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How do you get out of debt? Local 'debt wreckers' share secrets

By Cassandra Webb, cwebb@ktxs.com
Published On: Feb 25 2013 09:21:11 PM CST
Updated On: Feb 26 2013 02:07:25 PM CST
ABILENE, Texas -

It's no surprise that times are tough for many people when it comes to their finances.

Recent numbers show the average American household has more than $15,000 of credit card debt, which doesn't even include home mortgages and student loans. 

Suffocating under a mountain of debt can feel hopeless, but getting out from underneath is not impossible.

Abilene "debt wreckers" shared their stories.

They're ordinary people with extraordinary triumphs. 

Todd Stowe is a single father of three.

Three years ago, he had over $40,000 in consumer debt.

In the end, he had nothing to show for it.

"The world was coming down on me, truthfully," said Stowe. "I felt desperate. I was going to work and doing everything for somebody else and not for my family, not for my kids," he said.

Like most people in his shoes, he knew he needed a change.

"I had to show my kids better than being in debt," Stowe said. "I couldn't have them seeing me like this, all the time, struggling from paycheck to paycheck."

Stowe took a financial management class and hasn't looked back since.

In three years, he's paid off over $46,000 and now only owes on his mortgage and vehicle.

How did he do it?

Stowe created a budget, sold stuff and lived within his means.

"The biggest thing is you have to live inside your means," Stowe said. "If you make a certain amount of money, you can't spend more than that - ever."

Other "debt wreckers" agree and say that a budget is essential.

"Once you get the budget and you have success with it, it's the piece that holds it all together," said Renee Morrow.

The Morrow's earn an average income, yet they were able to pay off more than $30,000 of debt in just three years.

"You just have to make the decision and the choice that we have to stop this behavior," Renee said.

Contrary to the norm, Stowe and the Morrow's only buy things with cash.

They use an envelope system, where a set amount of cash is pulled out every paycheck and literally put in envelopes for different uses - groceries, fun money, dining out, etc.

However, once that money's gone, it's gone.

"There's no more money going back into that envelope until the end of the month, until I get another paycheck," Stowe said.

As for credit cards, our "debt wreckers" advise paying them off and never using them again.

"It's not worth it," Stowe said. "Save your money and finance yourself. Do your own credit. Be your own creditor. We don't need to be a slave to anybody and certainly not to credit card companies," he said.

Concerns about cutting up credit cards revolve around one's Fico score. Isn't it necessary?

According to Stowe and the Morrow's, that's an old state of mind.

"You're still thinking in a debt-minded mindset that I've got to have a Fico score so that I can go finance something," said Steve Morrow.

Here are some simple steps to get started:

1. Simple stop creating more debt.

2. Get on a budget so you know exactly where your money is going.

3. Start saving so emergencies can be handled without too much stress.

How is life now for these "debt demolishers?"

"We don't think about money all the time," said Renee Morrow. "And we were thinking about money all the time."

"I'm free," said Stowe. "I'm a debt-wrecker and I'm not going back into debt."