In 2007 Crystal and I saw Dave Ramsey for the 1st time at Catalyst. We heard him talk about how dumb debt is and how easy it really is to control your money. It sounded like it was even easier if you start when you're 1st beginning life (i guess we were still "newlyweds" = married for just over 2 years).
We kind of looked at each other and nonchalantly said "you wanna try it?" & we were both like "sure" with a shoulder shrug, "why not?"... little did we know how dramatically our lives would change.
within a couple weeks i went out and got Dave's book The Total Money Makeover (TMM) and read it in 2 days. i was absolutely blown away! This was the greatest plan i had ever seen. even a financial dummy like me could follow it. i couldn't even screw it up!
So, December 2007 was our 1st month to give our TMM a shot. Crystal and i set up a budget before the month began. We told every penny where to go. And that month we put our 1st $1K emergency fund in place. (Baby Step #1)
The next month (January 2008) we hit the debt snowball trail hard! (Baby Step #2) We went hard core paying off our debts 1 at a time. i still remember the 1st one we paid off. $592 on the Lowe's credit card for our whole gas fireplace setup. What a dumb thing to buy on credit! the "no payments, no interest" sucked us in. never again. it felt great to pay that off in the store because i knew where this plan was taking us!
We started having more and more money to throw at debt the more debt we paid off! It really was like a snowball! (We stopped using our other credit cards, btw)
We mowed down our debts - Home Depot credit card, a big one (like $3,500) to Wells Fargo for our whole King Sized bed & bedroom furniture we bought at Mattress Firm, etc...
I was pretty hard core about this whole plan because i could see the end game (the plan i wrote about on Monday.) i knew that we could be debt free pretty soon and that we could even be done with all 7 steps in around 7 years!!!
Crystal, on the other, hand started started having her doubts. i was so hard core that i cut out all spending from the budget. we were literally spending no money for about the first 3-4 months.
that's when i got my 1st big lesson... my hard core approach had caused Crystal to jump ship! Around month 3 or 4 she was ready to go on a shopping spree and put it all on a credit card. i made it so bad for her that within a couple weeks i heard comments like "I don't really care if we have the money, i just want to buy something." and
"Dave Ramsey ruined my life"
and the most famous quote of all =
"If I ever see Dave Ramsey I am going to kick him in the balls!"
so, i wised up and loosened up for the sake of a lot of things (you can thank me later Dave! In fact, another time we saw Dave speak Crystal leaned over and said "now is my chance." haha, totally joking of course. i think.)
When she worked one Friday after that i went to the mall and bought her a ridiculously expensive outfit i knew that she wanted from White House/ Black Market. it was a total surprise. i had them gift wrap it. (She hadn't bought clothes in months.)
She also hadn't even bought Starbucks in months, so i timed it perfectly and bought her a Venti of her fav drink + a Starbucks gift card and laid it all out on the table. i also grabbed a card and wrote her a note just thanking her for being an awesome wife and for sticking with this plan with me.
That was a good night.
*And i learned a very important lesson. You can get out of debt wtih gazelle intensity but still have fun along the way. In fact you have to or else you will give up. we started a new budget item of "spending money" that she could spend on whatever she wanted to.
Some time in 08 is when i started grabbing extra jobs and ended up with 5 for a little while. that obviously helped get out of debt faster!
i also went for over 1 year without buying a thing. literally. i didn't spend a dime. like i may have bought groceries so we could eat or a light bulb so we could see, but i bought nothing "for me" for over 12 months. my choice. i honestly kind of just wanted to try it. a 1 year boycott of spending money and materialism. you can call me weird. that's fine with me. i just call it focused.
Later we paid off Crystal's car. Her beloved 2003 Ford Focus that she bought brand new with her dad as a junior in college. that was a good day when we paid that off. it definitely drives different when you own it.
*believe me when i say this = when you go after something like this with "gazelle intensity" (as Dave calls it) it seems like you get crazy momentum and the wind is at your back. it feels like God is behind you helping push and money comes from everywhere.
We got a crazy huge tax return that summer and because we were so disciplined by that point, we didn't touch a dime of it and dumped the whole thing into paying off our debt!
Several other things happened like that! chunks of money from unexpected places... all straight to debt because we were focused and had a plan.
the only debt left (besides our mortgage) was actually our 20% mortgage from our 80/20 loan when we bought our house. it was the last and biggest on our debt snowball list of victims. a little over $20,000!
tomorrow i'll write about that and the rest of our journey so far.