We started to clean up our finances some 40 months ago. We had hit rock bottom and I realized this over vacation planning for our summer family trip in spring of 2010. We had no cash savings and had basically maxed out four credit cards and a line of credit. We were unable to borrow any more money, so I broke the news to the family that there would be no trip that summer, instead we would stay local and enjoy our first staycation. This was probably the best thing that ever happened to us, because if we didn’t hit bottom we would have continued to live beyond our means. We enjoyed our week of day trips and made the best of it. After that week we began our journey of paying off $109,000 in consumer debt. This is what I’ve learned about personal finance.
Personal Finance Blogs
I first hit the internet to begin researching information on how to get out of debt. I was hoping to find some secret that I had overlooked for years. There had to be some get out of debt fast scheme that after graduating high school with honors and picking up my B.A. in communications that someone failed to let me in on. One of the first personal finance blogs I came across was “Punch Debt in the Face” I read as many posts as I could that first night stumbling across this blog, from there it lead me to “Get Rich Slowly” and “Budgets are Sexy.” These blogs gave me so much information in the first few days of my research. It was very clear that there was no secret or special plan, just some simple common sense rules.
Moved on to Books
After reading as many personal finance blogs as I could, I moved on to books on the subject. One name that was very popular on the blogs was Dave Ramsey. I picked up his book the “The Total Money Makeover” at my local library and read it cover to cover in about 3 days. I felt very stupid after finishing the book. At 40 years old I realized I had really made bad decisions with money for most of my life. The principles for staying out of debt were right in front of me and I didn’t need to have a college degree or any special education for that matter to make better decisions.
I quickly got our budget together and began to apply the debt snowball technique to our outstanding debt. My wife and I reviewed the plan and agreed on it. It wasn’t just that easy; it took some time for my wife to fully come on board with the plan. I explained to her if we made the short term sacrifice, what it would mean for us long term. It would mean a lot of saying “No” to our children, family and friends for now, but eventually being able to say “Yes” to just about anything we wanted. The first year was tough, but we have managed to survive, so far paying off over $80,000 to date.
There are times when we want to go back to our old habits, but we keep the end goal in mind. Having $2k worth of surplus cash each month sure does sound appealing. That is one big motivator. We stay sharp by reading personal finance blogs, and listening to Dave Ramsey podcast. Hearing other people’s stories of debt repayment is totally motivating whether you like Ramsey or not. I started this blog as a form of motivation, in hopes that I could help someone else get on the right track with their money. I have given out many copies of Ramsey’s “The Total Money Makeover” I’ve lost track.
In the End
Personal finance is just that, personal. We all have our own story, that’s why there are so many different blogs with so many different points of view and great ideas on how to manage your money. The general concepts are universal, build a budget, live within your means, use a debt snowball, have an emergency fund, etc. You have to find those blogs that fit your style, share that common ground, find it interesting, make you laugh, etc. I hope that our story does some of that for one of you.