WE'RE DEBT FREE!!!!!!!!!!!!!!

My wife and I are DEBT FREE!!!!! We have been working the Dave Ramsey plan for a few years now and sent off the final payment on my truck today. It is our plan to NEVER borrow money again.

I spent most of my life just assuming that you had to have credit and good credit to get by in this world. Took a while, but my wife and I finally figured out it was a lie. And it was a lie we told ourselves. We wanted new cars, so we got car loans and had our new cars. We wanted a week in Florida on vacation, so we took a couple of credit cards to the beach.

And that is how the lie works for the whole world. If you were to save your money and pay cash for a car, you actually pay less for the car, but you have to wait a while for it. I did not want to wait. I wanted what I wanted when I wanted it and was willing to pay a finance charge for it.

I was childish and selfish and short-sighted. And there is a whole industry in this country that flourishes in catering to a childish, selfish, short-sighted public. One of the things I read in one of Ramsey's books is that there is a reason why most of the tallest buildings in big cities have the names of banks on them. For your savings account they will pay you almost nothing in interest. Fall behind on one of their credit cards and they will charge you 24% interest. And we fall for it because we get our bright and shiny toys.

But my wife and I got frustrated because we knew we made darn good money. Really good money. Way above the national average as a family money. And we had nothing to show for it.

Well, that is not entirely true. We had a few student loans that followed us around for a few years. We had a great relationship with the folks at American Express who were always willing to up our limit since we were always great about paying them off. Looking back at AMEX, I laugh at the idea of them giving us more and more credit like a little kid blowing up a balloon waiting for the moment when the balloon just can't hold any more air.

But back to our frustrations. For a few months, Priscilla would balance the check book and we would look at the relatively small number of actual bills we had and the money we should have had left over that we had somehow wasted. I won't tell you how much money it was out of embarrassment but it was not a small number. And we always intended to have do better the next month and then were surprised when we had not done better.

Then I found Ramsey's book, The Total Money Makeover. And before you think I was out there trying to find a way to get my family out of debt, I wasn't. I was at an airport and I needed a book to make the airplane fly faster and it looked like a book I could finish on a round trip. And I read it all that day. And it made sense.

And I gave it to my wife. And it made sense to her too. We prayed about it. Talked about it. And then decided to do it. Priscilla gets much more credit for this than me. She has always handled the money in our family from a tracking stand point. I handled a whole bunch of it when it came to spending it. She has the Quicken books all set up and can tell you what we have spent and what we have spent it on since the day we were married. And she did a great job of setting up our budget that made this particular post possible.

But back to the Ramsey book. This is not a get rich quick scheme. You don't have to buy or invest or sacrifice a live chicken. All you have to do is be smart with the money you have. If you do, Priscilla and I can tell you, life is better on the other side of debt.

How do you do it? Go get the TMM and read from the expert. Its a great read and a fast read written for those of us who hate numbers and accounting. Getting out of debt is less about math and more about attitude - which might surprise some of you as much as it did me.

With that in mind, each chapter of the book features a testimonial from someone who has worked the plan to success so you will KNOW that it is possible. Some of the people in these examples made more money than Priscilla and me (like 3 or 4 or 5 times more) but also had WAY more debt than us too. Some of the people in the examples made less money as a family than I do as an individual - and they are debt free, with their kids' college funds fully in place, a paid for house, and a solid retirement plan in place.

Here are the basics:

1. Write a budget at the beginning of the month and only spend what is on the budget (and don't forget your tithes).
2. Make sure to make all your minimum payments and take the extra money you found when you wrote up your budget (and you will find extra money) save up a small emergency fund of $1000.00 to cover things that might come up
3. List all debts from smallest to largest regardless of interest rates - take the extra money you found when you wrote out your budget and apply it to the smallest debt until it is gone - then take that money plus the minimum payment you were making on the debt you just cleared and put it all against the next debt on the list - repeat until debt free
4. Now save up your big emergency fund - 3 to 6 months of expenses - this is to cover you for the big things in life that come out of no where - how many of you know someone in this economy who lost a job they had held for years?
5. Start the college funds while also
6. Fully funding your retirement (15% of your income here) while also
7. Paying off the house early while also
8. Supporting the charities and ministries that God puts on your heart

Folks, go read the book. It can change your life. Priscilla and I will have our big emergency fund done over the next 4-5 months. We aren't going to need the college funds so we are going to be able to save up enough to pay cash for a house within the next 5 years and never have a mortgage. And never go into debt again.

If you think it ain't possible, read the book. If you think you have to finance a car, read the book. If you think its smart to have credit cards "just in case", read the book. If you think you can never retire, read the book. If you think you can't ever get out of debt, read the book. If you think you have no hope, read the Bible. If you think your finances are hopeless, read The Total Money Makeover by Dave Ramsey.