Before you read this I have to admit that some of what I have written is very embarrasing to John and I but we don't regret any decisions we made in the past because we have learned from our mistakes and if we wouldn't have made any changes to our behavior we would still be making them!
We’ve paid off $42,500 in 3 years!!!!
Here is how our Journey started:
We were one of those ignorant people who thought buying a house with no money down was a good plan. So 4 ½ years ago we bought our first house at ages 20 & 21 with no money down and thought we were moving up in the world. John and I had already been married 3 years at that point and we had a 2 ½ year old daughter, we thought we had it all figured out. I would look at the numbers before we closed on the house and figured if we had perfect months every month that we could make it plus John was up for a promotion so we thought he would get a raise after we closed. Unfortunately he didn’t get the promotion so all of that went out the window. He started searching for a new job which he did end up getting but it was 7 months after we had moved in and of course since we didn’t have perfect months we weren’t making it. We brought home $2180 a month and had a $745 a month house payment we were barely making it. So we started defaulting on our credit cards and car payment and truck payment even (yes I know) our house payment and any other bill that would come in b/c we just didn’t have the money to pay them. So we, of course, were sent to collections and we were starting to get all the nasty letters and phone calls and we were even sued.
With John starting his new job he was making more money but for some reason we still weren’t making it. He went from bringing home $200 a week to anywhere from $500-$800 a week. Where was all of our money going?? Well it turns out we were nickel and diming our selves to death. We had enough! In February of 2007 we got our tax return and instead of blowing it like we usually did we used it to pay off our first debt which was Kay Jewelers. It felt good to have one debt gone. So we kept going, little by little we were paying off our debts, the problem was though is we still didn’t have a plan. We knew we wanted to pay off our debts and not have to worry about finding another collection notice in the mail or worry about answering our phone but we just didn’t have the steps to do it.
In June of 2007 we were blessed with our 2nd child and I was going to stay home from work because we couldn’t afford daycare. I put in my notice at work and the VP came up to me and asked if there was anything that they could do to get me stay. I was completely honest with her and told her I would need a raise. We couldn’t make it with me working and only making $8.25 an hour so to my great shock she offered me $10.50 an hour if I would stay on with the chance of a promotion in a couple of months. In November 2007 the chance for a promotion was there and I applied and got it. Along with the position I also got another raise. So I was now making $11.50 an hour and we were doing great. We were paying off our debt slowly but surely and everything started looking up.
In January of 2008 the transmission in our 1994 Ford Explorer went out and instead of replacing it we went out and financed a 2006 Ford 500 and because our credit was still so bad we ended up with a 23% interest rate and we thought that there was nothing else we could do “You’ll always have a car payment”. Then in April I was helping a customer open up an Insured Money Market Savings account for their Baby Emergency Fund of $1000.00 and they kept talking about this guy named Dave Ramsey and his Financial Peace University class that was so awesome and how this account was going to be for emergencies only and they weren’t going to touch it. The whole time I kept thinking to myself “Yeah right! Everybody says they are going to save money and not touch it but they’ll never follow through with it.” Well this couple kept talking and told me to listen to this Dave guy on the radio Monday thru Friday. So I filed that information in the back of my mind and in June I remembered what that couple had said and looked him up. I started listening to his show and at first thought it was all a big scam. He was talking about these baby steps and I thought I can barely get $10 in my savings account how am I supposed to be able to put $1000 in a savings account.
I tried talking to John about it but he just kept saying the only reason this guy is so rich is because people fall for his scam and buy his stuff. So he was totally not onboard with this. Well I kept listening to Dave Ramsey on the radio and happened to catch a Debt Free Friday show and the emotion these callers felt when they were telling their story was palpable and it would bring tears to my eyes just hearing the sense of relief, accomplishment and freedom in their voices. I decided at that point that we were going to do this, we had to do this for our family and ourselves! So I called John and told him that I was going to go out and buy Dave Ramsey’s books and envelope system and that I think we should really give this a try.
He said go ahead but this is all on you, I want nothing to do with it. So with out his help I started making a budget and saving money and trying to follow Dave Ramsey’s rules without John’s help. I tell you what that is not an easy thing to do! So finally in December on 08 John made a comment on our way home from the grocery store about how he liked not getting late notices in the mail and collection calls and having money in savings to pay for things like Christmas and Emergencies. I just smiled to myself and thought YES!! I’ve got you now!!!
So in January I had him sit down with me and we did a budget and we started working the plan together! That is the key to this whole thing! You have to do it together! I signed us up for Financial Peace University in August of 09 just so we could get the whole benefit of his teachings and we learned so much!!
So we started this long journey in February 2007 making $40k with $42,500 in debt to paying off our last debt (which was the car at 23% 3 years early) 3 years and 2 months later in April 2010 making $70k!!
We are expecting our 3rd child in July and I will be quitting my job to be a SAHM. Because of Dave Ramsey and his teachings we are finally getting some financial peace!
