The winner is Sister Copinherhair. Her comment was : Right now, I would have to say it is my credit cards followed by my car payment. I dream of not having those. But it is hard trying to pay for a house and kid by myself. Send an email with your mailing info to email@example.com and your book will be on it's way!
To everyone else who would like a copy of this book, Amazon has some used editions for less than $8 a copy, plus shipping. I've also seen his book at Half Price Books, so if you have one in your area check there. Also, he is very popular right now and chances that someone you know has a copy of his book that you can borrow are very high. If you go to Dave Ramsey's website you can choose to find a station in your area that plays his show or you can listen to the podcast, or listen live if the show is taping. I would encourage you to listen to the show, especially on "Debt Free Fridays" when callers call in with their story of how much debt they had and how they got out of it. You will truly be inspired.
Thank you again for reading our story. There IS hope out there!
According to Dave Ramseys' Total Money Makeover there were seven baby steps to follow.
#1 - Start a $1000 emergency fund.
Thankfully, we already had that out of the way.
#2 - Pay off all debt using the debt snowball.
We were to list all our debts, beginning with the smallest, and pay that one off first. We had rolled all our credit cards onto one card since it had a great promotional rate so the only debts, apart from our mortgage, we were dealing with was the one credit card and our car.
#3 - Build 3-6 months in an emergency savings account.
Before we had sat down with Dawn we'd never had more than $100 in savings at one time; $1000 had seemed impossible. Looking at 3-6 months expenses meant we'd need about $9000-$18,000. That really seemed impossible...but if we could pay off all our debt, maybe it wouldn't be such a difficulty.
The other baby steps were great to learn about, but I knew it would be awhile before we had to apply them so I read the basics but saved the details for a later date.
I got to work on our new budget - hope and determination fueling me.
When I finished, I looked at our new budget with a little bit of disbelief. Were we really going to be able to put over $650 a month toward our credit card? How was that even possible? I carefully looked at every line of the budget, I scrutinized every bill. Yes...there was still money for groceries. Granted, it was only $200 per pay period, but that was more than I had been using when we first sat down with Dawn. Yes...there was gas money. The cell phone bill was getting paid, the internet would stay connected...everything was in order. With Mike's recent raise, our recent drop in the mortgage payment and our willingness to give up some of our spending money we were going to be adding an additional $200 to our credit card. I was dumbfounded...I hadn't known we would have that much extra. I called Mike over ot the computer and he looked over my shoulder.
"Wow," he uttered with the same amazement that I felt. "That ... is ... awesome."
"I also made this," I said and showed him a goal sheet. "Dave says in his book that one lady listed her goals and put them on her fridge. Then every time she walked by it she would do a little dance and say, 'oh yeah!'. It sounds dumb but look...I think if we have goals for when we want everything paid off it will keep us motivated. So, I picked some dates..." I handed him the sheet.
"No. I don't know how much we owe. But look...we can reward ourselves with a vacation!"
He smirked at me. "Let's figure out what's possible first."
So we got out our credit card statement and our car statement and quickly added the balances together. It was just under $27,000.
"Still think we can pay it off in 18 months? That's roughly $1500 each month...and we've got $650 available. Where's the other $850 going to come from?" he challenged.
"I don't know!" I paused for a minute, drew in a deep breath, then said "Look, I know these are impossible goals. We can readjust them, but I just think we should try - we've got stuff to sell, I'm sure there will be overtime...I really think we should at least try."
"Ok," he said. "Then we'll get it done." I loved having his support; although he challenged me I knew he was trying to make me think. I knew I wouldn't be able to do this without having him board 100%.
"You know what I've been wondering?" I asked him. "How much total debt we have...I mean with our mortgage and what we have rolled into it. We bought our house for $165,000 right? But now we owe more than that because we refinanced and used that money to buy a car, pay off credit cards...how much of our mortgage is debt we should be paying off the old fashioned way?"
Mike exhaled a deep breath while doing the math in his head.
"We'd need to add another $67,000."
I stared at him in disbelief. "What did we do with $67,000?!" I exclaimed. "That's like...$94,000 all together! Are you kidding me?!"
"Well, we paid off our Expedition...that was about 15 grand...and we've paid off two credit cards...each had about 10-12 grand on them ... and the rest we put into the house. I think."
"So, do we add that $67,000 into what we're paying off? I will definitely have to change the goals."
"What does the book say about the mortgage?" he asked.
"It says that you pay the mortgage off at the end. It shouldn't be part of the debt snowball. It's baby step six or something."
"Well, what's done is done. We'll stick to the plan and go with the $27,000. Thankfully we're in a fixed rate mortgage so we can pay it all off when we get to baby step six."
I was relieved. As on board with paying off the debt as I was, and even if we could come up with the extra $850 each month, if we had to pay off $94,000 it was going to take us at least five years. If we couldn't come up with that money ... it was going to take much longer. The $27,000 seemed within reason, attainable...and I really felt that we'd be able to find that extra money each month. I just wasn't sure how.
I knew we needed a few things for the baby. After Brooklyn had been born I was pretty sure we were done having children and had given away most of our things; plus, most of our things were used when we got them and they had been used by three of our children. I was hoping to get some new stuff. I looked at our church's classifieds and saw that one of my friend's was selling a bouncy seat for $15. I emailed her and asked her if she'd take $10. She said she'd have it at church on Sunday.
It wasn't the exact bouncer I wanted, but it would work. I was thankful to have found something for $10. I was using my precious spending money and it was difficult to part with it, even if it was for something I knew we would need. I tossed the seat in the back of the car, finished buckling the kids in and headed for home.
It was getting to be difficult to get the kids to and from church by myself. Mike was with me every other weekend but with my middle was more and more obvious and my children were only getting heavier; I wondered how I would be able to keep it up ... and I still had three months left.
I was exhausted as I pulled into the driveway; the kids were hungry and I was ready for a nap. The kids ran for the front door while I walked around to the back of the car to retrieve the bouncer seat. I reached up to close the lift-gate and something in the driveway next to the house caught my eye. I closed the lift gate and walked over to the house. There, in the gravel, half buried in the muck, was a ring. My ring. The ring Mike had bought me for our 5th anniversary; the ring I had somehow misplaced and been looking for for three years.
It wasn't possible.
I bent down closer and picked it up. It was my ring. I burst into tears. Three years I'd spent combing through vehicles and our home. I'd scoured my parent's house and yelled at my children and begged God to show me where it was. When we'd sold our car and my parent's had torn their house down to the studs for their remodel, I knew it was gone for good. Mike had been disappointed; it had hurt his feelings.
I fumbled to pull my phone out of my purse.
"Honey..." I was crying too hard to talk well.
"What's wrong? Are you ok? Is the baby ok?" He was worried.
"Honey, I found the ring," I managed to say.
"What? What are you talking about?"
"My ring! MY RING! I found it...it was HERE in the driveway!"
"No. Way." I could tell he was choking up. "Are you serious?!"
I told him how it had just caught my eye; that we'd been walking past it all this time.
"Three years!" he exclaimed. "Are there any diamonds missing? Any sapphires?"
"It's dirty but it's all still in one piece!"
We both laughed excitedly as I placed the ring back on my finger. I was in total disbelief.
When I told to story to Mike's dad he looked at my sweetly and gently said,
"You know...isn't it interesting that you guys have started to get your finances in order just now? I really feel like this is God's way of telling you that you are on the right track. He wants to bless your obedience."
And I did feel blessed. Very, very blessed. In the coming years, when it was difficult to follow the plan, when I wanted to spend money I didn't have, when I wanted to quit, I knew I'd be able to look at my ring and remember where we'd been ... and where we were going.
To be continued...