ONCE UPON A TIME

Change is painful. Few people have the courage to seek out change. Most people won't change until the pain of where they are exceeds the pain of change.

DAVE RAMSEY, The Total Money Makeover

ONCE UPON A TIME ... every great story has one. No matter the "happily ever after" or the many details in between, it simply wouldn't be a great tale without a "once upon a time." This is my family's once upon a time. Honestly, though, our story is fairly ordinary rather than fairy-tale extraordinary. However, I often need to answer the "How in the world did you end up with $127,000 in debt?" question before I dive into the methods we used to eliminate it. So without further ado:

Once upon a time ...

Fresh out of college and married for only a month, Brian and I moved to a new city so he could begin law school. We were both unemployed and incredibly clueless about finances. We were living on love and chips and salsa from Chi-Chi's, which was the restaurant nearest to our less-than-luxury apartment. I landed a job working full-time for a church while Brian went to school, clerking whenever his schedule allowed. For the next three years, most days seemed to follow that same pattern: Work. Chi-Chi's. School. Repeat. We didn't live recklessly. We didn't buy a million-dollar home. We didn't wear designer clothes. Due to the hectic nature of higher education and church ministry (okay, we were also lazy, and I really liked seafood enchiladas), we had a serious dining-out problem, but overall we weren't wild with our resources.

Our main plan for our finances, though, was not having a plan. Chalk it up to newlywed ignorance or a lack of financial literacy or that we were still living more like children than adults. But that lack of a plan was our first big mistake, and after a while it caught up with us. The brakes would go out on the car. Pull out the Visa! When we didn't have enough cash to go out with friends for dinner? Well, hello there, my little plastic compadre. Doctor's visit? Guess we should charge it. I mean, we have to go, right?

Eventually, Brian finished law school and found a good job. A couple of months later, I gave birth to Anna, our amazing first daughter who turned our hearts inside out. I quit my job to stay home with her, so we never even got the chance to fall into "the two-income trap."1 We bought a house. In the eyes of the world, we were living the American dream. Graduated from college? Check. Married? Check. Law school, baby, home owners? Check, check, and check. These were all things that we were supposed to do as young adults. We were nailing this grown-up thing.

Then the student loans came due. We deferred them.

They came due again.

It seems a bit astonishing to me now that we continued to live without any real financial planning for the next five years. We celebrated birthdays and anniversaries. We wished each other Merry Christmas. I went to graduate school, and when Anna was a toddler, I took on a part-time job at a different church. We went on vacations. We bought a new car. Life moved along as it often does, in the day-to-day of grocery shopping and laundry, holidays, and weekends.

Don't get me wrong. Brian and I weren't living in a stress-free, la-di-da world. While we loved each other and even enjoyed our lives as a small family, there was this underlying tension that I can't quite describe. There were no big blowup fights about money. But there was an occasional angst-filled, passive-aggressive moment or two along the way. Did we really need that? You bought what? Brian and I rarely discussed how much was in the bank, let alone any goals for our finances.

Enter the part of me that wishes I could sensationalize our story for you. I once was asked if I had bought something I loved in every color and maxed out our credit cards on designer shoes. That's simply not me. I wish I could tell you that we went on some killer vacation with beautiful ocean vistas and a pricey, high-flying skydiving experience. Didn't happen. Did we buy a yacht? Nope. How about an RV? Nope. Did we take our kids to Disney World every week? month? year? Nope, nope, and nope. Did we have awesome computers and smartphones and amazing technology in our home? Uh-uh. Was our house a McMansion? Pbfft.

Aside from the mortgage on our home—a small and very modest 1950s brick ranch—our debt consisted of what most people would consider run-of-the-mill expenses. Oddly enough, approximately ten months before we launched into our debt-slaying journey, I was contemplating returning to work full-time. In my mind, employment would help us "get ahead" financially, and Anna was ready to begin kindergarten anyway. We could relieve some of the pressure we were feeling and maybe be able to afford a few of the extras so many friends seemed to regularly enjoy. Then unexpectedly I discovered I was pregnant, and everything changed. God had blessed us with new life.

He'd also given us another reason to think seriously about how to dig ourselves out of debt, which was comprised primarily of four large obligations. We owed close to $89,000 in combined student loans, including my husband's undergrad and graduate school debt as well as a loan from one semester of my collegiate experience. (Thanks, Mom and Dad, for covering the other seven semesters!)

Then we owed over $16,500 on one major credit card. Again, I wish we had something to show for it. But there's no killer house addition, no walk-in closet filled with stylish clothes, no four-wheelers or vacation photos. We simply nickeled-and-dimed our way into five figures of debt-spent to cover household repairs, groceries, small gifts, dining out, new brakes and tires for the car, all very boring stuff.

We also had a car loan to the tune of about $12,000. Our vehicle was quite modest by our reckless standards, so we'll call that one a grace-filled "oops."

The final piece was the medical debt. In mid-March 2008, our second daughter, Zoe, made her arrival. She brought life, grace, and energy into our lives. She also brought a big heap of medical bills amounting to $5,700. We hadn't planned on that either.

On top of these four major obligations were a few minor debts like a $2,200 root canal for me (that was no fun and expensive), $1,000 in furniture we had purchased on a payment plan, $100 on a department store card, and interest paid along the way.

While not so glamorous, these debts totaled well over $127,000, a figure that typically makes people's eyes bulge bigger than Homer Simpson's when I share it with...