Over the last year and half my husband and I have become a fan of Dave Ramsey's program for paying off debt - and staying debt free. We purchased the Financial Peace University Cd's and have listened to them together. I also listed to Dave's podcast through his monthly subscription program.
I think at this point we are able to agree that we want to live without credit cards and debt of that kind. I see the future for being completely debt free but I am not sure my husband believes that long term. But that is okay for now, he is participating in our quest to pay off the credit cards and I am happy with that.
There are a series of baby steps that you go through in order to become debt free and build wealth. Baby Step 1 is to have a $1,000 Emergency Fund. My husband and I have accomplished this step several times. It has really been a struggle. Not necessarily because it is difficult to come up with the money, but rather keeping the money. I tend to spend what I have - that is the reason we got in this mess in the first place. So each time I had the money set aside in the emergency fund I ended up using it to go over my budget. Now back when we first started this journey we were struggling to pay all our minimum payments and there wasn't much left over. Things have gotten better and we now have the ability to put $2-$4k each month towards our debt snowball.
But, the problem is that I am so dedicated to paying off our cc debt that I cannot bring myself to set aside the $1,000 in an account (again). I realize that things will come up but I feel like we have so much availability each month that if something comes up, it can come out of out of our monthly budget and cause us to pay off less that month. I know that is not the ideal way, but that is the way I am going for now. I think once I pay off all credit card debt (hopefully by December 2011) I will go back to Baby Step 1. Then we can move forward with Phase 2 of Baby Step 2 and that is to pay off our cars and student loan. I am hoping to have Phase 2 completed by December 2012!!
I found you by way of the Dave Ramsey forums and I’m looking forward to following your blog. I too was in a similar situation a few years back…my wife and I owed over $90,000 of consumer debt…and we were able to pay it all off in two short years, you can read about our debt freedom success story on my blog (linked in my name). Just click on “My Family’s Debt Freedom Story” in the navigation menu.
ReplyDeleteUpdate please!
ReplyDelete