Since my last post made more than one person want to throw up in thier hat (talkin’ to you, Matty), thought I’d enlighten you with something new. Not sure why we’ve never blogged about this part of our lives before, ’cause it pretty much has dominated every decision we’ve made in the past 13+ months. I’m talking about a radio program called The Dave Ramsey Show. (We catch it on KSOO 1140 in Sioux Falls.)
Though we’ve never met Dave, I feel like he’s a close personal friend. We both listen to his show whenever possible, I download and listen to his podcast every single day, and we’ve read two of his books (The Total Money Makeover and Financial Peace).
I know: kind of sounds like stalking, or hero worship or something; but he has really become a valuable financial and spiritual advisor for us. Dave talks mostly about money, but also about life and faith and other stuff. He is truly a Godsend to us. We started his “Total Money Makeover” plan in September 2005. We’re on baby step 2: the “Debt Snowball” (step one is $1000 cash in the bank as an emergency fund). We tell every one of our dollars what to do, on paper, before each month starts (the dreaded budget!). We don’t spend a dime without planning for it (and talking about it together) first. We’ve cut up our credit cards and promised each other to never borrow money again! (That’s right–never.) We’ve transformed our lives. Really. (You can learn about Dave’s baby steps if you want to.)
So, the point of all this is to let you in on our little celebration. We figured out this morning that, using the debt snowball approach, we’ve paid off (are you ready?) $40,995.92 in debt since September of last year! A year ago, I would have been embarassed as hell to tell you that we had that much debt. Today, it still makes me uncomfortable to tell the world, but we’ve decided to do it so you know you can too. We figure we probably have done more stupid things with money than most people we know. You might be surprised to hear this (or maybe you’ve always known I’m a knucklhead).
The truth is, we’re roughly half way through our debt snowball now. Between student loans, car loans, credit cards and other stupid stuff, we found ourselves up to our eyeballs in a mess. We’ve paid lots of stupid tax (that’d be money we’ve spent/lost because we made some stupid decision). We bought a brand new van three years ago, and lost a bunch of money as soon as we drove it off the lot (if we had only listened to our Dads about cars! Neither of them has ever bought a new one). We borrowed way more than we needed all through college, cause it seemed like “free money.” We charged our whole wedding (except the parts our parents paid for) on a Visa card, cause we’d be getting jobs soon and would be able to pay it off easily. We bought furniture we couldn’t pay for, but those payments would be so easy. We built a house when we shouldn’t have, and bought lots of “stuff” to put in it. Before we knew it, the total was awful. So that brought us to September, 2005.
Paying off 40 grand in 13 months definitley was no fun. It sucked. In the first six months, we fought about it a lot and wanted to quit. Every day. Now we’re in the groove. We’ve sacrificed a lot, and will keep doing it until all that stupidity is paid for. But we’re changing our lives. We’re being really weird, and we’re proud of that. Normal is broke and spending more than you make. We never want to be normal again. Our goal is to be debt free, except our house, in two years or less. The house should be paid for in about seven years–or less. Then the fun begins.
I know what you’re thinking. We are blessed to make a good living. But we don’t make as much as you think. Jaimie works part time and I work for a non-profit. We just changed our habits. We finally realized that our income, no matter how big or small, is the most powerful tool we’ve got to build wealth. We know where our money will go before we ever spend it. We don’t waste any.We’ve had garage sales and sold all kinds of stuff on ebay. I worked two jobs (seemingly around the clock) for four months. We’ve (temporarily) stopped investing and put every penny into the debt snowball (once we pay it all off, we’ll have plenty of money to catch back up and invest like we really mean it). We’re weird and loving it. We get made fun of a lot by family and friends. That’s just fine by us. I think every single day about when we’ll call into Dave’s show and yell, at the top of our lungs, “WE’RE DEBT FREEEEEEEE!!!”
We tell all this because we’re changing our lives and our kids’ and grandkids’ lives. We hope you think about doing it too. My Mom has our Total Money Makeover book right now, but you can borrow it as soon as she’s done. Or, you can ask us what we know any time. Maybe we can share advice and some “stupid tax” stories with each other.
We started all this because we really want Jaimie to be able to be a full time Mommy. Without all these dumb payments, we could do that. We really want to be able to give a lot of money away someday too. Now, I think that will be a reality instead of a dream. It doesn’t matter if you make $20,000 or $200,000. If all your money is going right back out the door in payments, you’ll never build wealth. Money doesn’t buy happiness, but taking care of the money you earn does allow you to do things and help people you can’t otherwise do. Take that car payment you think you’ll just always have (we’ve had lots of people tell us that). If you were to save up and pay cash for a car, and invest 200 bucks a month into a decent mutual fund from age 20 to age 60, guess what you’d have…How about 2.4 million dollars? Hope you like that car!
Comments are always open!