Anytime I tell someone I’m a homeowner (a TRUE homeowner) they ask me this question. There are many answers to this and I’ll post many more entries that deal with paying off debt and money in general. The top 2 answers I would say to this are: BUDGET and YOU HAVE TO WANT TO! It took us 33 months to pay it off. I often get embarrassed to share this, but then I think why would I not share one of the best things that has happened for our marriage. I know many struggle with debt so here goes it! Just like losing weight – someone can try to tell you how to workout and what to eat, but if you don’t really want it, it’s not going to happen. And when I say budget, I don’t mean tell yourself since you make $3000 a month, you’ll only spend $2500 of it. I mean write/type out exactly how much you will spend for each category of your life (mortgage, day care, entertainment, etc…). Also having a reason or goal in mind for paying it off helps. Our main goal was for me to stay home when we have kids.
Of course we owe all our success and blessings to the Lord, but the earthly person who helped us achieve this goal was Dave Ramsey. We follow his teachings closely. Ryan and I were lucky to learn young and early in our marriage, but it is not impossible if you are deep into your marriage with 2+ kids and thousands of dollars in debt. Dave Ramsey went into bankruptcy twice before he got out of debt, and he had all the things listed above. He is a Christian who speaks truth about money and gives practical advice of how to get out of debt. His motto: “IF YOU WILL LIVE LIKE NO ONE ELSE, LATER YOU CAN LIVE LIKE NO ONE ELSE.” If you will make the sacrifices now that most people are not willing to make then later on you will live like those people will never be able to live. Two verses that I find comforting when going through this process are:
1. Proverbs 21:17 says, “He who loves pleasure will be a poor man. He who loves wine and oil will not be rich.”
2. Proverbs 22:7 says, “The rich rule over the poor, and the borrower is servant to the lender.”
The first verse means to me that if you are constantly buying things that are “above your means” you will not be rich. As a Christian, I believe that word “rich” to be both physical and spiritual. Often times in life it may not seem fair, but what always reassures me is that I am rich in the Lord.
The second verse means DO NOT BORROW MONEY! The only debt Dave Ramsey allows is a mortgage…and under these conditions: Needs to be less than 25% of your take home pay, be a 15 year note, and you can maintain the payments. Of course it is preferable you pay the house in cash, but understandable if you have to borrow…because it’s a smart investment. Oh and don’t say you’ll pay extra payments so you get the 30 year note for the lesser monthly payments…”Over 97% of people don’t systematically pay extra on their mortgage.” This leads me to my last point:
GET RID OF YOUR CAR PAYMENT!!! This is what Dave says in his book, The Total Money Makeover, about cars:
“If you put $378 per month in a cookie jar for just ten months, you have almost $4,000 for a cash car. I am not suggesting you drive a $4,000 car your whole life, but that is how you start without debt. Then you can save the same amount again and trade up to an $8,000 car ten months later and up to a $12,000 car ten months after that. In just thrity months, or 2.5 years you can drive a paid for $12,000 car, never having made a payment, and never have to make payments again. Taking on car payments because everyone else does it does not make it smart. Will your broke relatives and friends make fun of your junk car while you do this? Sure they will, but that is a very good sign you are on the right track.”
And of course never get a lease! But that’s another post all by itself!!!
Luckily I am not a car person, so having an “average” car (I drive 2005 Toyota Corolla) makes me perfectly happy. My desires are elsewhere. My husband on the other hand loves nice cars. He sacrificed his old Corvette for a “more useful” car a couple years before we got married and decided if he wanted to buy another Vette (keeping his former car for reffing purposes), he would save every penny for it (NO PAYMENTS). After we paid the house off, he saved all his reffing money, plus a little extra from our monthly income if it was there to “blow” (remember we didn’t have a mortgage at this point)! It took him 14 months to save, but he finally got his “baby.” Even then he bought a used, but brand new ’08 coupe with 3900 miles.
Do you feel overwhelmed? DON’T! There are 7 steps Ramsey preaches to get out of debt! I’ll post another entry on the 7 steps. We’re on Step 7: Give it (money) away! I can’t express the freedom I feel. Was it hard? Very. There were days of struggles and I honestly did not think I could do it at times, but the Lord blesses those who wait!
Thank you Lord for blessing us and giving us a chance to be a blessing. I highly recommend his 2 books:
The Total Money Makeover