One couple wants to stop living paycheck to paycheck. A big obstacle: Nearly $40,000 in credit card debt

By Jeanne Sahadi, CNN

(CNN) — Milwaukee-based couple Mariza and Geffrey Gordon have been living paycheck to paycheck, saddled with a number of debts. They want to break out of that cycle.

They were a dual-income couple when they signed up for CNN’s Savings Challenge, but soon after Mariza learned she was getting laid off and would only get two months’ severance.

In her first Savings Challenge consultation with the couple, budgeting expert and financial educator Tiffany Aliche came away with two key impressions.

“They were so supportive of each other,” Tiffany said. And the best thing they’re doing, she added, is “seeking help. A lot of people just stay stuck.”

Having reviewed a summary of their financial situation, she realized she wouldn’t be able to address all their money issues given the limited timeframe for the challenge.

So she decided to focus on what she called “the pin sticking them the most.”

“The biggest thing weighing them down is their (credit card) debt,” Tiffany said.

Specifically, the couple had nearly $40,000 in credit card debt, most of which they racked up to pay for their wedding last year, Mariza said. And they have been paying about $1,400 a month just to meet their minimum monthly payment requirements.

Before diving into the specifics of their money situation, Tiffany asked the couple to forget about their money stresses for a moment and think seriously about what they wanted their lives to look like in the next decade. It’s an exercise she calls “dreamscaping.”

“I wanted to give them something to work (toward),” Tiffany said, noting that too often people fixate on becoming debt free without then doing the work to build net worth. After all, she noted, you can be debt free but still broke.

Tiffany’s recommendation: “Let’s get to a point where you don’t feel like your debt is drowning you. But the true goal is to grow wealth.”

Besides dreamscaping and coming up with a budget spreadsheet, she suggested the couple do two other things: 1) Check with the National Foundation for Credit Counseling to see what kind of debt repayment plan they might get; and 2) See if they qualify for a personal loan with a lower rate than their credit cards; or a balance transfer card.

Finding their ‘why’ for the work ahead

A few days after their first call with Tiffany, the couple told CNN they really appreciated the dreamscaping exercise. “We were so caught up in the now and stressed about the present we hadn’t put thought into what we want for the future,” Mariza said.

They have a lot on their dreamscape list: own their home plus an investment property, take occasional vacations, start their own businesses and have individual IRAs on top of their workplace retirement savings plans.

They then started gathering information about what debt repayment might look like for them.

The NFCC, they said, told them they could get a five-year plan requiring them to make $900 payments every month – that’s $500 less than they‘ve been paying in minimums. The only catch: They would not be allowed to use any of their revolving credit during those five years.

“Given our situation, we don’t feel that option is the best fit for us right now, as we want to maintain some flexibility in case we need access to credit,” they told CNN in an email.

When they checked with a credit union, they learned that until they improved their credit scores, they won’t qualify for a personal loan at a favorable interest rate or a balance transfer card, which could give them up to 21 months to pay off what they owe interest free.

Now, Mariza said, “We want to get our score high enough to get a balance transfer card.”

What’s next: We’ll catch up again with Mariza and Geffrey in a few weeks. But next week, you’ll meet another participant, Jeff Kizer.

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