Financial Peace

Dave Ramsey

A few years ago, I read Dave Ramsey's book, "The Total Money Makeover" with my husband.  We were energized and committed to doing a better job with our money.  Prior to reading the book, we felt like we were doing ok with our money since we always made all our payments on time and had enough money to do what we wanted to.  What we didn't realize until after reading the book is that we were in bondage to our payments.  We had two car payments, a first and second mortgage (second was to finish the basement), and student loans for both of us.  We didn't really have credit card debt, which is what gave us that sense of "all is well" with our money.

Dave's employer had an employee stock purchase program.  We had 10% of our income deducted from our paychecks invested in this.  We could sell the stock every 3 months and use that toward whatever we wanted to use it for.  It turned out to be a wonderful deal for us.  At first, all that money coming out of the paycheck hurt a lot.  I didn't think we could afford it.  Then as time went on, we adjusted our spending to meet the paycheck.  Every 3 months, we had several thousand dollars to use to pay down the debt.  We paid off the smallest balance first, as Dave Ramsey suggested.  We ended up paying off both cars in one year and the second mortgage the next year.  We paid off my student loan very quickly and then David's is almost completely paid off.  All the while, we have been able to live well.  I failed to keep track of all the debt total, but I do believe we have paid off around $60,000.  We also refinanced our house about 2 years ago for a 15 year mortgage with a better interest rate so we could pay it off in the next 5 years.  At the time we did not know we would be starting a new job and moving away.

The hardest part for me is that we have had to forgo going out to eat and we almost never go anywhere for vacation.  When we do, it is usually camping or visiting relatives.  I haven't gotten new clothes except as gifts in years.  I get my hair done about once a year.  For those who are more fashion conscious, it would hurt, but for me, a pony tail and jeans is fine.

Now that Dave's new job does not have an employee stock purchase plan yet, we have had to figure out how to better manage our money on our own.  It is easy when it is not there to begin with to not spend it. When you have to be focused on a budget, that is when it becomes harder.  We have learned to keep a budget only recently.  I used to just watch the balance in the bank to know when to stop buying things.  Now, we have finally understood one of the key components to having a healthy financial life.  It is all about knowing where each dollar goes.  I am so proud of us for keeping on a budget and having enough money left over to save without being forced to do it.  What new freedom we have come to realize!

Now for the tricky part:  We are selling our house and moving into a more expensive and nicer one.  I am struggling with this because I want to be reasonable about my expectations and make a good decision.  Is it really mature to add on so much debt to our mortgage and add at least 20 years onto our bondage?  I am trying to figure this out.  This will be our home for likely a very long time so I want to be comfortable and I want to love my home.  On the other hand, we could get by on something smaller and less "nice" if we care enough to save that money.  Oh the dilemma!  I'll let you know how it turns out.  We have been praying about it and we will follow the answer to those prayers.

Thank you Dave Ramsey for helping us change our lives!