October 03, 2012

A Journey from broke to wealthy ( or somewhere slightly between)

 I used to come home from work, and as I approached the back door - I would hear a southern twang  over the radio waves, and I would be filled with frustration.  Why would Mr. listen to such nonsense?  Who wants to hear about other people's problems?  Not me!  I had enough to worry about, paying our bills, that I didn't want to hear about some random guy in Arkansas and his financial troubles. I knew troubles. I didn't need to suffer through listening to it. As I would enter the house everyday, I would wonder, really - what does this Dave Ramsey from Tennessee know about my debt?
Well....fast forward three years later. Clearly, Dave knew his stuff.  I, unwillingly at first, agreed to be part of "Financial Peace University" with my husband, (really with the hope that we didn't have
 to listen to the crappy podcasts anymore). We took a class for a year, and only started implementing what we learned last year. I can't tell you why it took us that long, I blame it on pure stubbornness. We were used to a certain way, and even if it wasn't working, it was our way.  But after taking the course, we decided to actually give it a try.  In that year, we paid off almost $70,000 in debt. It wasn't this magical class and POOF - no debt. It honestly took A LOT of extra side jobs, tutoring sessions, and a few cutbacks - but we did it. We did it with a little, okay - A LOT of structure and help from Dave Ramsey course. We are still left with about 6,000 in debt - but that number seems like peanuts compared to what it was.   

How did we get there? What made us even attend this class?

PART 1: Facing the Financial Mess We Created

I don't think we understood HOW badly we were in debt. (Nothing like pointing out how far you've come!)

I have to say it was more my mindset than Mr's of wanting things you couldn't afford. He didn't have a  credit card (and still doesn't), and when I wanted something I didn't have the cash for - I would charge it.  Simple as that. Nothing seemed out of my reach! Good 'ole Visa would come to my rescue. What happens when you start charging vacations? Furniture? wedding? OH BOY!  I didn't realize, basically because I never added it up before the financial problems we created.  Four years ago, when we were about to get married, we had to really take a hard look at our finances. How can you save when your bills were more than you were making?  It was time to face the facts.  We needed help.  At the time, we had satellite radio (an expense we no longer have), and a good fellow, Dave Ramsey had a show where people screamed about how they were out of debt. Literally, they would call in and shout "Debt Free!" What a celebration! Could we eventually make that call and shout those words? It felt like the light at the end of the tunnel was barely on.

Looking back, things could have been so much worse. Somehow each month, we always paid our bills.  We never missed a payment.  We were able to continue to  live our lives and enjoy ourselves.  But we were slave to our jobs. We HAD to make a certain amount of money in order to make payments each month.  There was no true freedom.

What we learned from our year of taking the course (and believe me we learned a lot) was to BUDGET BUDGET BUDGET.  You want something? Save! My trusty Fisher Price piggy had purpose again. 
The most important and hardest part of this was to follow your budget. Track your money. Follow where it goes. 

I created this budget that I use - Feel free to download and use as it works for you!
We still have a long way to go, because following Dave Ramsey's Steps to Financial Peace - the battle isn't over.  After creating a budget, and sticking to it - there are many other steps that will secure your freedom in the finance department!  Another post shall tackle that :)


1 hearts about my post:

Arlene :) said...

I yearn to be debt free one day. Thanks for sharing your journey, gives me hope :)