This series is not about giving financial advice. We are not ones to look to for that. This post is about sharing our story to give hope to someone in the same situation.
How We Came to Need Financial Peace
Sometimes you have to get mad enough, I mean really mad to make a change in your life. Back in early December my sister invited us to go to Colorado with her, our mom, and her 18 year old twins. It’s their last winter break before they graduate and she wanted to do something special. The plan was to stay in a lodge and snowboard and do a sleigh ride. We would have loved to have gone and made memories with my niece and nephew. However, we couldn’t for one simple fact. We did not have the money.
But we should have had the money. This should have been something we easily could have pulled from an account to do. If managed properly we make a very comfortable living. “If managed properly” is the key phrase here but the truth is year after year we have done a horrible job of managing our finances.
We would spend everything we had (Sometimes more than what we had as we used credit cards for “emergencies” and slowly ran those balances up.). We would save literally nothing. And if we got extra money we would find something like a trip to spend it on. We would pay off credit cards only to run them back up again. It was like a financial death of a thousand tiny cuts but we always paid our bills so we ignored that we were bleeding to death.
Oh, we knew what a mess we were in but it was like the elephant in the room. We just didn’t get talk about it or do anything about it. We just kept doing the same things we always did because that was what was comfortable. It still put a tremendous amount of stress on our family. It’s not the life I wanted to live any more. It’s not the example I wanted to be for our children who are now old enough to watch what mom and dad are doing. I wanted us to be better for them.
Financial Peace Take One
I had even taken Dave Ramsey’s Financial Peace once before but we never even really got going on it. I guess we just weren’t ready to change or hadn’t got mad enough yet. But before my sister asked me on that trip I had been doing a lot of thinking as the year came to a close. We weren’t any better off than we were at the end of the previous year or the year before that or on and on. You get the idea.
We had a lot of credit card debt. I was sideyeing student loan debt and I hadn’t been a student in 20 years. We had nothing in the bank (and it kills me to share that with you but I want to be fully transparent). We were basically treading water. Each month we made our minimum payments on time and spent everything we had.
I really got to thinking of where we were in life at 43 years old at our halfway point to retirement and how we had nothing to show for how hard we worked. We were so concerned about living in the now and taking a trip or purchasing something like the travel trailer when we weren’t ready that we weren’t making any progress cleaning up a mess it took 13 years to make. The only things we had done right were investing for retirement and starting a savings plan for our kids’ college when they were babies. I guess we finally really and truly got sick and tired of being sick and tired. It was time for a change. It was time for Financial Peace take two and to look up my old pal Dave again.
Hello Again Dave
I knew when I finally really got mad enough exactly who to turn to. Dave Ramsey. I may not have been ready to grow up the last time I took the class, but the fact is the class and the books do work. Millions of people have went through this easy to understand journey to get out of debt and build savings and wealth. The fault was ours not the program’s and I knew that even back then when I first took it and we gave up.
I decided this time we were going to be one of the millions who were living and giving like no one else because they could. Because they were debt free. Houses were paid off. Money was in the bank. We wanted to know what that feels like. I ordered an updated version of the book and the work book and we started watching the videos at home together and we got to work. This month we supplemented that journey with an in person 9 week class at our church.
Telling Our Money Where to Go
Dave Ramsey says in his books Financial Peace and The Total Money Makeover that changing your financial life is 20% knowledge and 80% behavior. We KNEW what to do (or at least most of it). We just weren’t doing it. Dave’s program is brilliant in its simplicity. You tackle one thing at a time and baby step your way out of your mess. It’s much less overwhelming than trying to eat the elephant all at once and you gain momentum as you see progress.
Starting at the beginning of November we started living on a budget which we should have been doing this whole time. Before each pay day we sat down and planned out where every dollar would go so that it wouldn’t go bye bye like it has been. We cut eating out to once per week. (This is where we threw away a tremendous amount of money over the years with waistlines to prove it.) We cut out unnecessary purchases like things for the kids or home. I started using digital coupons and the Walmart savings catcher app. I began cooking at home almost every meal (So look for some great new easy recipes here on the blog!). My husband started taking his lunch to work.
I stopped taking jobs on this blog and put all my time and energy to being the Chief Financial Officer of Penney Inc. because what we were doing in the past wasn’t working. We were spending money as fast as we made it. We didn’t completely stop living but we did plan for treats or entertainment. It’s not about stopping living. We just started living on a budget.
Baby Step One
Dave’s Baby Step one is simple. Put some money in the bank. We had no rainy day fund if a car broke down or any other kind of emergency. He wants you to focus on nothing else until you have $1K in the bank. We settled on $3K instead simply because a van repair is not cheap and we wanted to make sure there was enough for my husband to go home to Ireland if there was an emergency. Those two things would be our “storms” if a rainy day came. I’m embarrassed to think about how long we gambled with no emergency fund with those two possibilities.
Every extra dollar went into a separate savings account over the next two months. We opened a separate savings account and took the money out of our own hands. We have a checking account tied to a savings account and we would treat savings like overdraft protection. The separate account has an ATM card so we can get it if we need it but we can’t make purchases with it. We are saving us from ourselves.
Last week we fully funded that emergency account and haven been living on a budget for almost 3 months. I can’t tell you how much well, peace to use Dave’s word comes with that money in the bank knowing we can handle an emergency. Every day I check our bank account and monitor our spending to make sure we are on track. For the most part we are. We still have our training wheels on but we are pedaling. I have not felt denied for the things we said no to. Instead I have felt freedom knowing there’s not more month than money for the first time in years.
It’s a Marathon Not a Sprint
I am no financial expert (obviously haha!) but I wanted to share our story in case there is anyone else out there with that hopeless feeling and doesn’t know where to start. Dave Ramsey’s steps work for any income level. Anyone can change their life. There are people from all walks of life in our class. Maybe when it doesn’t feel so raw and embarrassing and we are further along in cleaning up the mess I will share exact numbers. I even waited until we had done Baby Step One so that I knew we were really committed to the program before I shared it.
The progress and the peace are addicting so I do feel like we will keep changing our lives. As we get further along in Baby Step Two the Debt Snow Ball I will share an update. We just crossed off our first debt and paid off our phones. (So if everyone else has Iphone 13 and we have 7 you know why. They’re paid for. Haha!) Bye bye Sally Mae and Chase Visa and all the others. You’re next. I’m kicking you out. On paper we are on track to pay off everything other than our house (including the travel trailer) by the end of the year. Can we do it? Stick around and see. I believe we can.
Start Your Own Financial Peace Journey
You can do the program with just the book and workbook on your own but I loved the inspiration from other student’s stories, the discussions, and the accountability of class. If Financial Peace the class is not offered in your area or you want to take the class on your own time in the comfort of your own home you can sign up online at Dave Ramsey’s website here