Money Makeover: Boston Family with $56,000 in Credit Card Charges Clips Coupons to Get Out of Debt

A reality check often comes after some sort of hardship, especially when it comes to financial struggles. Each week in January, Go Banking Rates is profiling the big wins of individuals and families across the country who have successfully overcome their own financial battles to start the New Year with flying colors in its “Money Makeover” series.

This week’s installment of the series shares the story of one Boston family whose reckless spending and ineffective money management drove them to common debt problems like maxed-out credit cards and an inability to pay for basic needs. Isra Hashmi, founder and blogger at, and her husband, Fahd, a CTO at, fell into this spending trap.

However, after years of hard work and perseverance (and coupon-clipping), they knocked off $56,000 in debt. Here’s their story.

Go Banking Rates: How did you accumulate $56,000 in debt?

Isra: Overspending on items that were way out of our budget, not keeping track of how much we have and how much we can spend, and maxing out our credit cards and applying for more.

What was the turning point? Why was it so important to get out of debt, after living such an extravagant lifestyle for so long?

Isra: The turning point was when we had our second child, and realized our credit cards were maxed out when we needed to buy basic things like diapers and groceries. There was a long period before the next paycheck and we had basics we needed to buy.

We didn’t want to pass on any debt to our children and wanted to make sure we set a good example for them on being responsible with money. All the luxury and shopping means nothing if you are barely getting by each month.

How did you pay off your debt? What specific strategies did you use?

Isra: We did several things to get out of debt.

The first thing we did that made a huge difference right away was to move apartments. Within a month we were able to save $600 on rent by taking a cheaper apartment in the same building. Since we stayed in the same building, the management didn’t penalize us for moving in the middle of the contract. We had just had our second child, it was the dead of winter in Boston and somehow we packed up everything and moved!

The other thing I did was taught myself how to use coupons. I didn’t even know what a coupon was, but I remember seeing a news program about a family that never pays for pasta, diapers or anything because of coupons.

I spent long hours online teaching myself, and within 2 months I learned how to get things for very cheap or free using coupons and sales. All the money we saved on groceries and toiletries gave us extra money to pay down the debt.

At the height of using coupons, I was saving approximately $1,000 per month. I sold a lot of things on Craigslist — anything to find extra cash that could be used to pay off the debt.

I cooked at home (we used to eat out a lot), and by eating at home we saved another $200 a month.

The obvious thing [is] we stopped shopping. If it wasn’t a necessity, we didn’t buy it. No shoes, no vacations, no toys — all of it stopped right away.

Fahd: Ironically, when we got in a position where we weren’t able to make our minimum payment, we had the most negotiating power with the credit card companies. They had no choice but to work with us to make the payments affordable, and on several of the credit cards we negotiated a settlement that took thousands off of what we owed.

Describe a typical trip to the grocery store. How did you commit to staying frugal while browsing the aisles?

Isra: I always kept a shopping list. I knew what I was buying before I got to the store and stuck to it. If it wasn’t on my list, I didn’t buy it, so no impulse purchases.

Also, if it wasn’t on sale, I didn’t buy it, period. Even if I was craving a New York strip steak, I chose a cheaper option: Beef stew. If apples were on sale and I really wanted oranges, I chose apples. When items like cereal were on rock-bottom sale, I stocked up. Instead of buying 1 box, I would buy 5 to last us to the next sale, so we never paid full price for anything.

I always left the kids home, which always saves money! Somehow an unintended purchase ends up in the cart when they are with me.

What kinds of “luxuries” did your family go without while working to get out of debt?

Isra: Too many to count! We stopped eating out totally; no Sunday brunch, no Starbucks coffee, no Friday night take out. We stopped taking vacations, we didn’t go anywhere. My husband and I stopped shopping for ourselves (no new clothes or shoes). We basically stopped spending on anything that wasn’t vital: Food, shelter, diapers, medicine.

We always asked ourselves, do we need it or want it?

What was the most unexpected thing you experienced while on this money makeover?

Isra: How very little we need to get by. All the things we buy that feel like a necessity are really not. We focused on each other rather than on things and acquiring stuff.

I also found a creative side to me I never knew I had. It’s amazing how you find a way to make do with whatever you have when you can’t buy anything!

What were the biggest challenges for you and your family along the way? How did you overcome them?

Isra: Patience and sticking with it. It took us 3 years to completely pay off all our debt. That’s a long time of sacrifice to go without and many times thinking it would never end. It’s very easy to fall back on your old ways.

For us, we had each other. We were a team and when one of us felt like giving up, the other one was there for encouragement and support. It’s very important to have a support system when getting out of debt.

What is the next step for your family after such a huge accomplishment?

Isra: Aggressively saving! I’m still using coupons, but now all the money we used to put toward our debt is going into savings. We have loosened up our spending just a bit; we go out to eat as a family sometimes, as a treat.

When we were struggling to get out of debt, we always picked up Disney World vacation brochures, so maybe one day we’ll go to Disney World!

What advice would you offer to families struggling to get out of debt?

Isra: You didn’t get into debt overnight and there is no quick fix that is going to get you out of debt in a day. It will take sacrifice, guaranteed.

It’s critical to ask yourself how you got into debt in the first place and stop doing it! Stop shopping and spending — we all think we aren’t, but then we wouldn’t be in debt. And be a team. If one is not willing to do their part it won’t work.

Photo credit: Chris Potter