How This Couple Made $332K Worth of Debt Disappear While Raising 4 Kids
Don’t we all wish life were more like “The Brady Bunch”?
Two parents, both in their second marriages, could blend their families. There would be comedic dysfunction, yet all would end well.
But reality is a much different show.
Kids, ex-spouses, custody battles and emotional trauma often contribute to the 67% of second marriages that end in divorce.
Plus, couples bring more financial assets — and debt — into a second marriage. Each person often has goals and spending habits they don’t intend to change.
Pete and Maria Sbashnig knew all that when they got married in 2008.
To keep things the same for their kids after their divorces, each had lived in houses they couldn’t afford on their single incomes and used credit cards to fill in the gaps.
Pete had been divorced for two years when he married Maria. He had joint custody of his son and daughter. Maria had been divorced for six years with full custody of her two daughters.
All four kids played sports, and the whole family would take trips for competitions and tournaments. The sporting events brought the family together, but financially, they added up.
“I just remember being so overwhelmed with the family dynamic and the blending of the family that finances weren’t even a consideration,” Pete said.
About a year and a half into their marriage, Pete found a net worth calculator on Bank of America’s website. His 401(k) had almost six figures, so he thought he was doing pretty well.
Pete, then a letter carrier, and Maria, a payroll specialist, had never combined their finances, so he figured it was time to see where they stood.
Midway through listing their debts — which included two mortgages, a home equity line of credit, two car loans and over $60,000 in credit card debt — he realized it was going to surpass their assets. But he didn’t realize by how much.
Their total debt was $332,000, putting their net worth at a negative $244,000.
“After looking at this number, I had an emotional breakdown,” Pete said. “I personally felt that I was a complete failure. I was in my mid-30s, already divorced once. We were struggling to keep the new family together, and now it looked like we were bankrupt.”
Maria knew she’d made some financial mistakes, such as taking out an interest-only mortgage. Still, she felt she was managing her finances well enough.
“I had been on my own with my kids for six years,” she said. “I liked the fact that I had control over my own money because I was not letting anyone control me or my money.”
How They Started Blending Finances
The next day on his mail route, Pete changed the radio station from the sports broadcast he typically listened. He came across a guy giving callers debt-payoff advice. That guy turned out to be debt-free living evangelist Dave Ramsey.
When Pete told Maria the advice he’d heard, she knew the timing was too perfect to be a coincidence; she took it as a sign.
So together, they set out to eliminate everything but their mortgages.
“[Pete] approached it like, ‘We’re in this together. We’ve been doing this ‘your debt/my debt’ and ‘your bills/my bills’ this whole time, but that’s not the way it’s supposed to be,’” Maria said.
They had $5,000 in cash, but they used all but $1,000 to pay down debt. That made Pete anxious.
“It’s not like $5,000 is a ton of money, but it felt like a big security blanket,” he said.
In the first couple months, they had setbacks. They had to replace their water heater and dryer, pay for a car repair and, to top it off, had a subterranean termite infestation.
But these troubles didn’t happen all in one day. None of them cost more than $1,000, so they paid for them using their emergency fund and replenished it every payday.
How Teamwork Helped Them Crush Their Debt
Pete took side jobs to increase their income. He umpired baseball games, mowed lawns for people he delivered mail to, and helped his dad with his landscaping business.
Maria cut the family’s expenses. She clipped coupons, cooked meals at home and limited school shopping.
“He played offense, and I played defense,” Maria said.
They paid off $65,000 in 17 months while making less than $100,000 per year combined.
“The first year, we didn’t eat out,” Pete said. “We ate out once. We got two pizzas. We spent $19 on two pizzas.”
They saw that when they worked on their finances together, they did exponentially better than they did when they managed them separately.
After they tackled their short-term debt, they worked on the mortgage from Pete’s prior house — which was underwater — and its home equity line of credit. They finally sold it in 2013 and started focusing on the last debt: their mortgage.
What About the Kids?
When Pete and Maria started paying down debt, their kids ranged in age from 8 to 14. Needless to say, the change in spending was an adjustment.
The kids started doing more chores around the house to earn money and were limited on what they could pick out at grocery and clothing stores.
They were all allowed to continue doing their sports and competitions — just without the frills, which sometimes caused resentment.
“They didn’t like the fact that we’d go to the baseball tournament and everyone was going out to eat, and we’re like, ‘Sorry, we’re going home,’” Maria said.
The Sbashnigs also wanted to make sure their children didn’t start their adult lives fighting to get out of debt, so they wanted to save for their college. But they made sure the kids had some skin in the game.
Their children all had to apply for scholarships. Ultimately, a state program paid for 75% of their tuitions. Pete and Maria supplemented the rest, along with housing and books.
With two kids now out of college and two entering their sophomore years, the Sbashnigs say their children are making their own financial decisions. They’ve seen what you can accomplish by saving and investing, and they’re on the path to doing well with money.
Debt-Free Now — So What’s Next?
In November 2017, Pete and Maria paid off their house — the culmination of a $332,000 debt-payoff journey that spanned almost a decade.
Now, Pete and Maria travel and live with a freedom they’ve never experienced before.
Shortly before they paid off the house, Maria’s employer cut her work-from-home hours. Because they were so close to being debt-free, she was able to take a part-time job at a law firm. The job change cut her income, but it allowed her to be at home even more. It was a choice they wouldn’t have even been able to consider before.
Moving forward, Pete and Maria want to help others in similar situations — people in divorced or blended families — through their blog, books and counseling.
Pete and Maria hope their story will encourage others to work together to get stronger.
“One Belgian horse can pull 8,000 pounds, but you put two of them together — and train them properly — they can pull three times that amount,” Pete said. “That was the same thing we found when we worked together.”
Jen Smith is a staff writer at The Penny Hoarder. She gives money saving and debt payoff tips on Instagram at @savingwithspunk.