Thursday, April 15, 2010

A Big Decision

Either we have gone totally crazy, or we’ve finally come to our senses. Evan and I have decided to stop accepting the lies that having debt is “normal” or that “everyone has debt.” We’re sick of it. We’re fed up with feeling like we can never get ahead. We’ve had enough of feeling broke all the time, but not doing anything about it. Well, we’re doing something about it alright.

As of May 1st, Evan and I will be starting our Total Money Makeover. I read Dave Ramsey’s book of the same name in just over a day and I closed the cover feeling energized and encouraged that we could really do this. It’s going to take a lot of sacrifice, a lot of changes, and actually learning how to do a budget for the first time in our married lives, but I am confident that we can follow Ramsey’s baby steps to becoming debt free! I vow to NEVER go into debt again….EVER.

I’ve heard it said many times that when you set a goal, you need to put it out there and tell as many people as you can so you can be held accountable and have a cheer squad for when things get tough. Here you go, guys. We need you to be our cheerleaders! Since I’m officially addicted to blogging, you get to have a front row seat to our Money Makeover. I hope you can share your insight, offer encouragement, scold us when we totally blow it (which we will at least once I am sure!), and celebrate our victories with us. Maybe, just maybe…..we can get some of you to tag along with us on this journey.

Here’s the basic outline of Dave Ramsey’s baby steps, the roadmap to the journey we are about to embark on toward becoming debt free:

1. Save $1000 Fast! – This $1000 becomes your emergency fund so that as unexpected things come up during the process, you don’t have to revert back to using debt as a crutch.

2. The Debt Snowball – Pay off that debt now! We’ll be attacking everything but our mortgage with “gazelle intensity,” throwing as much money as we can at our debt in a systematic way. One at a time, those balances are going to hit zero until all $41,740.37 of our non-mortgage debt is GONE. Yup, I just put that number out there for all of you to see. It’s our Mt. Everest to climb, but we are about to obliterate it.

3. Finish the Emergency Fund – Once our debt is gone, we’ll be building up our emergency fund to cover 6 months of expenses. No more borrowing when Murphy’s Law kicks in. We’ll have CASH to deal with our emergencies.

4. Maximize Retirement Investing – With no debt and an emergency fund in place, we will then be able to start planning ahead for retirement. I always figured I would be the 80 year old women who was still waiting tables, but that is so not going to happen.

5. College Funding – Isaiah and Micah certainly won’t be getting a free ride from Mama and Papa Dollar, but we will be able to have money put away for their education. Will they still have to work to put themselves through school and survive on Ramen and Kool-Aid like we did? You better believe it. The way I figure it, it’s better if they’re too broke to have the "college experience!"

6. Pay off the Home Mortgage – Time to pay off that house! Take away all the money we’ve been throwing away on credit card payments and that mortgage payment suddenly looks much more effective. I am so pumped to reach this step down the line!

7. Build Wealth and Give! – I have always dreamed of the day when we would have the money to give back to others, but why I never put a plan in place to make it happen, I will never know. No more. If we can stick to Ramsey’s plan like white on rice, we will be in a position where our money is working harder than we are and we can give generously. Nothing excites me more than that prospect.

Murphy's Law says that if anything can go wrong, it will.  The very next day after I finished reading the book and decided we needed to do this, we discovered one of our cars needed an $800 repair!  The old me would have immediately reached for a credit card.  Not this time!  After the repair is handled, it's back to Baby Step #1 for us.  I'm determined to make this work!

I want to send out a huge thank you to Dustin at Engaged Marriage for giving me the kick in the pants I needed to look into Dave Ramsey's plan.  His post on the Baby Steps really got me interested, but it was his personal encouragement that made me really decide to take the plunge.  I owe you huge Dustin!!

I'm excited to share this journey on the blog and with all of you.  I hope you will enjoy rejoicing with us when we cut up that first credit card!  So looking forward to taking that photo....

What do you do to stay on a budget?  Do you have any tried and true methods of mananging your money and staying on track? 

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