Tuesday, February 2, 2010
So, after we filed our taxes and found out we were getting $2,000 LESS than we had anticipated (and the money had already been spent), we were pretty upset and started really thinking about our finances. Ward went to bed in a bad mood and I wanted to try to fix things.
In our married life, we've had our share of financial ups and downs, like most everyone we know. We started out at age 24 with 2 car payments, a house payment, a student loan payment, and some credit card from me. Over time, we paid off the credit cards and vowed never to use them again. Well, when we wanted to remodel our home, we decided to take out a lien against some land we owned to the tune of $22k, which became another debt. Eventually, we moved to a bigger house, paid off the lien when we sold the land and went into debt AGAIN to remodel the second house. Then, we sold what was left of our land and moved to an even BIGGER house. Things were going great, but the credit card debt started creeping up again slowly. We were buying whatever we wanted, whenever we wanted it. We ended up having to take out an HEL to pay off the second round of credit card debt in 2007. We swore we'd never use the credit card again. Well, then Ward decided it was time to change jobs, and this new job didn't have tuition reimbursement and he was so close to finishing his master's degree. We ended up having to put his last three classes and books on the credit card. Then the pipes busted outside, our computer died, our TV broke, and we had to put up a privacy fence, etc. And here we are again, $$ on the credit cards and now only able to pay off some of it because our tax refund was smaller than we thought.
I prayed and prayed and thought a lot about what to do and was staring at my bookshelf in my office when my eyes were drawn to a book we'd had for months, but never read...Financial Peace by Dave Ramsey. I knew a little bit about Dave, but not much. I knew he was against debt completely and thought it was important to have a $1k emergency fund. So I pulled the book out and read it cover to cover that night and then immediately got on the computer and started working out a plan for us.
On his "debt snowball" plan, we will have our emergency fund in place this week, and will have our credit card paid off in a few months. We'll have both of our cars paid off in 2 years. And when all of that is done, I will be calling his show to scream "Weeeeeeee're Debbbbbbbbbt Freeeeeeeeeeee!"
I encourage you all to read this book and take control of your finances if they have gotten out of control. We're only 4 days into this and I already feel great!