Outsmart Debt Like a Mom

Being a mom is hard work; being in debt makes it even more difficult. And tackling that debt while juggling other family responsibilities can feel impossible. Where do you start? How long will it take? What do you tell the kids?

Plenty of moms have been in this position, each with her own journey toward debt relief, from getting a personal loanto selling the family home. We asked three mothers — and one new mom who’s a certified financial planner — to share what they know about paying down debt.

First, everyone has a different starting point

For some, like Cherie Lowe, a mom of two girls who runs the personal finance blog Queen of Free, a smaller change made a difference. She and her husband paid off almost $127,500 in debt over four years — starting with $100 a month.

“The first thing we did was adjusting my husband’s withholding,” Lowe says. “We didn’t get a tax refund, but it allowed us to have an extra hundred dollars that we weren’t already living on to help us pay off our debt.”

Big changes, however, can bring immediate relief. Laura Dobbins, who runs thepersonal finance blog My Shiny Nickels, didn’t imagine that her house would be the first thing to go. But selling her dream home — which had a $400,000 mortgage — and moving with her husband and four children into a smaller place was the first change she made. It reduced her overall debt by $30,000 in the first year. “We don’t regret it a single day at all,” Dobbins says.

Julie Mayfield, who writesthe personal finance blog The Family CEO, was a stay-at-home mom with two kids when she decided to get her family’s finances in order. The first step she and her husband took toward paying off $47,000 was making debt payment her job.

“We approached it from a place of intention,” she says. “What do we want to spend money on, and what are we spending money on that isn’t important? That worked for me better than to just be penny-pinching all the time.”

The best lessons learned along the way

For Dobbins, the key is finding what motivates you. She gives herself small wins to headoff burnout, by tackling debts from smallest balance to largest rather than according to interest rate. “If your largest-interest-rate debt is $25,000, you’re going to get three years in and be like, ‘What am I doing again?’”

Mayfield found ways to reassess over time.

“If you can refinance your mortgage or get rid of private mortgage insurance, or cars, or rent, the big stuff comes first,” Mayfield says. “After that, I think it’s helpful to focus on the consistent things, the things that come up every month — the cable bill or eating out — because that’s going to be where you get the most results from your efforts.”

Realize there will be unexpected expenses. “We were prepared for there to be uncontrollable variables as much as we could be,” says Kelli Grant, a personal finance reporter and certified financial planner who recently had her first child with her husband, a freelancer. But certain challenges still took them by surprise. “Our little guy grew super fast, so we were perpetually looking for larger clothes and larger shoes.”

If you’re an expectant mom who’s worried about getting in debt, Grant stresses planning for your newborn’s expenses. “Babies have hospital bills, too,” she says. “My son had his own bills from being there. Insurance counts him as a separate person with his own limits and deductibles.”

Kids can handle the truth

Dobbins enlisted her children’s support on the same philosophy that she and her husband held themselves to: “We can do anything for a year.”

Honesty and attitude are key, she says. “When we moved, they knew that that’s why they were moving, and they obviously were not thrilled,” Dobbins says. “We tried to be positive about it ourselves.”

And over time, being transparent with her children has served them well, Dobbins says. “The kids are super aware of money now,” she says. “They have this mentality about where money goes.”

Lowe started paying down her family’s debt in 2008, duringthe housing market crash — news that her eldest daughter heard about, too. “The headline was something like, ‘Trouble on Wall Street Means Trouble on Main Street,’” Lowesays. “We live on Main Street, so she was asking, ‘Why is there trouble?’”

Lowe and her husband decided that they had to be as honest with their kids as possible. “We told her, ‘We borrowed more than what we should have, we’re going to pay it all back, and that means we’re going to make some changes in the way we live our lives,’” she says. And she was sure to answer anyquestions her daughters asked about the family’s money situation.

Grant plans to let her son know how the family finances are handled. For now, she’s thinking of the future.

“College costs obviously are a big one,” she says. “My husband and I thought about that right upfront. I’m still paying off my own undergraduate student loans, so I’m juggling that with my other financial goals. But we made it a priority to put aside money every month for his college savings.”

Unconventional savings are optional

Lowe recommends holding off on more unusual penny-pinching strategies until you’ve done the essentials. For herself, once the groundwork was laid, she found creative ways to further cut costs.

“We didn’t have [cable] TV at all for a while. The only thing we had at all was a VCR and a DVD player. My husband built our own antenna out of a two-by-four and hangers,” Lowe says.

Some changes happened accidentally. “Our microwave quit working while we were trying to get out of debt and I decided to wait 30 days before buying one. And then we never replaced it,” Lowe says.

Mayfield doesn’t recommend outside-the-box saving strategies. “I didn’t sell my plasma,” she says. “We didn’t do anything that crazy.”

Grant found that her priorities changed in ways she didn’t anticipate. “Coffee was never something that I enjoyed before having a baby, but now that we’re routinely awake at 5 a.m., we put aside money for coffee shipments,” she says.

No matter what your financial situation, there’s a positive way forward. Check out this guide to paying off debt to find out where you can get started.

Veronica Ramirez is a staff writer at NerdWallet, a personal finance website. Email: vramirez@nerdwallet.com. Twitter: @veraudrey.

The article Outsmart Debt Like a Mom originally appeared on NerdWallet.