I was driving to the store the other day to buy groceries. As a family of 8, groceries are our most expensive bill each month. As I was driving, I saw a sign advertising the classes by Dave Ramsey called “Financial Peace University”. I realized what that meant at that moment. I had peace. I had just gotten some very large bills from the hospital the day before. They were bills from Andrew’s birth and my D and C. I was upset by them, but not because we couldn’t pay for them because of what they symbolized. I was upset that we went through all that and have no child on this earth. It wasn’t at all what we had planned for, financially or otherwise. We had started saving what we thought the birth center delivery would cost, but this cost twice that much. As I said, though I had peace because we have an emergency fund for just such unexpected things and we can cover the bills. I cannot imagine what added stress and grief we would have if we could not afford to pay for these bills. I was so glad we had made changes in our family’s lives and finances a year and a half ago so that we could have financial peace amidst a personal storm. I realized at that moment, and then later on when I heard someone from my church speak about their financial hardships in front of the congregation and watched as everyone shook their heads because they too faced the strain of financial stress, I wanted and needed to help other people find peace.
If you are in a place of financial stress, it doesn’t have to be that way. I want to share our story. For our whole married life we lived paycheck to paycheck. I mean, no savings and one large bill away from financial disaster. It wasn’t because I didn’t try, I did. I was in charge of the finances and I made budgets and tried so hard to stick to them, but I couldn’t. Life would throw surprises at me and I would “blow” the budget. I would get frustrated and give up. Finally, after we adopted Joshua we found ourselves deep in debt. I was very worried about where we were headed and how we would ever get out of this debt. I read the books by Dave Ramsey and tried to implement the strategies, and had some success but didn’t stick with it because I didn’t understand how to budget. I would write a budget and try to track how I spent the money, but at the end of the month there was never enough money to cover the expenses. We were putting everything on credit cards so I was essentially a month behind in my bills. We thought we were doing a good thing because we would get rewards from putting the expenses on the credit cards. Finally, a year and a half ago I got fed up. I realized we were in trouble and I couldn’t fix this alone. I got a very reluctant Glenn to read Dave Ramsey’s books. He did, finally, and he started working with me on a budget. He finally took over the monthly budget and we agreed to get out of debt. We still had a good bit of debt at that time. We worked really hard and early this year we got ourselves debt free, except for our house. It felt really good. We then saved up an emergency fund this summer and thank goodness we did, so that when tragedy struck this fall we had what we needed. I now don’t worry about if we will have enough money each month. I don’t worry about the future because we are finally contributing to retirement, which we hadn’t done before. I have financial peace. If a storm comes, as it has, I don’t worry because we have an emergency fund. I know so many families who are burdened by finances, it doesn’t have to be that way. You can change that for yourself. Let me tell you how.
- Go to the library and check out all the books Dave Ramsey has written. Specifically Money Matters. Read it.
- Talk to your spouse and get them on board with getting out of debt. You cannot do this alone.
- Create a zero based budget. For all you OCD people out there like my husband you will find this fun, it makes me want to poke my eyes out. So, you get a spreadsheet and you determine what your income is. Then you determine your expenses. You allocated the money needed for each expense and if it you are spending more money than you make you have to cut the spending somewhere. Finally, you get the budget to equal zero. During the month when an expense comes, especially one you didn’t expect, you put it in your budget, but that means you must cut something somewhere else. You do not allow yourself to spend more money than you make. If you don’t have the money, you don’t buy it, even food.
- Get rid of the credit cards. Cut them up and don’t touch them ever again. I’m serious. I don’t care if you do get points or rewards and whatever, it’s not worth it. You are allowing yourself to spend more than you make and you are also a month behind in debt by using them. You spend more money when using a credit card than when you use cash. Go to only using cash if you need to. I use a debit card, but very carefully. I ask myself “do I really need this?” before I buy anything, even groceries. I do not over spend, ever. If we don’t have money for groceries we eat what is in the pantry.
- Cut out anything you don’t need. Let’s define need versus want. Need are things you cannot survive without. That is a short list, food, water, shelter. I know this all sounds harsh but it won’t be this strict forever, just until you get out of debt. If you have a car that you owe money on and you could sell it to get out of debt and drive something less expensive that you paid cash for, do it. If you can sell your house and live in something smaller to get out of debt, do it. Sell stuff you have lying around the house you don’t need. Get a part time job. Whatever you need to do to get out of debt quickly. We gave up eating out until we got out of debt. I mean no eating out, unless we had a gift card, at all.
- List your debts, smallest to largest and pay the smallest first. Then continue to the largest until you are debt free. You will feel so good when you get the last one paid off.
I know that is a lot of information. You will find more detailed information about how to do all this in Dave Ramsey’s books or his Financial Peace University. I promise you that this works if you stick to it. If we can do it on one income with 6 kids, you can too. It takes work and sacrifice but I cannot tell you how wonderful it is to have the peace that comes with it. If you need any help or have questions, I would be more than glad to answer those or help you. I really want everyone around me to have this peace and not worry about finances. If I can help make that happen, I will.