream home for a heart-to-heart conversation. They were about to have their first child but she’d been keeping a secret. Splayed out across their bed was the evidence.

On their comforter lay a myriad of financial statements – outstanding bills for credit cards, a car loan, their mortgage, even a seven-year-old bill from the telephone company. All told, they were $40,000 in the hole, owed more for their home than it was worth, and their financial situation was quickly getting worse. “We were running a $1,000 deficit each month,” Lauren said. “I’d been taking care of the bills at the time and I was bad at it. I kept bouncing checks and I had a hard time making the credit card payments on time. I needed help.”

Lauren_and_Mark_Greutman

The year was 2007 and home prices were at an all-time high, according to the S&P/Case-Shiller U.S. National Home Price Index. The Federal Reserve reported that American credit card debt had reached the $1 trillion mark for the first time ever. Subprime lenders were starting to crumble from the pressure of too many bad loans, and it was just a year before stalwart banking giants Lehman Brothers and Bear Stearns would collapse.

In short, the Greutmans were just one casualty in what would soon become a widespread American foreclosure crisis. And they didn’t know what to do about it.

How It Happened

Like most families in debt, the Greutmans didn’t end up drowning in unpaid bills overnight. Their financial crisis was the result of a small trickle that gradually grew until they could no longer keep up. They’d bought their home at the peak of the housing bubble, and when Lauren lost her job, they never scaled back their spending.

“Mark knew we were in debt, but he didn’t know to what extent,” said Lauren. “He was afraid to ask because he didn’t [want to] know how much.” Lauren freely accepts responsibility for a large portion of their credit card debt. “I had a shopping addiction. I was spending money, we never budgeted, and I incurred a lot of debt. It caught up to me,” she said.

I had a shopping addiction. I was spending money, we never budgeted, and I incurred a lot of debt. It caught up to me

It wasn’t until they started talking with each other about their money that they began to get back on the right financial path. Together they set up a budget and found places to cut expenses. They stopped going out on dates, started meal planning and cancelled their cable TV. Lauren got a job waiting tables at a local steak house.

Then Lauren discovered couponing, and she slashed her family’s food budget from $1,000 to $200 per month. She was pregnant with her second child and used the newfound cash flow to quit her job and focus on raising her family.

They were in better financial shape than they had been, but were just breaking even each month. Mark started hearing rumblings about a lack of security at his job. Around the same time, a position became available in their hometown of Oswego in upstate New York. Without many other options, the Greutmans put their house on the market – ultimately selling it for less than they owed to the bank – and moved their family to a town that marked a new beginning, 750 miles to the north.

Starting Over

Even with a new job secured, the Greutmans still didn’t have a place to live. They didn’t have the money to fund a down payment and Lauren’s credit had fallen to subprime status (“Mine was in the mid-600s. His was in the high 600s.”), so a mortgage wasn’t going to happen.

With a young child and infant in tow, they moved in with family. After a month, they were able to land an 800-square-foot townhome rental, which was much smaller than the 3,200-square-foot custom home they’d left behind. “We couldn’t even fit our possessions in the town house. We sold most of our furniture, Mark’s drums, and pretty much everything except our beds and one couch,” Lauren said.

They put the proceeds toward their outstanding debt balance, which had grown to $46,000 after accumulating moving costs and accounting for lost value from the sale of their Charlotte home. At the same time, their monthly expenses had also shrunk by $1,200, a byproduct of moving to a less expensive town and renting a substantially smaller home.

Lauren kept a close eye on the household budget and continued to coupon. Friends began asking questions about how to cut their own grocery bills, so she started to offer local seminars. In 2010, she started the blog I Am That Lady and began to share her expertise with a broader audience. “We were trying to find extra ways to make money” to pay off their outstanding debt, she said. At first, her site brought in an extra $200 per month. Then it grew into a full-time income.

The Greutmans used all that extra money to pay down their outstanding debt. It took just three years to become debt-free after moving from Charlotte to New York.

Getting Ahead

Over time, their family of four grew to a family of six. Their rental history, combined with their debt repayment, had bolstered their credit scores to the mid-700s. They decided it was time to move to a bigger place – and to once again own a home. The second time around, though, they did things differently. They bought an existing home, and it was much smaller than the one they’d owned in Charlotte. Most important to the Greutmans, it was cheaper. The new home came with a mortgage payment that was just $100 per month more than they’d been paying in rent.

Everything happens for a reason. Now I get to use my experience to help others

That’s not the only change they made. I Am That Lady became so successful that Mark ultimately quit his full-time job as an actuary to work at home with Lauren. “Our income is way more than it was back then. Plus, we really desire a simpler way of life. When Mark quit his job it was more of a lifestyle decision than it was a money decision,” Lauren said.

Lauren used some of that time to write about their experience for her upcoming book, The Recovering Spender, which will be published by Hachette Book Group/Center Street Publishing in September 2016. With both of them at home during the day, they have more time to spend with their children and more time to communicate with each other. “We work together now. We don’t hide things,” she said.

When asked if she had any regrets, Lauren said no. “Everything happens for a reason. Now I get to use my experience to help others,” she said. “If it weren’t for what happened, we wouldn’t be where we are today.”

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