After 14 years of marriage, we discovered how we were spending (and not saving) was going to ruin us! In October 2018, I was let go from my job. I was the primary breadwinner, but my husband was getting his military retirement, which would keep us afloat…for a very short amount of time. While I was looking for a new job, we were lucky to have a family member help us. I was able to start a new job in November, but it was time to figure out what we needed to do so we wouldn’t be this stressed again!
Enter Dave Ramsey!
I searched all over the internet and found this guy named Dave Ramsey. He teaches people how to get out of debt and live the best life you can. I ordered his book Total Money Makeover and read it in a single day! It changed my perspective on money, no lie! A lot of what he talks about in his book is common sense, but they are things most people don’t put into practice. Dom wasn’t 100% on board with Dave’s 7-step program (aka The Baby Steps) until he read the book. He couldn’t believe how easy the steps were and we sat down and made a plan to get out of debt!
First, I want to say that I am very fortunate that I have been successful in my career and able to find amazing opportunities that have expanded since I got out of the military in 2007. Without the military experience and the educational benefits, I don’t think I would be where I am today!
In January 2019, we sat down and added up ALL our debts, minus the house. I wanted to vomit with the total amount we had…$124,000. I mean, seriously?! Why did we do this to ourselves. Our annual income at that point was over six-figures, which included my new salary and both of our VA disability/retirement checks. We had to figure out what our monthly bills were, look at what was necessary and what we didn’t need anymore (video streaming, random subscriptions, etc), what our minimum payments were, and list all our debts from smallest amount to largest (don’t even think about the interest rates!). The first “Baby Step” is to get current on everything (if you are behind) and save $1,000 in your savings. I couldn’t tell you when the last time we had $1,000 in our savings account was. It took us a few months to get that together, but man, having an Emergency Fund really did ease some of our tension.
After the Emergency Fund was created, we started looking at our budget. We had to figure out how much we spent and would agree to spend on daily living and bills then see how much was left over. Anything left over would go to the smallest bill on our list. That just so happened to be my card for Maurices. That was paid off within a few months. Then you use any left over money for the next debt.
This method is call the Debt Snowball. Here is a basic rundown of how it works and how it can keep you motivated:
Debt 1 – Maurices $500; minimum $50/mo
Debt 2 – Cell Phones $1000; minimum $50/mo
Debt 3 – Credit Card $4000; minimum $100/mo
Let’s say you only have an extra $300 a month to put towards your debt, and we are starting in January. This will make $500 a month towards your debt. Look at the math and see how maintaining all $500 towards your debt will have it paid off in November.
This doesn’t take into account any extra money you can throw at it if you pick up a second job, birthday money, bonus from work, etc. Your main mission in life right now is to be debt free! This is possible for everyone, but it takes changing your mindset and habits.
So…how are we doing at our debt free journey??
Our lifestyle and choices aren’t 100% on the same path of others that follow Dave Ramsey. We haven’t cut out the things we like or love to do, but we are saving money in other areas, such as eating out, going to the movies, how much we order from Amazon, etc. But since we started our journey, we have paid off over $50,000!!! Could we have done better? Yes, but that is a choice we have made and the journey that makes us happy.
I am going to share more of our journey and ways I can help you and your family be debt free. If you have any questions about how to get started or what some help with your budget and becoming debt free, reach out and I would LOVE to help! This is something that not only reduced our stress, but has helped our marriage by being able to communicate and agree on a better path for our family and the future!
Until next time!!