How Our Family of 5 Went from House Poor to Debt Free in 3 Years

Hello! Today, I have a great success story that I want to share with you all. Enjoy. I’m Renee, mom to a crazy, beautiful, blended family of 4 kids. As a practicing minimalist and debt-free enthusiast, I’ve dedicated my blog, The Fun Sized Life, to helping others learn to simplify their lives while simultaneously increasing…

Michelle Schroeder-Gardner

Last Updated: April 30, 2024

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How Our Family of 5 Went from House Poor to Debt Free in 3 Years

Hello! Today, I have a great success story that I want to share with you all. Enjoy.

I’m Renee, mom to a crazy, beautiful, blended family of 4 kids. As a practicing minimalist and debt-free enthusiast, I’ve dedicated my blog, The Fun Sized Life, to helping others learn to simplify their lives while simultaneously increasing their wealth.

I focus on helping others because just a few years ago, I had life all wrong.

Three years ago my marriage was on the rocks, I felt aimless in my career, our family life was messy, and we were officially smack dab in the middle of being crazy house poor.

We got to a point where we knew it was either cut our losses and walk away from our marriage, or take a hit and sell the house that was breaking us.

We knew what we had to do.

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Our story

When my husband and I moved to our dream city in 2008 we had big dreams for where we would end up. At the time it was just the two of us raising his daughter from a previous relationship.

Living in a modest townhouse was perfect for our soon-to-be growing family, but we had dreams of eventually making our way to the big neighborhood just down the street.

We fantasized that when we were finally able to live in that pristine neighborhood with big trees, large driveways, and vaulted ceilings we would have officially “made it” in life.


How Our Family of 5 Went from House Poor to Debt Free in 3 Years

Moving up in the world

In 2013 we did it! We moved into a beautiful, 3,400 square foot home with 4 bedrooms, 4 bathrooms, 2 living rooms, 2 dining rooms, a loft, walk in closets and a fully finished walkout basement with a creek in the backyard.

Everything felt so dream-like and perfect. We had more than enough room for our now family of 5 (plus an older sister who visited on the weekends.) I was able to set up a photography studio in the front living room/dining room area and the kids had a playroom filled with toys.

From the outside it appeared as though we had finally accomplished all of our biggest dreams. What we didn’t realize is that we were on the fast track to getting ourselves seriously in debt. Not mention we were about to have some major realizations about the downsides of owning a big house.

Related: How Much Money Should I Save Each Month? 


Big house, big yard

Because the house we moved into had been foreclosed on, we knew there would be some work involved in sprucing it up again.

There was gardening and landscaping throughout the entire front and back yard and along the side of the house. We couldn’t wait to get our hands dirty and start bringing these once beautiful gardens back to life!

Having previously lived in a townhouse, my husband Tom was psyched to start mowing is own lawn and raking his own leaves. He loves stuff like that.

We spent most of our fall days outside digging and weeding and seeding and sweating. It was great. More than anything it felt great to see the all of our hard work pay off.

When winter came, it was a little disheartening to have all of our hard work covered in snow and a new realization that the inside of the house required even more work than the outside.


Trying to make a house a home

As soon as we moved in we needed to purchase appliances because the house didn’t come with everything. We used our credit card to get a new refrigerator, washer and dryer. A few months later we decided to upgrade the rest of our kitchen appliances to match the new refrigerator. Those appliances went right onto the credit card as well.

On top of new appliances, we hoped to someday update the all the cabinets, flooring and bathrooms and get all the walls painted. Not to mention, change out the brass chandelier hanging 20 feet high in the main entrance. That thing was an eyesore but we didn’t have a ladder tall enough to do anything about it.

Because our new house had more room, there was also more space that needed to be filled. Most days I would just stare at the empty spaces in a panic. I knew it would take a lot of work and money to make this house feel more like a home. Open space and bare walls made the house seem so empty and cold all of the time.


More room, more mess

When we moved in, I was so excited that the kids were able to have their own toy room! I was so naive. It wasn’t long before I realized that having their own toy room didn’t stop them from still destroying the entire house in the span of 20 minutes.

The house was so filled with toys that once I took the time to count all the rooms that were littered with toys. Eleven! I was cleaning up toys from eleven different rooms on three different levels. Not exactly my favorite workout.

It wasn’t long before I grew tired of constantly cleaning. I could barely keep up when we were in the townhouse. Besides all the toys, Tom had used to help me out with dishes and cleaning. Now a lot of his time was spent shoveling snow, mowing the lawn, and making sure all of our appliances were running properly. It started to feel like we hardly ever saw each other.

We barely saw each other and when we did, we had almost no energy left to devote to one another. The upkeep was really taking it’s toll.


Big house, bigger payments

When we first moved into “the big house” we knew our mortgage payment would increase. What we didn’t bargain on was that it would increase by over $700 per month.

Needless to say, Tom didn’t like this huge jump in house payment. I could say that our realtor was partially to blame by misleading us greatly as to what our final house payment would be, but at the end of the day, the final decision rested on our shoulders.

Based on the fact that my photography business was doing really well, we crossed are fingers and hoped we would make it out alive. There was no crunching numbers, no calculating our budget, nothing like that. Just the careless assumption that everything would work itself out.

On top of the cost of the mortgage there were so many additional expenses that we didn’t think about or plan for.

Things like:

  • Lawn mower
  • Snow blower
  • Lawn care
  • Appliance upgrades
  • New furniture
  • Extra heating and air conditioning expenses
  • Higher property taxes

At the end of the day, a bigger house meant bigger everything. More space to heat, more to rooms clean, more space to fill.

After 2 years we were overwhelmed and it was killing us.


Our non-existent financial plan

As I said, we went into this drastic, life changing decision without having any real financial plan in place. I’m so embarrassed to even type this out.

Our big game plan was simply hoping I would make enough with the photography business to cover the additional $700 per month.

We had no plan for saving money.

There was no emergency fund in place.

On top of not having a solid financial foundation to stand on, the budget we were working with was barely a budget at all.


Our barely budgeted budget

Back then, when we first moved into the house, I had a really poor concept of exactly how money worked.

My budget consisted of taking Tom’s monthly earnings and subtracting our mortgage and all of our bills. By the time I was done, we would have around $1,000 left each month.

To me, this was a great budget! I thought we were doing amazing if we had that much money left over at the end of the month! Plus, that wasn’t even including my photography earnings!

What I failed to take into account was groceries, gas, savings (both big and small.)

If I had taken the time to consider these things, I would have quickly noticed that in fact, we didn’t have any of Tom’s paycheck left at the end of the month.

To top it all off, Tom and I never actually discussed our budget together. Which meant when the money started running out each month I would tell him not to buy gas, or socks or…anything. Being the sole money maker, this didn’t make him feel any better about our decision to purchase a more expensive house. He blamed the house. He blamed me.

Even when I was bringing in a ton of extra money from photography, we had no discussion about how we would spend that money. More often than not, my earnings were spent on entertainment and going out to eat. Even when I did use the money to pay off a credit card, there was still no discussion or plan about it.


The photography business

At first, I was so thrilled to move into this bigger house that allowed more room for a photography studio. My original plan for the business was to have it be be a sustainable income by the time my daughter was 5.

To my surprise, it took way less time than that for me to start seeing a big profit.

I had clients coming in from left and right. I was photographing in the studio, doing senior portraits, weddings, fashion shows, modeling shoots…you name it, I did it.

Naturally, I was thrilled that the business was doing so well and that my name was getting out there. What I wasn’t doing was treating my booming business like a business.

None of my earning went into savings or back toward the business. Instead what we did was take whatever money I earned and use it as “fun money.” Sometimes we’d take a vacation, other times we would go shopping and occasionally I would make a $2,000 student loan payment. Total chaos.

To be honest, there was no shortage of money, just a major shortage of planning.


House poor

The first time I learned the term “house poor,” I didn’t think it applied to me. We had tons of money. We were able to make our house payment, so it wasn’t the house’s fault.

…But then, whose was it?

Ours. It was all our fault.

The term house poor is just a nice way of saying people purchased a house way out of their price range.

We as a society are maxing out credit cards left and right just to try and keep up with the ever-changing trends. Having the biggest and best house on the block too often takes top priority over ensuring we have enough money stashed away for retirement or a job loss.

Thanks to technology and social media it’s becoming easier and easier to try and keep up with the Jones’s.

House poor was not an unavoidable problem, it’s was choice we made (and many other people make every day.)


Falling apart

The lack of financial planning and constant upkeep of the house took its toll.

Tom and I became like two strangers. He carried around a lot of resentment toward me and stopped being the helpful husband he once was. I did my best to make as much money as possible in order to ease his financial worries. It didn’t help. Especially when I would spend thousands of dollars without consulting him first.

I wish it was just our marriage that was struggling. Unfortunately, our oldest daughter spent all of her time in her conveniently hidden basement bedroom and bathroom. She wouldn’t even come up for dinner most days.

It was easy to just shrug it off as typical teenage behavior. What we didn’t realize was that she was struggling with depression and anxiety. The big house just made it easier for her to alienate herself from the rest of us.

We were all drifting apart. There were less conversations, less laughter, and less time together.

After 2 years I realized we were living life all wrong.

Photography felt all wrong.

Even the people I was photographing seemed like they wanted to capture a false image of what their life was like. Behind the scenes they were fighting, and screaming, and threatening their kids. In the picture they were well dressed, and smiling happily. Maybe I started to resent photography so much because I related to those false images all too well.

Not only did I not enjoy photographing people as much as I used to, I started to feel smothered by the amount of stuff it took to maintain a studio. Our storage room was full of backdrops, chairs, props, and knick knacks.

I didn’t like having a job where I needed to continuously buy stuff.

When I started taking photos, I loved focusing on the people in photo. Their natural smiles and those little glimpses of their personalities. Unfortunately, it seemed more and more that people were wanting photos with props and perfectly posed Pinterest knock offs. It no longer felt genuine. Nothing in my life did.


Time for a change

I finally put up my white flag. I told Tom I wanted out. Not out of our marriage, but out of the house. Our marriage was on the fast track to divorce and the house, and the money were the main sources behind it.

As a child of divorce, (three divorces to be exact,) I told myself I would never let something as insignificant as money stand in the way of my marriage. So why was I?

Why would I cling to these material things if it meant losing my relationship with my husband? What was the point of hanging onto a big, beautiful home if it meant the family inside it was miserable?

Almost exactly 2 years after we signed our purchase agreement, we signed the papers to put the house on the market.


Deeper in debt

As we prepared to sell the house, we also began selling off unneeded furniture and all of my photography studio equipment. Along with a house change, it was time for a career change. Even though I wasn’t quite sure what it was.

After 3 months on the market, we took the house down for the Christmas season. I didn’t want to have to worry about catering to potential buyers during the holidays. I just wanted to be able to enjoy my kids and spend time with our family.

This worked out really well because 11 days into the new year our son wound up hospitalized with a very rare brain and spinal cord infection. He remained in a coma-like state for almost the entire month of January.

By the time the whole ordeal had ended he was needing to re-learn to walk and talk which meant physical therapy, occupational therapy, and speech therapy.

A funny thing happens when you’re a mom and one of your children is in trouble. You go into a sort of survival mode. All of my energy went into motherhood. That meant our finances went into autopilot even more than they already had been. If we needed gas, we charged it. When our oldest daughter needed clothes, we charged them.

While our son slowly recovered, our finances took an even bigger hit. Even though a Go Fund Me account was set up for us, it wasn’t nearly enough and I didn’t want to ask for more. On top of that, we had no money saved or set aside to help us through this emergency.

We quickly wound up with over $12,000 charged onto our biggest credit card. More than we had ever had on there at one time.

On top of that, the hospital bills started piling in, our house wasn’t selling, and I wasn’t bringing in an income anymore.


Getting our priorities straight

What I believe more than anything, is that the hard times in life have the ability to teach us lessons and the smartest thing we can do is learn from them.

The last 6 months had given us major perspective into what really mattered in life. Each other. More than ever we were determined to sell the house and move on with our lives in a smarter, more financially stable direction.


Moving on

Finally, in March, after about 7 months on the market, we accepted an offer on “the big house.” Now we were able to begin the search for a smaller home.

House hunting in our town was tough. It’s a booming area, and houses are on and off the market within hours. Still, we stuck to our guns. We knew we wanted a smaller house (preferably one level) in our same city so our oldest daughter wouldn’t have to switch schools.

As luck would have it, we were able to snatch up one of the very few one levels the day it went on the market. It was well within our price range, had three bedrooms, a master suite, and an open floor plan. On top of that, it backed up to an open farm field. It was perfect.

We signed over the title to our house in May and didn’t purchase our new one until the next day. That meant we had one whole day as completely house free people. All the worries that had piled on our shoulders over the previous years were finally gone.  


New house, new goals

In the old house our goal had been to fix it up, keep improving, upgrade and maintain. When we moved into our smaller house, (2,000 finished square feet smaller) we had a whole new set of plans.

We were going to make this house a home right away.

Before we moved in, we painted the entire main living space, painted the kid’s bedrooms, and added a few new light fixtures just to make it feel like it was our own.

Then we stopped buying things. We stopped needing to make improvements. Not a single new furniture item was purchased. It was time for us to practice contentment and being happy with what we had.

We needed bar stools and an entertainment center in the living room. Our walls were bare, the basement was unfinished, and we didn’t care at all.


Waiting and saving

The best thing we did was make a plan for anything we wanted and then we made sure to save for it. We saved for months before we had $200 to buy the new bar stools we wanted.

We saved for months to make it to $200! A year ago we wouldn’t have batted an eye at spending that amount. That’s what credit cards were for.

We could have easily purchased these stools right away, but instead we chose to tackle the mound of debt we had built up and put our money where it needed to go.

In this new house we were determined to be content with the things we had, instead of always seeking more.

The first 2 months of summer I spent not working, but just playing with the kids and tending to our much easier to maintain house. Because of the extra $700 per month that we were no longer paying toward our mortgage, I didn’t worry about working as much. I felt like I could breathe again.

No longer feeling obligated to support a lifestyle felt amazing. A smaller mortgage and a smaller home gave us the freedom to begin pursuing bigger things and allowed us to slow down a little.

We began taking in the simple things and reconnecting with each other.

I would still do photography on occasion and I worked a few part time jobs to help us put all of our extra money toward digging ourselves out of debt.


Getting out of debt for good

Not only did we practice being more frugal and saving our money more wisely, we also implemented Dave Ramsey’s Debt Snowball.

In the 2 and a half years we have lived in this house, we have paid off around $25,000 of our remaining debt including hospital bills, student loans, our remaining car balance, and our $12,000 credit card bill.

We have also managed to stay out of debt, pay for everything with cash, and rebuild our marriage that at one point we thought wouldn’t last.

Since beginning our debt free, minimalist journey I have documented it all and created helpful guides for others on my blog, The Fun Sized Life. More than anything I want to help people learn from our experiences so that they can create freedom for themselves the way we have.


What we learned from being house poor.

Even if we had managed our finances better when we moved into “the big house,” we wouldn’t have stayed. In a house with so much space to fill, it was very easy to feel empty and isolated. That’s not what we want for our family.

We have learned to value not only our money and our time, but each other. Rather than spending our time maintaining a house, we have been able to spend time maintaining our relationships with one another.

Instead of spending money on more furniture, appliance upgrades, and new floors, we decided to invest in our future and of course the occasional vacation.

The biggest lesson we have learned throughout this entire downsizing and debt payoff process was that this big house was not to blame for our marriage struggles and financial woes. We were. Our desire to move onward and upward was all wrong. What we really needed was the reminder to be happy and content with all the things we already had.

What size is your home? Do you think it’s too big, too small, or just right?

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Linda

    In reply to Renee’s post about getting out of debt, I am so impressed by her. She is my niece and I know now what she went through. I knew she had problems with bills when her little boy was going through that awful medical issue. We were all so worried about him and then about them being able to pay the bills. I am happy she is sharing with everyone as it will undoubtedly, I feel, help someone in the same sort of circumstances. They have come a long way and I am so proud of them!

    1. Thank you so much for always being so supportive during good times and bad!

  2. DNN

    It’s about starting that side hustle millionaire business. Affiliate marketing, blogging, and defeating your former employer by taking power from them and using it to profit you across the board. Then they wanna speak and act like things are good when they find out you became a side hustle millionaire after your former employer and some co-workers talked greasy behind your back. You have way more $ gUaP $ than them now and they wanna be friend again after you’re debt free and they’re working paycheck to paycheck!

  3. Janet

    I love this post! I follow Renee’s blog and it’s nice to see her feature on this blog! Thanks for sharing your story!

    1. Thank you so much Janet for following along and supporting our journey!

  4. Jame Sila

    Your story is very inspiring! i can relate to this lifestyle very much and appreciate that there are others who are minimalist like we are. We would much rather live a simple life and spend more quality time with family, rather than living a lavish lifestyle working 80 hours a week just to keep up wth the Jones. Thank you so much for sharing your story. We could all learn a lot from you. ❤️

    1. That is so great to hear! I’m so glad we learned our lesson. Even if it was a hard one.

  5. Very inspiring story! Thanks for sharing your story!

    1. Thank you so much. I’m so glad to be able to help anyone else avoid or get out of the same situation!

  6. Taylor Lockard

    This is so inspiring Renee! I’m currently at a decent financial place in my life, having graduated college with zero debt and currently working on building my freelance writing business, but I really need to implement a budget. I don’t spend a lot, but reading your story reminds me that I need to start a budget now before I have a family and extra bills to pay.

    1. YES!!! Absolutely! That is definitely something I wish I would have done. The sooner you can make smart financial habits the better! So glad to hear you are already doing so amazing!

  7. Wow! Thanks for being so sincere about your life story. It shows a lot of courage. As they say “small is beautiful”. I wonder how the process of downsizing went for your family. Was it relatively painless or did you/your husband/kids have to make some hard choices?

    1. It was tough for our younger kids just because we had neighbors they loved. That was hard for us as well. We had great neighbors who were always there for us. Our oldest daughter struggles with anxiety so she actually struggled for a while even though we were able to keep her in the same school and everything.

  8. Robin Ax

    Renee, where I live there is big money everywhere! It’s hard sometimes to see what others have and we don’t. My husband and I live in a one bedroom high rise and we’ve battled moving to a house, with a yard and more space but we hesitate to pull the trigger. We realize that staying just where we are is totally manageable and it allows us to save for where we want to be in the future. We are outdoors people and thankfully you do not have to spend a lot to spend time outdoors! Keeping it real has helped us save money and because we are in a “lower income” town we have a diversity of people around us that we love. When I say lower income, I mean not everyone is making six figures and living in 4000+ square feet. Life isn’t about “the stuff” it’s about the friends you make along the way. So happy to hear you guys had the strength and the vision to see what your priorities should be. Congrats!!

    1. Robin, I totally agree. I’m so glad we got out of the “keeping up with the Joneses” mindset! Sounds like you guys are living a great life!

  9. Nancy

    Thank you for sharing your story. I was brought up by parents who thought I was too stupid to handle my finances. Those words cut me deeply over the decades and I have spent time digging out from them. I hope your child is doing better, and I wish all of you good physical and fiscal health!

    1. Thank you so much Nancy! It’s tough thinking (even for a second) that we aren’t capable of living our best life…it’s just not true.

  10. lisa

    Thanks for sharing your story! As I was reading it, I hoped for a really happy ending and am so glad that everything worked out for you and the family. Although we didn’t have the exact issues that your family experienced, here is a brief story of what we went through….

    We bought a small home, despite the bank telling us we could afford more. We’re surrounded by large homes as well and when the kids were small, we invited a family over to play with our oldest child. After half an hour, they left, saying our home was “too small” and that they were never coming back! I was shocked that people could be so rude. I was sad that I didn’t have what they did but even more upset that my kid had a “friend” who didn’t appreciate my child’s companionship- only material things.

    Despite the house being small,we did have financial struggles due to job losses. On top of that,my husband had a ruptured brain aneurysm and was in the hospital for weeks. Lots of therapy helped him to regain mobility and comprehension afterwards. We had spent our savings and applied for a hardship program through my job. I went to food banks and worked a full-time and part-time job. My husband worked, following his recovery, but we still had an income below the poverty level. It took years to overcome the financial instability and once things turned around, we also made some changes.

    We still live in the home and the home has nearly doubled in value. With the years of equity built up (and creative thinking), we have been able to purchase 2 rental properties.
    I don’t feel bad about our home anymore. I feel relief. It has provided everything we needed and gave us the ability to obtain passive income. I’m grateful for what we have and have been able to overcome.

    1. Oh my goodness. It’s crazy how a story that really takes so much learning, so much struggle can be summed up so quickly. I can’t imagine what those years were like for you and I’m so glad you came out on top!

  11. Stephanie

    Great post. We went through a huge debt pay off a few years back after a car accident and the economic crash impacted our business. Health and money issues are always a mega strain on relationships. I’m so glad we went through it because I’ll never let it happen again. It was hard but we did it and now we feel free and our credit score is back at 800. You have to evaluate what brings you joy and what doesn’t and then clean house. Love our life now.

    1. Absolutely. More than anything we see the value in our relationships with one another! thank you so much for reading. I’m glad you guys are coming out on top!

  12. Misty

    We just downsized our huge house on fourty acres , to a townhouse. We are closing next week. Glad you and your family are ok. I can’t to feel the freedom 💕Thank You for sharing your story and I hope your son is doing well and your daughter as well ♥️

    1. WOW!! Although part of me definitely dreams about land…I can’t imagine how much work that must have taken!! We are doing great and good luck on your new adventure!!

  13. Jen @ This Time of Mine

    Thank you for sharing this story! It’s so inspiring to see other people get out of debt and focus on what really matters. Learning how to save and budget for every thing (like your $200 for the barstools) is a good lesson to learn. I remember the first thing we bought when we decided to change our spending habits. It was hard to wait but that purchase means so much knowing we paid for it with our OWN money! Thanks for sharing your story!

    1. It absolutely does!! We plan for all of our spending now which means I really only buy what I want the most — which seems to be a smaller and smaller list!

  14. That would make a downsize very difficult but I’m so glad to hear it has paid off for you!!

  15. K

    I’m in awe of the way you found peace once you’d moved into the smaller house. For me, financial liberation requires constant sacrifice. To be specific, not mere easy sacrifices, although there are plenty of those too, but sacrifices that induce murderous stress that may well kill me before I have the chance to enjoy the rewards of sound financial planning. I have peace in my finances but the cost (measured in frequent, prolonged bouts of stress) of sacrificing for our financial future can wear and gnaw on me as much as my earlier stress over finances. Maybe it will get easier. Maybe I need a period of adjustment, whether it’s a series of tweaks or changing my whole way of life. I have to find a balance, though, because financial irresponsibility is no longer an option, but neither are sacrifices if they prove too great to bear.

    1. You are so right. Finances can be incredibly stressful. It always seems funny to me how easy it is to share our story but really those 3 years were 3 long, hard years filled with stress. Now as we work to save our money that stress pops up again and again and I have to remind myself that eventually another 3 years will pass and if I have kept up with our financial plans, I will be in a better situation no matter what.