About 20 years ago I was pretty “Normal”. I was working and earning an income that was a little less than my outgo. After living like this for a number of years I woke up to about $31,000 in credit card debt. Not really knowing any better I filed Chapter 13 bankruptcy and spent the next 5 Ã’Ò½ years having my checks garnished to pay off the bankruptcy. During this time I halfheartedly tried to get my financial life sorted out. I will be honest and say it took me about three years before I really got serious about it.. I soon found myself attempting to write monthly budgets and I even opened a savings account. From there, I began really working my plan.
About this time I met a girl (Ann) and our relationship started progressing. About the time we had “the talk”, you know the one that says we are on the same page and the relationship is going somewhere, I explained to her my new found philosophy on personal finance and explained that debt was a deal breaker for me. I told her about this guy on the radio Dave Ramsey who’s advice I was following and her first response when I asked her what she thought of him was “Wow a personal finance guy who is also a Christian, what’s not to like about that” and she soon put a plan together. At this point I was debt free with my bankruptcy discharged and had a 3-6 months worth of expenses saved in an emergency fund. She started working the plan and got a few of her small debts paid off. When it came time for us to get married she was well into eliminating her debt.
Now we had a great plan after we got married. We were both making good incomes and we made the decision to live on one income and use the other to work on the remaining debt. We entered married life with about $75,000 in debt. That included $36,000 in student loans, about $6,000 on a “Fleeced “car, and various other personal debts. We made great progress in the first four months sending out checks and paying off our debt. We were diligent in the way we wrote our monthly budgets and used the envelope system to help keep our other expenses in line. Around month 4 of being married we hit a little snag when we found out we were pregnant. We kicked everything into high gear and managed to pay off all debt besides the student loan as well as build up a separate emergency fund that would cover the max out of pocket expense for mom and baby in case something went wrong. We also had to furnish a nursery and we paid cash for everything. Once the baby and mom came and everyone was OK we took some of the extra in the savings that luckily we didn’t need and started paying off debt again. Our plan from the beginning was to be a stay at home family and we were fortunate enough for Ann to be able to finish up her work from home and transition the office she was managing to her replacement while still bringing in a little income. Once that was done we continued to be intense but now we only had half the income we used to have to work with. During this time we also paid cash for chemo treatments for our dog that was diagnosed with Lymphoma. It took us a total of about 2 1/2 years to pay off the $75,000 in debt, pay cash for our baby and all related expenses, and cash for chemo for the dog.
We were able to accomplish this by starting every month with a plan and communicating when things came up and the plan had to change. The most important thing to remember is that money is finite. You need to tell your money where to go before you get it. If you need to increase one area of your budget do to poor planning or unexpected expenses you need to take money from somewhere else in your life. After about three months of serious budgeting you can really tell what your priorities were and what you need to change to get to where you want to go.The bottom line we were able to do it, when are you going to take control and get your life back?