I wish someone would have gifted us a Dave Ramsey Financial Peace University course or just his book, “The Total Money Makeover” as a wedding gift to guide us in the right direction for our household fiances and budget. TJ and I were 1.5 years into our marriage before we realized that our finances weren’t syncing even though we both had the same future dreams.
We made all of our payments, paid extra when we could, and always on time. In my opinion we have always made semi-smart financial decisions, like when it came to buying a house. We were pre-approved for an unrealistic amount. We didn’t buy in the top tier of our approval but instead a significantly lower amount and therefore don’t have a large mortgage payment. But it hit us that we were nearing our second wedding anniversary and were still making payments on credit cards for our wedding, honeymoon, and house purchases (i.e. big screen). So we found out about Dave Ramsey and began reading his blog when we stumbled upon his Financial Peace University. We found a local class to attend and signed up. It was the best $100 investment we have ever made in our marriage.
We started attending a class in February of last year and it opened our eyes to a whole new way of living. Dave’s slogan, “Live like no else now so, you can live like no one else later,” really hit home. We both hunkered down, crunched the numbers and got a good taste of where we were spending our money and how much money we were “wasting”. When we started this adventure at the beginning of last year, we had over $10k in credit card debt. That makes me sick just writing it. After seeing the total financial picture of debt, income, and how we were spending it, we were convinced. We were doing things wrong and could make some major improvements. We started working through Dave’s baby steps, the first step being to save $1k in a mini emergency fund for minor unexpected items.
The second step was to begin tackling that debt! We started by listing all of our debt in order from lowest balance to the largest balance. Although some might disagree with this method and suggest highest interest rate first, this was what worked for us. Do what works for your family, there is no wrong way as long as your eliminating debt! We continued to make the minimum payments on all of our accounts, but we made additional payments of any and everything to the debt listed first (at the top of the list). After the first debt was paid, we applied that payment and more to the second debt. This was making our snowball bigger. The repeatable process continued to our third debt and so on.
In the midst of working our enlarging snowball to knock out debt, TJ and I work doing a month budget. You may think it isn’t necessary. But if you were to look at a previous month and analyze where the money went, it is a rude awakening. We used the budgeting tool to help us put restraints on our excess spending. It helped us see that we could apply it to more debt. We were being smarter with our money because we controlled our money. We saw huge progress in our first month with Dave’s techniques of monthly budgeting and the debt snowball. Monthly budget meetings were a must. We celebrated our successes and created a plan of attack for the next month.
I am happy to announce that we are now CREDIT CARD DEBT FREE! It feels great to now have that burden off of our shoulders! Now we don’t follow the Dave Ramsey way 100%. We do use credit cards for our monthly purchases. But it is easy to see what we are spending and where we are spending it. Plus we get cash back rewards = WINNING! So we do have a revolving balance on a (1) credit card, however we PAY IT IN FULL each month.
We have put in a lot of hard work and for a second I need to brag and celebrate us….
In 2015, we paid over $20k towards debt!
Now that does take into consideration our regular monthly payments that we made but still! We are credit card debt free. We knocked a huge chunk off of my tuition that doesn’t feel so suffocating anymore. It now feels manageable and will be gone before we know it! We are still working towards baby step #2 (eliminating debt). We believe that 2016 will be the year of huge accomplishments with the gazelle intensity we have!
Our goal for 2016 is to be debt free (except for our mortgage) and to be onto Dave’s baby step #3, a fully funded 6-12 month emergency fund.
What is your goal? Or goals?
I strongly encourage attending a Financial Peace University Course, it is life changing and can only put you in a better position than you’re in now, I promise.