The Debt Snowball worked! If you're familiar with Dave Ramsey and his Total Money Makeover program you know what I'm talking about. He has 7 baby steps that will help anyone get out of debt and live with financial peace. Getting out of debt is only step 2 in his program, but its definitely worth celebrating!
I don't know the statistic for individual debt in America, but you know it's high! I would encourage all of you to checkout his website and his books at http://www.daveramsey.com/ and for specifics on the baby steps I've already mentioned go to: www.daveramsey.com/new/baby-steps/
Here's our story:
Before Chris and I met, we had each accumulated debt but were trying to be wise and work it off as quickly as we could. This meant usually paying more than the minimum payments on our loans. Thankfully neither of us had credit card debt.
When we started dating, Chris had some choices to make on how he would handle his finances and, thankfully, he was very strategic and prudent in his planning. Not only did he begin planning our dates in his monthly budget and stay on top of his monthly loan payments, he also started saving up for a ring! I also started watching my spending more carefully and started a savings account to set aside money for our wedding. If I remember correctly, we didn't discuss this together at all. (We just knew it was meant to be!)
About a month after Chris proposed, we were blessed by my employer with two discounted tickets to Dave Ramsey's Live event in Colorado Springs. This was an all-day seminar that left me totally excited to get out of debt with my husband-to-be. We had both been exposed to Dave Ramsey before through relatives and friends and Chris was already following what he had learned much more diligently than I was. But for me, this was a huge turning point and motivator!
Our families helped out a lot with our wedding. Without them, we could not have fed you or danced with you. (Thank you moms and dads!) And because of their generosity, I could actually pay off my college loan a month before we got married! Hooray! I was totally not prepared for the excitement that would bring. Paying off debt is actually FUN! When I got close enough to write one last big check I couldn't wait!
It was actually a lot harder to combine our finances than I had originally anticipated, and the final transition wouldn't happen for a few months after our wedding. Nevertheless, we kept chipping away at our debt one payment at a time. Then in September, I was notified that I was being laid-off and shortly after that we moved to California. During this rough time we still were able to make minimum payments on our debt. (Thank you Lord!) And in the midst of being unemployed and staying with gracious couples we were able to pay off my car! Yahoo!! Another exhilarating experience that brought me to my knees in praise of the Lord's faithful provision.
Then, all we had left is Chris's education loan. In all honesty, this one looked impossible to take care of quickly, especially after we saw how much it costs to live in San Francisco! But we were amazingly able to make higher payments on it after we moved into the city and both found work. And now after a year and a half of marriage, we're debt free!
The trick: Debt-snow ball. Seriously. It's a pretty simple concept too. Basically, you write down all your debt (the source and the amount left to pay). Then you put them in order of the least amount to the greatest. Pay off the first one on the list while making minimum payments to the others. Once that first one is payed off, apply the amount you had been paying on that one each month to the next one on the list. Then when that second one is payed off, you apply the amount you were paying on that one (along with the amount you were paying on the first) to the third one on the list and so forth. Like a snow ball it grows and gains speed as you go down the list. For a more info go to www.daveramsey.com/new/baby-step-2/
What does being out of debt mean? Well, for starters, we don't owe anybody anything; we're not slaves to the lender anymore! Secondly, we can begin saving for our future and invest for retirement. We've been set free from the past and given a hope for the future. Its absolutely exhilarating!
|Current mile marker: 95|