Friday, March 22, 2013

We're Living Debt Free!

It wasn't that we didn't have enough money coming in...we had too much going out!  I think the biggest reason was because my husband and I didn't work as a team regarding our money. 

Enter, Dave Ramsey. 

Well... Enter, my friend, Jasmine.  One day I mentioned to her that I needed help making a budget.  She immediately told me about Dave Ramsey's plan to beat debt and build wealth. 

She told me how her and her husband are debt free and can do whatever they chose and pay cash for it.  They take the vacations they want, buy school curriculum...what else is there?!

It wasn't a budget that we needed really.  My husband and I needed to work together to plan in advance where our money would go.

Here's what we did:
  • Borrowed The Total Money Makeover from the library and we both read it. Well, I read most of it and scanned the rest.  I read the information that we needed to get started.
  • We sat down together and wrote down our debts and assets.
  • Next, we created a budget for our bi-monthly pay.  We told our money where it would go instead of seeing where it went!  There are budget examples in Dave's book and online.
  • The first thing Dave says to do is to make sure you have an Emergency Fund of $1000 and decide in advance what an "emergency" is for you.  It's not buying a new outfit.  We used it within a few months to buy new breaks for our van when I was traveling with my teenage boys in Colorado.  Now we have a "Car Maintenance Fund" in case we have more emergency, or routine, car bills.
  • As Dave recommends, we pay with cash.  One thing Dave says is that we are emotionally attached to money (actual cash) much more than plastic (even debit cards).  We will spend less using cash than if we use plastic.  
  • We stopped using credit cards.
  • We followed Dave's plan to pay off the smallest debts first and finish with the biggest debt. 
  • Anything we could sell to pay off debt, we sold.  A car, jewelry and we cashed-in investments.  
  • We changed internet, phone and TV companies to reduce monthly costs. 
  • And, ohhhhh.....we just switched to GEICO car insurance and saved a ton of money...really!
Being Debt Free is freeing and a huge stress relief.  We are about to send our first of six children to college next year with the intent of not getting into debt, nor having our son get into debt, to pay for college.  Dave discusses paying for college in his book.

You might be wondering if we own our house.  Dave Ramsey says that paying for a home loan is okay.  You can find out more about that in his book.   We live in Military housing so we don't have a home least not this year!

Here are some steps you can take to find out more:
  • Borrow  The Total Money Makeover from the library and read it with your spouse.  You BOTH have to be on board or it won't work.
  • Or, you can go to one of Dave Ramsey's classes in person or on-line.  Dave Ramsey Classes
I vowed that I would blog about this when we became debt free.  My hope is that this will help someone else like it helped us.  I'd like to pass on what I am so thankful that Jasmine passed onto me.  Even if you are debt free Dave Ramsey has numerous strategies for building wealth too. 

Thanks to Dave Ramsey and Jasmine!

Is there someone you know who would benefit from learning more about this?