Well, it’s official!! We can yell “WE’RE DEBT FREE!!!!” Yes, it is true. We have completed baby step #2 of Dave Ramsey’s The Total Money Makeover Plan, which is to pay off all debt besides your mortgage. Sean and I paid off approximately $77, 500 in under 2 years (January 2012-November 2013). Our debt snowball included our automobile loans and college loans. We were fortunate that we did not have any consumer debt, which would include debt such as credit card debt.
There are a few things that I have learned thus far on our journey to financial peace and freedom:
1) A budget is absolutely essential for success: when you have a plan and tell your money where to go each month, you can ensure success. Starting off with a budget can be overwhelming and it may take a few times to “get it right”, but once you figure it out, your budget is your best tool. Sean and I actually look forward to sitting down to plan our budget and review it each month now.
2) It is beneficial to be “gazelle intense”: some people don’t decide to be “gazelle intense “ about paying off their debt snowball. Sean and I were and it was every bit worth it. Being gazelle intense means “you need to work as hard to get out of debt as a gazelle works to run from a cheetah”. Read more on gazelle intensity here: http://www.daveramsey.com/article/gazelle-intensity-do-you-have-it/lifeandmoney_debt
3) You don’t have to live on “rice and beans”: There is a common misconception that those that follow The Total Money Makeover plan are living on a “rice and beans” budget. This is not necessarily the case. Don’t get me wrong, you have to make sacrifices, but you can still budget to have fun and live life.
4) However, the sacrifices are well worth it: It is about living like no one else now, so you can live like no one else later. Essentially making the small sacrifices now, in order to prepare for a solid future. We are looking forward to a bright future! Sure, we have had to cut back on frivolous spending, eating out, vacations, etc. However, we know this is just temporary and really we haven’t missed out that much. Actually, it has been somewhat rewarding and has changed our perspective on life. It makes you think twice before you spend your hard earned money, and it makes you appreciate the small things in life.
5) There is no such thing as “good debt”: Our society lives under the impression that we must have debt to have nice things. What happened to the good old fashioned concept of saving money for things that you want or need? People think that you need debt to build a good credit score, etc. However, if you are not living on debt, you don’t need that score. I find it sad that those that work hard to save money and pay for items in cash are the ones that are penalized or considered “odd”. Our grandparents generation did not live on debt and saved money to make purchases, rather than buying everything on credit. We are only a few generations removed from that concept and living that lifestyle. I would like to see our society go back.
6) Working together with your spouse and agreeing on finances strengthens your marriage and bond: This is probably one of the most important lessons learned and the most gratifying. Having a strong financial foundation has made our marriage stronger and strengthened our bond as a couple. With the rates of divorce today in our society being greatly attributed to financial disagreements in a lot of cases, the aspect of agreeing on finances is comforting. Especially when it comes to making big purchases, you and your spouse should be on the same page.
We are hoping to call into the Dave Ramsey radio show to be able to give our “debt free scream” and share our story. Another venture we would like to take is a trip to the Nashville, TN area where the Financial Peace Plaza is located with the couple that recommended the Dave Ramsey The Total Money Makeover plan to us and guided us through getting started on our journey. We would like any chance we have to pay forward the great opportunity that our friends presented to us through sharing our story or offering any tips/advice to those that are interested in beginning a journey towards financial peace through The Total Money Makeover. Consider that an open invitation to contact myself or Sean if you have any questions! We would love to help!