A little over a year ago we had some friends over after church. We talked about the usual stuff, kids, church, homeschool, and then the conversation turned to finances. They were getting rid of all their debt an idea they got from reading Dave Ramsey. It sounded a little radical for us, I mean no credit cards, no car payments, no mortgage… that seemed crazy.
We listened politely as they told us what they were doing to reduce their debt and increase their income. We really felt we were doing financially okay. I mean the only debt we had was a car payment and some student loans. We used credit cards, but we always paid them off every month, plus we earned cash back. Some years it was a few hundred dollars. Of course we didn’t have any money saved, and didn’t really own anything. Our net worth was probably $1000.
We moved to another state and last summer, while walking with a neighbor, she mentioned something about this guy Dave Ramsey and how they were trying to use his plan to get ahead. After hearing her talk about him I figured I needed to find out more about this guy. I checked out The Total Money Makeover
Over the next month, we devised a plan to pay off the student loans (the car had been paid off earlier in the year) and start building our emergency fund. We both took our credit cards out of our wallets and stopped using them completely. We used cash for groceries, entertainment, household purchases, and our debit card for gas and any online purchases.
In four months we managed to pay off almost $10,000 in student loans and shouted “We’re Debt FREE!” on the Dave Ramsey Show.
It was exciting. This month we completed baby step three by fully funding our emergency fund. In about six months we have completely turned our finances around! It is an amazing feeling to write our budget and not owe money for things purchased in our past.
Over the past few months we have learned to hate debt, and love the freedom that comes with not owing money to anyone. Freedom from debt has changed our lives.
