Now What?
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What have we been doing?
Since becoming debt free earlier this month, I needed a break from thinking about money and budgets…and blogs. But because it feels so great to be debt free and I want all of you to feel the same way, I’m back to the blog. Don’t worry, I’m back to the other things too.
So what have we done since we became debt free? We had been on the debt-free road for two years and now we needed to buy a few things that had been put off way too long! We didn’t go overboard of course and were still able to add a healthy sum to our emergency fund. Baby step 3, the emergency fund, is almost complete.
Your emergency fund should be 3-6 months worth of expenses, in an easy-to-access account. We have ours in a separate checking account we located through www.checkingfinder.com. We can easily access it, but it’s for emergencies only – not for clothes shopping, vacations, or the latest gadgets.
As Baby Step 4 outlines, we increased our retirement contributions to 15% of our paychecks. That was a shock when I got my next paycheck, but at least I know the money is going to the right place instead of being used toward debt.
So what do you want to hear about? Especially those of you still in debt, what can I write about that will help you out? You need to feel the calm and happiness that is going through our household right now!
Financial Peace. What a Relief.
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I have to tell you, I love living like no one else. I got paid last week and my husband got paid today. We get to keep the money we’ve worked so hard for. I wish all of you could know what that feels like. Amazing.
My husband and I are gearing up to lead Financial Peace University through our church. Excited? Yes! Questions? Many!
If you have led FPU or have taken FPU, give me your pointers! We want to make sure we do this right and the class makes some real differences in the lives of local families.
We are going through the church approval process now and expect to start promoting it soon. If you are in my area and think you would be interested in joining us, I’d love to hear from you at thegreen3@gmail.com. It’s not going to be a boring financial class – we’ll have blast and change lives doing so!
The Debt Free Post
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I tell you the following story not to brag or to make you feel bad, but only to inspire. We have needed inspiration many times along the way and I pray that you find the same for your family. If we can be that inspiration you need, then it’s worth putting our story out there.
As of 9:00 this morning, our family became DEBT FREE!!!!!! We have officially closed the door on Baby Step 2, where all debts except for the mortgage are paid in full.
I made a promise to my readers that I would disclose our amount of our original debt once we became debt free. The debt we were facing in the summer of 2007 was almost $80,000. The debt was spread out so it didn’t seem that bad, until we added it all up. Here was our breakdown:
My car $12,000
Husband’s truck $9,000
Mower $3,000
Saxophone $1,500
Line of Credit Loan $44,000
Misc credit/store cards $10,000
A man named Dave walked into our lives and scared the heck out of us. He told us we were a normal American family, but normal families are broke. We had a good income and plenty of savings in the bank, but when you compared our income to the amount of money we were spending each month, we were broke. The more money we made, the more we spent. Does this sound like your family?
How We Did It
Once the sense was knocked into us, we started selling stuff. Our brand new, shiny red zero-turn 2-month-old lawn mower was loaded up and hauled back to the dealer. The new saxophone we were making payments on for our son was returned to the store and we found a better quality used one on Craiglist. Those are some examples of the big things. Many, many little things were sold.
We wrote down our debts from smallest to largest. We paid them off one at a time and were finally able to start tackling the line of credit loan in February 2008. This one was going to be hard due to the large amount, so we dove into it with fierce intensity. We avoided restaurants, shopping, some entertainment, and cut back our spending tremendously. Every single extra penny went toward this debt. I was at the bank every Saturday morning having them count change I had come across that week and putting it directly toward principal. Since February 2008, we have made 121 payments toward our HELOC. Most of those were principal only payments. The smallest principal payment was a measly $4.00!
I’m going to be honest – it was difficult. There were arguments between my and my husband. There were times when we wanted to give up. Many shopping trips and nights out on the town were cancelled. The kids would yell, “I hate Dave Ramsey!” as they were told that our family doesn’t do this or that. Many relatives and friends made fun of us. We were told quite often, “You still have to have fun in life!” But who will be having fun now?
After today, we get to keep our paychecks. I can’t even imagine what that will feel like. Our lives have been changed, but most importantly the lives of our boys have been changed. They have been active participants in this project and are very aware of how loans and credit cards work (or I should say, don’t work). We will never borrow money again.
If our story inspires you and you want advice for getting on the right track, please contact us. We really do feel called to be of service to others in regards to family finances and are getting prepared to teach Financial Peace University in our community. We want other families to feel exactly the same way we do today.
More about our story can be found here.
Save Your Job
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This is a topic that I have posted about in the past, but I heard it mentioned on the news last night and I thought it would be good to revisit it.
The current economy just plain stinks. As the commercial with the talking baby says, “I want to punch the economy in the face!” Businesses are cutting staff, rearranging staff, or just plain closing. Many people are out of work and wondering how they are going to pay their bills.
What can you do to keep your job? Sometimes there is nothing you can do. But when a company looks to start cutting, they are going to look at the most valuable employees and will do whatever they can to keep them. So be valuable.
The things I’m about to list are things you should be doing anyway, if you are an excellent employee. During an economy such as this, though, you should be especially focused on these things:
Your To Do List
Offer to take on new tasks. There are always additional projects that need to be done at your workplace. Step forward and offer to take ownership of something – then do it! A boss always appreciates employees who are willing to do important tasks outside the job description…without asking for more money.
Be willing to learn new skills. The skills that got you the job 5 years ago may no longer be applicable. Those not willing to learn something new will not be kept around.
Take ownership if your job. If you are asked to do something, do it. Even if you are not asked to do something, do it. Make sure your employer can say, “(enter your name here) is the best person I could have in that position!”
When you are at work, WORK! Don’t pay your bills, search the Internet, spend too long chatting with co-workers, or take long lunches. If your employer notices that you aren’t putting in a full day, what incentive do they have to keep you around?
Rise to the next level. Don’t just be good at your job. Be awesome!
Have a positive attitude. This is one of the traits that I take very seriously and I will call a co-worker out if I notice them being negative. Complainers do not have longevity in the workplace.
End is in Sight
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Let’s see…where were we? Ah yes, personal finance.
As you know, my family is on a dramatic debt reduction plan and we were able to reach a major milestone last month! All along we’ve been saying, “If we could only get our debt below X dollar amount.” Last month we reached that amount so the end is in sight.
We are starting to get a little antsy. We’ve been on our debt reduction plan for almost 2 years. It’s been a loooong two years but now that we are reaching the end of it I can tell you that it was very much worth it. Here are some things we gave up along the way to reach our goal:
- Having a mower that had all 4 wheels that stayed on while mowing
- Our annual NASCAR trip to Kansas City in 2008
- New cars (without this plan, I’m pretty sure we both would have upgraded by now and still be making awful car payments)
- Two skiing trip to Colorado
- Netflix for one year
- Kitchen remodel
- Garage remodel
- Many Saturday shopping trips
- And much, much more.
I know what many of you are thinking. “Why would you want to live like that? I work so that I can have fun and giving up all of those things is not fun. Plus, it’s taken you two years! That’s too long for me.”
Here is my response. We did give up a lot – just ask my boys. But remember, we gave these things up temporarily. Even now, we look back and think, “It wasn’t that bad.” A year from now, we’ll forget all of the things we had to give up temporarily.
As for two years, yes – it will be almost 2 years when we write that final check. But the great thing is, we WILL be writing that final check. The argument that “it takes too long” doesn’t make any sense. Look at your own situation. Two years from now you could be debt free. Or two years from now you could have the same amount of debt that you have today if not more. Which do you choose for yourself and your family?
Favorite Scripture
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Don’t become so well-adjusted to your culture that you fit into it without even thinking.
Romans 12:2
Smile & Move
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Courtesy of Zig Ziglar
Financial Disaster
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My favorite line from Ocean’s Eleven is when Andy Garcia looks at George Clooney and said, “You know…a guy?”
Well, I know a guy. I know a guy who has his finances in order. His debts, including his house, are paid off and have been for some time. Over the past few years, he has done everything right and has gotten on track with money. He was prepared for emergencies.
Then disaster struck. Cancer decided to pick on him and he’s been battling it down with the biggest hammer he has. Even though he has no payments to make on debt, his expenses are still shocking – and not all covered by insurance. There will be thousands of dollars out of his own pocket. For just one trip to the pharmacist for medicine, the co-pay was over $600.00.
But this guy is not normal. If he wanted something, he paid cash for it. A few years ago he needed a new roof. Rather than take out a line of credit loan on his house, he saved up the money and paid cash for it. He and his wife made a decision that they were going to put their family first and make sure all financial matters were taken care of. As I said, they were not your normal American family.
Even with all of his brilliant financial planning, his expenses may exceed what he can pay.
What if you were diagnosed with cancer tomorrow and had to quit working in order to be admitted from the hospital for intensive chemotherapy treatments? How would your bills get paid? If you owe people/banks/stores money, how would they get paid? How would your kids feel when the house was foreclosed on because you couldn’t meet the mortgage payment? How would your kids feel if you had to file bankruptcy to pay your bills?
The most frustrating comment I hear all the time is something like, “We don’t make enough money to do what you guys are doing.” Their solution is to do nothing. They are going to keep spending like they always have, or keep working at low paying jobs like they always have.
While I hope you live a life of amazingly good health, chances are that someone reading this blog will have a major health crisis in the next few years. Is your family financially able to take on such a challenge?
I Am Not Participating
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I choose not to participate in the recession.
Yes, it’s a choice on whether you are participating or not. If you can’t afford your house payment, it was your choice to sign the papers on a house you could not afford. If you owe more on your car than it’s worth, choices you have made led you there. If you are filing bankruptcy, your choices have brought you to that point. If you have debt that is hindering you from building wealth, that is your fault.
Is anyone else tired of the finger pointing? Quit blaming the credit card companies, the mortgage companies, the banks, and anyone else that can be found and start practicing personal responsibility.
Choose not to participate in this recession!
Question Behind The Question
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I have something for you to do.
I’m going to borrow some lines from John Miller, author of “QBQ: Question Behind the Question”. I want you to say these following sentences out loud. Really do it, don’t just say them in your head.
Why don’t others work as hard as I do?
Why don’t I get more direction from management?
Why do they make it so difficult for me to do my job?
When is someone going to help me fix this problem?
When is someone going to train me?
Why don’t they communicate better?
Why are we always short staffed?
Why can’t our customers read the directions?
How do you feel when you say these things? Does it make you feel confident in yourself or do you feel like a victim of the situation? Is this really a productive attitude to have?
In his book, “QBQ”, Miller explains how to practice personal accountability both in your work life and your personal life. It’s time to get rid of blaming others for your problems, complaining about how bad everyone else is and procrastinating on things you know need to be done.
Now say the following sentences out loud.
What can I do to develop my skills?
How can I help the situation?
What can I do today to be productive in my work?
How can I become part of the solution?
How can I complete this task with the resources I already have?
What action can I take to “own” the situation?
What solution can I provide?
Feeling powerful yet?
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Quote of the Day
Another way to solve the traffic problems of this country is to pass a law that only paid-for cars be allowed to use the highways. Will Rogers
