The Total Money Makeover
This has been one of the most life-changing books I’ve ever read. And let’s be real… the book didn’t change my life, following through on the advice in the book is what changed my life.
If I wanted to make this a long-ass post, I would tell you every single way that happened!! But…
...so I’m going to try and hit the main points!!
I picked up the book in March of 2015, read the whole thing in a few days and announced to my husband, WE'RE DOING THIS!! We had been married two and a half years at this point, still had separate bank accounts, handled bills like roommates and we were making good money but had no financial goals set out at all. We honestly didn’t even know how much debt we were in, we just knew we could pay the monthly payments...so we were good, right?? We can have whatever we want as long as we can make the monthly payment, right? -- that’s what our upbringing and culture told us anyways!
We sat down to list our debts smallest to largest and when we tallied it all up, I think we both about shit our pants! $106,614.86. Holy balls! How did THAT happen?? It happened because we needed new furniture, a truck for Drew and why not use our Amazon credit card so we can get points? That’s just logical, right? We had over $1700 going out to door to loan payments? Excuse me???
We wrote up a budget for the first time in our married life!! Well… I wrote it up because I’m the nerd even though my husband is the math teacher! Guess what? That first month, we left out a bunch of things that we just totally forgot about. FAIL! So we tried again the next month and the next month. As time went on, we got better and better at it and the best thing to come out of all this - other than paying off the debt - was opening to door to those conversations! We’d never really talked about money before so the subject was all awkward-turtle and stuff!
After 6 months, we’d paid of $27,000!! After 1 year, we’d paid off $38,000! We trudged away for 2 more years and made our final payment on February 10th, 2018 and celebrated together in the office!
Why did this plan work for us? Because it set us up to win psychologically. Paying the debt off smallest to largest sets you up for some quick wins at the beginning to help you build momentum! As we crossed loan after loan off the list and started paying more each month toward the other loans, we continued to see the progress we were striving for!!
I think about that Small Wins = Momentum philosophy in other areas of my life now too! I’m totally guilty of getting really really excited about a big picture idea and then getting nowhere!! Now when I have a big goal, I think about the baby steps and what small wins I can get. Sometimes this even comes down to my daily to-do list and I tackle a few of the easiest/quickest things first!
We finally took Dave’s advice on the gazelle intensity. We cashed in $7,000 that I had in mutual funds and used it to pay off the loans, leaving just our $1000 emergency fund. In the three years it took to pay the debt off, we didn’t have any emergencies over $1000. And let me clarify - we had expenses that were over $1000 - Hello! We had a baby! But because we had 9 months to plan for that and were set up better financially, as soon as the invoices arrived from the hospital, we wrote the check! The plan also allowed us to cash flow my visits, lab tests and medications when seeing our fertility doctor.
I’ve talked with several people who say “We’re following Dave Ramsey, but not this one part.” and my response is - so you’re not really doing it then? The thing is that thousands, possibly millions, of people have had success following this plan, so why are you any different? What we were doing wasn’t working, so we decided to give this a shot and I’m so glad that we did!!
Paying off our debt allowed me to quit my job & spend more time with Samson while I’m exploring what it is that the Lord wants me to do with my life!! I’m grateful that my husband has supported that decision and I’m grateful for the income he’s providing our family while that happens!!
Baby Step 3 (save 3-6 months of expenses) has been slow going on one income and we’ve definitely gotten less intense about the baby steps. We had a hard conversation on the car ride to Ellsworth last weekend and the solution to the problem is - we need to get back to setting CLEAR GOALS as a family so that we can work toward them together!! Another life lesson learned through The Total Money Makeover.