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I remember that evening well. It was January 2012. Christmas had come and gone, all the decorations were put away for another year, and now it was time for the reckoning.
I was at one end of the dining room table, reviewing our bills, while our son did his homework at the other end. We had a first and second mortgage, two vehicle payments, a camper payment, and several credit cards. One of those cards was a Disney Visa. We had used it to travel to Disney the previous Spring. It was such a great deal, and we had planned to pay it off in a few months, but…
I added up all the numbers and discovered we were over $100,000 in debt! And even though my husband and I each had a 401(k), we had no emergency savings. Furthermore, our son would be heading to college in 7 years, and we hadn’t even started saving!
I can’t tell you the exact date and time I came to that realization, but I remember exactly how I felt. I couldn’t breathe, and it seemed like I had a huge weight sitting on my chest. We barely had enough money to pay the monthly bills. If an emergency occurred, we would need to take out a personal loan to cover it. If either of us lost our jobs, we would be in bad shape. It’s a scary realization that the only thing between you and poverty is one paycheck.
That’s when I remembered Dave Ramsey and his 7 Baby Steps. I had heard him speak at a leadership event and loved what he had to say. Now it was time to get down to business. I purchased his book, “The Total Money Makeover,” and read it in a couple of days. I then passed it on to my husband, who quickly devoured it. The next purchase was Dave Ramsey’s Financial Peace University. Every week, my husband and I listened to the seminars and completed the workbook.
It took us about four years, but we paid off everything, including our mortgage, which transformed our financial outlook and gave us peace of mind. Our son finished college with no student loans. We have an emergency fund and retirement savings. I’d love to say that we are currently debt-free, but we did purchase a motorhome. However, we are paying it off as quickly as possible, and we hope to be debt-free again in a few months.
How did we do it?
It took discipline and sacrifice.
We got rid of the credit cards and created a budget. Every extra dollar went towards paying off our debt. It wasn’t always easy, especially at the beginning, but finding ways to save money soon became a game and a creative challenge.
We also still had fun. We went on vacations in our camper during the summers, but we would save up the money instead of using the credit card. And, having a camper meant less dining out.
Believe me when I say there is a sense of freedom that comes from having no monthly bills, aside from your utilities and a couple of streaming services. You also become used to living a “pared-down” lifestyle, so you lose the desire for all the “toys.” The thought of going into debt for a vacation or new furniture becomes abhorrent to you.
Because of the financial freedom it has provided me, I would have to put Dave Ramsey’s “The Total Money Makeover” at the top of the “Books That Changed My Life” list. It opened my eyes to the power of discipline and I believe it can do the same for others seeking a debt-free life.