My husband and I read Dave Ramsey’s Total Money Makeover in March of 2009. I absolutely loved the book as it started us on our journey to becoming debt free in a year.
Our goal was to pay off a student loan, home equity loan, and to get my husband a used car since his 15-year-old SUV was on it’s last leg. It was about $25,000 worth of debt and we were looking at used cars in the $10,000 price range.
We started by:
- Making sure our allowances for our taxes were correct so that we were getting the maximum amount back per paycheck
- Temporarily discontinuing contributions to our 401K and the kids college funds
- Cutting back on eating out
- Using coupons
I realized that in one month I spent $600 at Target! It was not all at once but $50 dollars here and $75 dollars there, it added up fast. After that discovery we really only bought necessities when shopping.
We started using Mint.com to keep track of our spending habits. Once we figured out where all the money was going, and stopped our other contributions we came up with an extra $2000-$3000 per month to go toward debt.
We paid off both loans one year later on February 22, 2010, and two months later we paid $11,000 in cash for my husband’s Mazda RX-8. Handing over the check was pretty scary but it felt awesome!
We continued to save the following year and now have $25,000 in our savings account for emergencies, and no debt except the house. We have also been able to increase our tithing at church. We have almost given more to church the past three months than we did all of last year at church. It feels wonderful!
Our next goal to to save for retirement by increasing our contributions to 15%. Everything that is leftover will go toward the kids college and pay off the mortgage. I would also love to be able to start helping more people in need now that we have our act together. I would love to give that big tip to a single mother who is a waitress or give a $100 bill to a stranger in need on the street.
It is amazing to me that when we were not managing our money well, we wanted to go out and spend it. In contrast, now that we have money set aside, we do not want to spend any of it!
I am so looking forward to see what this year brings. We have been blessed by God beyond belief. It truly is amazing.
Terri is 36 and a stay at home mom to her two wonderful kids. Her husband is 43 the Senior Director for a Computer Consulting firm. Terri likes to make a little extra money every now and then by subbing at her children’s old preschool and picking up an occasional data entry project for her husbands company.
Do you have a story to share about your financial journey which would encourage other readers and give them hope? Email it to me and I’ll consider posting it.