This post is part of an editorial series, “Money Matters.”
Two months ago, our little family became debt free. We didn’t call Dave Ramsey and scream it over the airwaves — although we could have. We did, however, announce it on social media. Nothing’s real until it’s Facebook official, y’all. We had worked hard to pay off exactly one credit card, thousands of dollars in medical bills from a miscarriage, my husband’s truck, and two student loans. It took us longer than it does for most people. Between the time that we started our get-out-of-debt journey to now, we had four job changes, four moves, two kids, and three years of seminary. So, I am proud of the fact that we were able to do this at all.
I am a spender, not because I need or want fancy things, but because I like to have fun. And, friend, on the surface, budgets aren’t fun. My husband is a saver, but when he does spend, he spends big. The man has a $90 key chain. Don’t get me started on that one.
Six months into our marriage, we knew we needed a plan for how we would spend our money and get free of debt. So, we got started. We took Dave Ramsey’s Financial Peace University through our church, and we implemented the principles the course taught. Five years later, we are still using those same principles, with some flexibility, now that we know what works for us. I am not an expert in finance, and our strategies were simple. Here are some practical things that helped us reach our debt free status.
We plan how we will spend every dollar before it is spent. This is Financial Planning 101 kind of stuff. And it’s not just for people who don’t have many dollars to spend. I promise. It’s for everyone. A budget is simply a plan of action. Every month is slightly different, but we have a definitive plan for each paycheck. And, it’s fun to get to refill each category with money. We save towards vacations and Christmas every single month. I get money for clothes. I get money just for coffee, friends! I get money to take the kids to do fun summer things. And, I can spend money on these things knowing that I haven’t spend the money that should have gone towards insurance or the electric bill. We plan ahead.
We don’t go shopping. I used to go shopping just for fun. I would roam through Target or my favorite stores in the mall just to see what I could find. I would buy things I didn’t need just because I could. But stores are set up to make you spend money. Companies hire marketing experts to make sure that you WANT to spend money in their stores. So, unless I need something specific, I don’t shop. This was a hard adjustment for me, but it’s been a good one.
We don’t rob Peter to pay Paul. No stealing from other budget categories. This is hard. Here’s my problem. I am a bargain hunter. And when I find something that’s a deal, I want it. Here’s the other problem. I always have money. I just don’t always have money for the things I find. For example, if I spend all of my daughter’s money for the month, and I happen to run across a pair of precious little sandals for a good price, I am not going to take money from my son’s envelope (or from the grocery money) to buy them. I will admit to spending my personal spending money on her (because that’s allowed), but no buying myself new lip gloss with the money set aside for doctor visits.
We buy used. During this five-year journey, we had two kids. I am amazed at how much money you can save by buying kids stuff used. I think most parents have figured this out. We have also purchased a new-to-us vehicle. We bought an older, low-mileage minivan, and we were able to pay cash. We buy new when it makes sense, but we have no issues buying good quality used items.
We do use our credit card. Please don’t tell Dave Ramsey. But we do, on occasion, use our credit cards when we’re making a big purchase and need to move money from savings or want to keep something a surprise. Buying an anniversary gift from my husband’s favorite store with our debit card wouldn’t be a very good surprise, as he regularly checks our online bank statements. The one rule here is that we don’t put things on the card that we don’t have the cash for. If I only have $50 in the gifts category, I can’t spend $65. This is something we haven’t perfected, but this is the goal. Also, we never carry a balance on the card. That’s the main point here. I wouldn’t do this if my husband weren’t good about making the payments, because I am a complete payment-making failure. If something isn’t setup to auto-pay, it’s not getting paid by me. I will not remember.
For us, being debt free is not the end goal. Our hope is to continue to save and invest for our future and our kids’ education, but also to be generous to others. We want to model this spirit of generosity and financial responsibility for our kids, so they will never have to go through the work of digging out of debt. For us, it was a weight that we did not want to carry, and it’s such a huge relief that it’s gone!
Have you been successful at paying off debt? What worked for you?