DAVE RAMSEY and my wonderful husband who took the time and effort to research and implement Dave’s money makeover tactics!
This is my first “financial” post since deciding to use my blog to help others become debt free and not just to read about my adorable baby! Haha! I’ve been asked numerous times about how we paid off debt, so I thought I’d finally blog about it. I’m going to organize my blog so it’s split into sections so readers won’t have to sift through personal posts to get to financial posts….but I don’t know how to do that yet.
I can say that I am fully satisfied in life right now. I feel that I have the 3 F’s of life…Faith, Family, and Finances. Most importantly, I have God, which in fact is ALL I need. I love Him for saving me and guiding me through life on Earth! Nothing I have would be possible without him. My family is amazing, and I’ve been blessed with my best friend as my husband and a healthy baby boy who has shown me LOVE like I never knew possible. I honestly did not know I could love as much as I do until I had him. And lastly, we have FINANCIAL PEACE. Luckily, my husband “provided” for me before we even got married. He read Dave Ramsey’s Financial Peace and Total Money Makeover, which has provided him with the knowledge to have our “ducks in a row” when it comes to money….and living in America, that is hard, especially in this generation.
If you are new to the blog or do not know me personally, you might be wondering why I’m writing on finances or if you should listen to this girl.
Let me give you a brief history of our financial story:
Let me start off by saying that we had no college debts (we both had scholarships and his parents paid for the difference of his school amount). We also had no credit card debts (I always used a debit card and Ryan used cc’s like they were debit). Ryan bought his car with cash, but I had $8,000 on my car when we got married. That was the first thing Ryan paid for when my dad “gave me away.” He had prepared for that as well. You might be wondering what the heck Ryan does for a living. He played minor league baseball from 99-06 and substitute taught in the off season. This is when he saved a lot of money – proving “mind over matter.” He got a full time job in 2006 once he stopped playing baseball. He’s currently in the same job (9th grade math teacher). He does officiate basketball on the side, but is looking to make that a second career if he makes Division 1 college.
So here’s the rest – Ryan proposed December 20, 2006 with a house he bought. He took a 15 year note (so important…more on that later), put $40,000 down (he saved beforehand), and started paying extra on it, before we were even married (first payment was $600 extra). I moved in August 10, 2007 when we got married. I student taught till December 2007, so we were still living on ONE income (he was doubling payments at this point). Our mortgage was about $900 and around $440 for taxes/insurance, which we pay at the end of the year (we put escrow in an account so we can earn a little interest on it). God blessed me with a teaching job mid-year in January 2008 three minutes from our house! So our income doubled, which we were not expecting so soon. Therefore, we started putting more down on the house. At first it was one more payment, then it was two more payments, and then towards the end, we were paying five times our house payment ($4500). In the meantime, Ryan had been putting his reffing money to pay for a car he really wanted to have before we had kids. He had about $21,500 in savings for the car and when we saw we had about that much left on the house, he decided to take that money out and pay the house off for GOOD, so we wouldn’t accrue anymore interest. That was in October of 2009….33 stinkin months to pay off the house!!! One of the proudest moments of our lives! 24 yrs. old and debt free!
*He did end up saving and getting the car he wanted…it was pretty easy though once we had no more mortgage.
Don’t get me wrong, it was HARD. Many tears, doubts, and anger when I didn’t think I could do it. But, we still managed to take vacations and eat out/entertain. Looking back, I’m not sure why I had those hardships since we never went without…selfish and spoiled I guess (I’m part of the “I need” generation). We simply saved for it. There were not many spur of the moment buys. We were DINKS (Double Income, No Kids) and we were going to take advantage of it. Throughout that journey, I learned so much about myself, my husband, and society. This world is jacked up financially and if I can help even just a few people make better choices and pay off debts, I will be happy! It has totally changed my life and I want others to experience that.
We made those choices because it was a MUST! We both knew I would stay home when we had kids (at least have the opportunity to), and we could not do that with ONE teacher income AND a mortgage. So now, 5 years later, I’m a full time mom, supporting my husband from home and taking care of my baby! It is very important to me to raise my child and I only get this chance once. I can always go back to work!
I’ll end this post with some wise advice from Dave Ramsey. These are his 7 baby steps to paying off debt, so you can “live like no else so you can live like no one else.”
Step 1 – Pay the minimum on everything until you get $1,000 in savings! This is your emergency fund! Emergency is not a late bill.
Step 2 – KILL debt! Pay off smallest loans first (this is what is referred to as the “debt snowball”)
|Always feel like you can’t get away from it?|
Step 3 – You will now just have your home debt, so now save the rest of your emergency fund. You should have 3-6 months of your expenses. Do not invest this money, simply put it in a bank account or money market. Most of us spend exactly what we make so this would be 3-6 months of your salary. If you make $5,000 (household) a month, you would want $15,000-$30,000 in your account.
|If you have kids, you know how important this is|
Step 4 – Save 15% of your gross household income in retirement plans. Also review all your insurance at this step to make sure you have enough to cover all types.
|I love this shirt|
Step 5 – Start a college fund, but you MUST have the first four steps completed. We did this once we had a baby (our house was already paid for). More on this step in future posts.
|You don’t want your child to feel like this out of college|
Step 6 – Pay off your house with all the extra dough you have! You will have to set aside money/make a goal or you WILL spend it! Less than 3% of people pay extra on their mortgage! Be in the minority!
|Once you pay it off, you can actually say “I own a house”|
Step 7 – Get RICH baby! Ramsey says, “so rich that we spend our time trying to give it all away” – kids, church, missions, friends. Most people are much older at this stage, making a pretty good income.
|This is how I picture our future|
We’re on Step 7 currently. Since we now only have one income, our pace of “getting rich” has slowed, but I am getting rich by spending time with our son and knowing he’s getting the best care possible…no one does it like mommy! I’m lucky that Ryan has summers off from his teaching job, so he gets to spend more time with him also.
One teacher, one full time mommy, and one baby…we live a simple life, but a FULL life. So there you have it, I’m writing because I truly care and am passionate about paying off debts. Should you listen to this girl? Well, you surely don’t have to, but I’ve walked the walk and hope you find these posts useful. I believe we have been blessed, but I also know that we worked our butts off to get here…so no hatin! If you think you’re too far in debt, Dave Ramsey was worse, so it can be done!
Psalm 37:21 – The wicked borrow and do not repay, but the righteous give generously.
Proverbs 22:7 – The rich rule over the poor, and the borrower is slave to the lender.
Romans 13:8 – Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.
I’ll be posting Money Saving Tips that we use, as well as elaborating on the above steps and how two teachers did it! Please comment or email me if you have a specific question.
Future post ideas:
Where to start?
Is Walmart really worth shopping at to save money?
Coupons – How to use them and where to get them!
Rules to live by in regards to your budget
15 year note or 30 year note?
How to get your spouse on board
What should your electricity and other bills cost?
Cars Kill Ya – “Taking on a car payment is one of the dumbest things people do to destroy their chances of building wealth!” ~DR
How to teach your kids early about finances
How to “enjoy” life when you have NO money