Debt just seems to be the way of life for just about everyone I know, including myself. I was raised that “people like us” have to borrow money if we ever want to have anything because we are working middle class. It would take us too long to save for what we need/want.
But when my husband and I got married, our pastor at the time and his wife gifted us with Financial Peace University by Dave Ramsey. If you aren’t familiar with this course and you have debt, I would STRONGLY recommend you look into it.
We had class 1 night a week and it taught us everything from budgeting and paying off debt to saving for kids’ college, retirement, and investing.
Too bad we didn’t listen.
Well, technically, I guess we listened because we ended up going back to these principles, but it took us nearly a decade. We had to do it our way.
Our way was borrow what we needed to buy what we wanted and deal with paying for it later.
Our way was a terrible idea.
We were making a good income, but still living paycheck to paycheck because everything was either going to bills or we were just blowing it.
Then, the van.
Oh, the van…. Anyone who knows me well in real life knows about this stupid van.
It started with a trip across the state to visit family and the van broke down. We fixed it (bad alternator) to a tune of about $800 altogether including towing, hotel stay, new parts, labor, etc.
We made it home, and a few weeks later, this same van left me stranded on the side of the road, 4 kids in tow, raining, and no cell service. I had to call 911 for help. The dispatcher was kind enough to just call my husband to come get us since it wasn’t an actual emergency. Bad alternator again.
A couple months went by and the engine went out. $2700 for a salvage engine.
Then, the transmission went out. That was the final straw. It was going to cost $5000 to repair, and the van was only worth about $7000 (if it was repaired).
Why didn’t I just trade it or sell it, you might ask.
Well, here’s where the problem comes in. Because of bad decisions (and heavy mileage) on my part, and a shady deal on the dealership’s part, the van was so upside-down that we couldn’t get rid of it.
We owed $15,000 on a van that was now worthless. I could put $5000 more in it and sell it for maybe $7000, but that wouldn’t solve my problem. And we didn’t have $5000 to put into it.
So the van was going to have to just sit. And we were going to have to just pay for it. A worthless piece of junk van. A very hard lesson learned (still learning).
This was when we decided that it was time to get back on track with Dave.
Because of debt, we were unable to take care of things that we should be able to take care of.
Because of debt, I was fearful of being left stranded on the side of the road with my babies.
Because of debt, our futures were uncertain.
All of this happened toward the end of 2018.
January 2019 we started this journey. We immediately saved our $1000 emergency fund (Baby Step 1) and we immediately started chipping away at our debt.
To date (August 4,2019), we have paid $17,014!
How are we doing it?
- Budget- we make and stick to (for the most part) a budget. We had to actually track our spending, and that was an eye-opener! When we wrote in on paper, we realized that we had some left over, but we didn’t know where it was going. We just spent it until it was gone and then complained because we didn’t have any money. So we followed Dave Ramsey’s advice, made a 0 based budget where your budget equals $0 when you get done. Every dollar is assigned. If it’s “extra”, it goes to the debt snowball and pays off the debt. (If you have no idea what the Debt Snowball is, check out https://www.daveramsey.com/dave-ramsey-7-baby-steps
- We throw everything extra into our Snowball. Everything. At first we didn’t have much extra, but as time went on, we paid off several small debts that allowed our Snowball to get bigger.
- We took extra jobs- I actually clean the office building where I work (I’m a nurse), and he works as a heavy equipment operator on the side, after his regular job. Between the two of us, we make +/- $1000 extra per month with these side jobs. That makes our shovel so much bigger. We could do more, but we have 4 kids that need us too!
- We pray! Lord knows we need some help in this process. When you are used to spending, it’s hard to cut back so much. We need help to keep us focused.
- We communicate. We have to. Money issues are the #1 reason for divorce, and tackling this together has done nothing but make us stronger that we were before. We will not be included in that statistic.
While we have made great strides, and I am so proud of how far we’ve come in such as short time, we still have a long way to go. But I know that one day soon, all of our hard work will pay off ,and everything we are now sacrificing will be completely worth it.
If you are struggling with your own debt, or if you are tired of living paycheck to paycheck, I encourage you to take a good look at yourself and your future. Make some changes. Even small changes add up, but big changes add up much quicker.
What do you see for yourself and your family? What would your life look like if you had completely 0 debt? I’m guessing much different that it looks now.
Take the steps. Do some research and start your own journey. The Total Money Makeover is an excellent place to start.
And if you would like to follow me along on our journey to financial freedom, just subscribe to this blog and join my email list! I would love to have you tag along, and maybe we can gain financial independence together!
From one Overwhelmed Mama to another.