How One Family Followed 4 Steps To Dig Out Of $142K In Debt

MINNEAPOLIS (WCCO) -- Surveys show more than half of us are living paycheck to paycheck, but money experts say it's possible to get off the financial ledge in the New Year by following four simple steps.

It's the same advice the Turner family followed to turn things around. WCCO looks at how they dug out from six figures of debt to find financial freedom.

Music helped Luke Turner find happiness in the midst of a hard life in the scenic city of Cape Town, South Africa. He was one of seven family members who, for years, slept in a minivan. As he got older, he'd find money lessons didn't come as naturally as his musical talent.

"By the time I realized I was going to have to pay this back, I never put into place how much it really was," he said.

Luke married Joy, a Minnesotan after they met at an outdoor music festival. College would cost him $100,000 while Joy had her own $20,000 in school debt. Toss in credit card bills and cars -- their debt totaled $140,000.

"That was just really overwhelming, really overwhelming," Luke said.

The Turners made minimum payments on their loans while trying to cover the costs of their growing family, until Luke picked up a book about the best way to dig out.

"I said to my wife, 'I want to be there. We are going to do this,'" Luke said.

Financial expert Nicole Middendorf has seen the same situation many times before.

"We live in a society of having to have everything now," she said.

When you're truly ready to turn things around she suggests four these steps:

1) Write down everything you spend in one week's time.

"After those seven days, take a step back and see if there's an area that you spent money in that you really didn't recognize, you didn't remember or you felt bad about," Middendorf said. "Then take all of that money you spend on those extra things and cut it in half, and give that to yourself as an allowance."

2) Build a budget

"It's figuring out where are you spending money, and what can you cut back, or what really is important to you," Middendorf said.

The Turners cut out eating out and vacation and started to plan meals days ahead.

"We've never been on a budget before, and it was just amazing the big difference it made," Luke said.

Joy even timed her grocery store runs so she wouldn't spend any more time in the store to buy unnecessary items.

"We just knew that we had to stick to it," Joy said.

3) Put your credit cards in a glass of water and freeze them.

This step may sound extreme, but money experts call it a sure thing.

"You're going to actually have to stop, and think, and wait before you actually spend that money," Middendorf said.

Middenorf says wants will pass, since spending more than you have will require thawing your cards out first.

Meanwhile, the Turners got to work attacking their loans as Luke picked up extra performance gigs.

"It was almost like a game of chess in my mind," Joy said. "How he was looking at it was, 'Oh, here's an extra $20. It's going to go on that loan.'"

To pay off $142,000 took the Turners five years and 11 months.

"I said 'We are debt-free,' and it didn't really sink in until I got that piece of paper in the mail that said 'Congratulations, you have paid off your loan!'" Luke said.

Which brings us to our experts' final step:

4) Once you're out of debt, max out your retirement contributions.

"You want to live life proactively, rather than reactively," Middendorf said.

For the Turners, it meant finding harmony in a new area.

"Living a modest, simple life, there's freedom in that," Joy Turner said.

For more a list of some budget-saving apps and software, check out Nerdwallet.