My husband and I have been married over 11 years, and during that time we've been everything from a 2 income pre-kids couple to a one income and 3 kids couple. Although we've never been crazy irresponsible with our money, we had never really been super responsible with it, either. Since we had a 401K, 529's for our kids, and money to pay our bills each month, we thought we were doing well. Throw in a financial planner and we felt like we were really adulting well. Things felt steady and safe, until they didn't.
After a sudden job change and some unforeseen car troubles, we found ourselves going from years of no car payments to 2 very healthy car payments every month. Then our driveway needed $9000 worth of work that we took out in the form of a personal loan. Couple that with some significant unexpected hospital bills from a freak salmonella exposure our youngest daughter had, and we found ourselves sliding backwards very quickly into a deepening black hole of debt. Not to mention the 6 credit cards we had between the 2 of us that we were carrying balances on, because that's just normal, right?? (HINT: it's NOT) As the CEO of our family, I've always been the one to take care of paying the bills, and I was starting to panic. We were in our mid 40's and absolutely headed the wrong way. In November 2019, I stumbled across the Dave Ramsey and his plan resonated with me. I ordered his book, binged the podcast and ranted to my husband about him. He thought I was crazy, but agreed that we needed a change.
Shortly after reading The Total Money Makeover, I sat down with pen and paper and wrote out every debt we owed. Every credit card, car note, personal loan and furniture loan (the dumbest of them all, thank you very much). The amount we owed took my breath away and scared me shitless. I wondered how this could have happened, especially on my watch as the CFO for our family. Then I wondered how in the hell we were going to get out of it before we had to worry about college and retirement and all.the.things. Turns out with a little faith and a lot of focus it can be done. Here's how we did it. After a deep dive into our debt, we decided to follow the baby steps and pay them off smallest to largest, regardless of interest rate. The next thing we did was to implement a budget. A TIGHT budget. We looked over our monthly subscriptions and slashed whatever we weren't using or didn't have value (there were so many $5 and $10 fees I didn't even realize I was paying for!) Next up was negotiation mode. Now I know calling up your cable provider or cell provider and renegotiating your rate sounds about as fun as a pap smear, but trust me when I tell you it WORKS. We were able to lower our cable bill, cell bills, and insurance premiums all because we asked. Hell I even negotiated with my hairdresser and was able to save $60 on my next color and cut (I'm most proud of that one because I thought for sure she'd think I was nuts......but I did it anyway because I'm crazy like that and love a good challenge).
We started using a zero based budget, which basically means you give every single dollar you earn a specific job to do. Although it sounds simple, most people aren't giving their money a destination but instead are letting it just hang out in their bank accounts and hoping there's enough at the end of each month. Giving every dollar a purpose was a game changer for us, and definitely helped accelerate our debt payoff. After cutting, budgeting, sacrificing and hustling, I am happy to say we have paid off over $70,000 of debt in the past 14 months. During a global PANDEMIC. It's been hard, eye opening, humbling and freeing, and I can't imagine a better way for our family to live. We aren't 100% debt free yet, but we are on our last debt and plan to be debt-free minus our mortgage by this summer. This journey has forced us to set goals, get on the same page, and work together so we can achieve our financial dreams for our future. There's no better feeling than being in control of our money and having the financial freedom to know whatever happens, we're going to be ok. And we're never going back to our old ways, which is the best gift of all.
Comments