Clark Howard: One Family’s Journey to Financial Freedom

One family’s journey to financial freedom

In the course of counseling debt-ridden families, Clark constantly hears from dual-income couples with no kids who say they can’t keep up with their bills. But imagine having 1 income, 7 kids and eliminating nearly $60K in credit card/car loan debt. Now imagine doing all that in just 4 years! Sounds impossible? That’s the financial feat Clark’s listeners Roger and Maggie have just accomplished.

As a self-employed software consultant, Roger brought in an average net income of $90K-$110K/year between 2004 and 2008. Most of the couple’s 7 children were in their mid-to-late teens during these years, so some of the financial pressures that young families face were off. Yet by Oct. 2004, the couple had accumulated more than $58K in debt between medical expenses and the maintenance and upkeep of 2 cars (one of which was still being paid off).

That was when Roger and Maggie decided they had to get their debt under control. They say they didn’t even consider using an outside debt-consolidation service. They just worked up a monthly budget — which factored in the credit card payments — and stuck to it.

Upon analyzing their finances, the couple also decided they wanted to reign in uncontrolled spending by concentrating more on needs than wants. That meant they trimmed back on impulse purchases such as books and DVDs. But they didn’t go cold turkey and stop spending completely; they simply started questioning what they were charging.

Using Quicken, Roger was able to set up a graph that automatically charted the family’s month-by-month spending. They didn’t look at the graph for more than a year. But when they finally did, Roger and Maggie saw that their level of debt was dropping. The progress really inspired them and helped keep them on the path to becoming free from debt. By Jan. 1, 2008, the couple had paid off all of their credit card debt and their remaining auto loan. Talk about a way to ring in the new year!