I have never ventured in writing about our financial goals, but they are definitely real and have been in place since June 2008. I don’t know what made change my mindset one day, but it changed dramatically. I woke up one morning to several student loans, credit card debt, auto loans, and a mortgage and thought…. I don’t want to live like this anymore. I had always thought of myself of being financially responsible and now I laugh at the thought of that. Sure, I always paid our bills on time and always was aware of the costs of things, but I also thought credit card debt was fine….because it’s normal, right? Sure, maybe it’s normal, but that doesn’t mean that it’s the best way to live.
In hindsight, I realize that my mindset changed because Jesse was ready for a baby. I was getting there, but I knew that I did not want to struggle with finances once we had a family to support. So, I began this debt pay off plan as a means to get ready for a baby, for Hunter.
After I became determined to pay off our debt, I began listening to Dave Ramsey’s television show. If you don’t know about him, Google him and check him out, you won’t regret it! His program consists of 7 steps:
1. $1,000 in the bank as emergency savings
2. Order your debit (not including mortgage) from largest to smallest and begin attacking the smallest one with every available penny. Once it is paid off, take that money and move it to the next debt and pay it off, then keep going until your debt is paid off!
3. Fully fund your emergency savings with between three and six months worth of your household expenses.
4. Invest 15% of your income into retirement savings.
5. Save for your children’s college.
6. Pay off your mortgage early.
7. Build wealth and give.
I haven’t followed this exactly, but it has been my guide for over two years now. We built our emergency fund first, then began debt payoff, and also started contributing roughly 15% to our retirement from the beginning. As of June 2008, I hate to admit this but, we had right around $80,000 in debt (not including our mortgage) which included two new vehicles, 6 student loans, and a credit card.
We are not debt free yet, but we are getting pretty darn close, which is what inspired me to write this entry. As of today we have just about $25,000 in debt which consists of 1 student loan and my 2008 Honda Accord.
How did I do it?
Well first and foremost, we have only been able to accomplish what we have accomplished through Him. The Bible tells us that being in debt is not ideal. “When you are in debt to another, you enter into a slave/master relationship with your creditor.” Proverbs 22:7 He has worked on our behalf to help get us out of debt, but by our own free will we changed our lifestyle and began spending less than we made. We have been blessed incredibly by the Lord and want to live a life that fully honors him.
Okay, now physically how did we do it? We started with our credit card, paid it off, took that monthly payment, and started tackling our 5 small student loans one by one. And now for the last year, we have focused on paying off our 2006 Honda Ridgeline. That goal was much bigger than any of the debts we had conquered; it was hard to stay dedicated to paying if off because of the amount of money and discipline it took to pay it off. But…. I am happy to tell you that last week we kicked that truck payment to the curb!
