Reminder: I am currently half way through my debt free journey so I am depending on my awesome memory for this story.
The Year Was 2009
I was sitting at my home computer browsing the community forum boards on The Knot and somehow I came across a post recommending a financial book. Since I have always been interested in personal finance I decided to read on about this suggestion. The book was, “The Total Money Makeover” by Dave Ramsey. At this particular time, I knew nothing about Dave Ramsey and never heard of this book even though it came out in 2003. My first financial book was, “Girl, Get Your Money Straight! A sister’s guide to Healing Your Bank Account and funding your Dreams in 7 Simple Steps” by Glinda Bridgforth, so the interest has always been there. (Thanks Dad for picking it up for me in 2001) Other than that book, my other financial advisor in my head was Suze Orman. Dave Ramsey was definitely new to me but several community members was saying this was a good book.
Libraries have free books!
Due to a recent layoff because of The Great Recession which really hit the manufacturing industry I was out of work. I was also planning to get married, so finances were pretty tight in my neck of the woods. Therefore, there wasn’t a lot of extra spending going on so I checked it out from my local library. This book was so good and since I wasn’t working, I think I read it in two days. In my opinion, it was an easy read and it got me excited about getting out of debt FAST! Needless to say I didn’t get gazelle intense and follow the plan step by step otherwise today, 9 years later, I would surely be out of debt and not blogging about the remaining $50,000. (More to come on that in another post)
Enter The Total Money Makeover
“The Total Money Makeover” consists of 7 Baby Steps. In baby step 2, I remember being instructed to total up all of my debt from lowest debt balance to highest debt balance, and create a debt snowball by paying the minimum payment on all other debts while throwing all extra money on the lowest balance. This process would continue as you pay off each debt with your snowball getting larger as you knock out each debt. I created my snowball, printed it out and then suggested to my then fiancé, (now husband) that once we get married we should live off one income and use the other income to pay off all of our debt. Yes, I was that fired up! Guess what? He said, “No” to that idea and honestly I didn’t push the issue, but I wish I did. I think he didn’t like my idea of cutting the cable off. Soon after, I tossed that snowball printout to the side and it was out of sight, out of mind. (Again, More to come on that in another post) From there, I continued being normal with my finances – didn’t create a budget, paid minimums on debt but I did carefully watch our wedding expenses.
We got married in May 2009 and I found a new job in October 2009 after being unemployed for 8 months. Then fast forward to May 2010, I decided to buy a brand new 2010 car. Yes, brand new but I never regretted purchasing my car which I still drive today. I financed it at 0.9% financing for 60 months and figured that was a great interest rate. Everyone I know, finances their cars for at least 5 years so that’s just what I did.
At this point, I was just living like most normal people with a car note, monthly revolving credit card balances and student loans, but I knew that a change had to be made because so much of my income was going towards debt and I like to keep my paycheck. I don’t work to simply pay bills. Again, I don’t work to simply pay bills. There is so much more to life than working and paying bills. It helped that me and my coworker at that time, (Hi Glenda) would talk about saving money, paying off our debts, traveling etc. Then, one day I went online and created another debt snowball that calculated my debt free date and how much I would need to pay on each debt monthly for the plan to work. That is when I realized that I had nearly $100,000 in debt, not including our mortgage:
$20,000 in Credit Card Debt – Just shopping, eating out, charging whatever – you know just being normal.
$23,000 in Car Debt – I could “afford” the monthly payment and I deserved a new car – again normal.
$56,000 in student loan debt – Well, how else would I pay for college? Its normal to get student loans.
Immediately, I knew that something had to change because $100,000 in debt isn’t cute and if that’s considered normal, then I choose to be weird. Very weird!
“Debt is normal. Be weird.”
– Dave Ramsey
Stay tuned and I will discuss how I paid off $50,000 of my debt and Thank you so much for reading.
Let me know, have you read any of the books I mentioned? Do you plan to read either or both of them? Or please share a favorite personal finance book of yours in the comment section.