We're Debt Free!

WE'RE DEBT FREE!

...Welcome to the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice...

Our goal has been, for about a year-and-a-half, to pay off all of our debts by the end of 2012. We did it!  WE'RE DEBT FREE! Great job, Husband, and thanks for all of your help! When we got married, I had a loan from when I studied abroad in Germany, and I knew that Zak had some student loans, and a loan on Beefy. He told me, but I don't think I realized how many thousands of dollars of debt we had until we consciously calculated every loan. Those, along with the loan we took out to pay for one of us so we could both go to Switzerland added up to over $26,000.00. That is ridiculous.

Growing up, I tried to be frugal, but I never made or stuck to a budget. I'd put money in my savings account, but use it whenever I needed it, such as to pay tuition. I got my first car, which was as old as me, from my generous uncle for an extremely good price. When that died, I was already in college, and didn't have money saved up for a new car, so I took out a loan for $1,800. I paid it off in about five months, making larger than minimum payments. I was relieved to get the title in my name and to not worry about the payments, but not upset enough to avoid loans in the future.

Because Dad's job is associated with the university, my student fees were 50% off. That meant that instead of paying $2,500-$3,000 per semester like most in-state students, I paid between $1,200-$2,000 a semester. Yes, that is a fabulous cost for a university education, especially without the scholarship I lost early on when I failed calculus and practically failed biology. I worked full-time as as a life skills instructor/assistant manager before my mission, and didn't have to take out any more student loans, outside of my two-month stay in Germany. That loan started at $3,500, but by the time I paid it off in March, I know I'd spent so much more on interest. I paid $1,000 before my mission, and then $1,000 shortly after. When I met and married Zak, it was close to $2,000 or more owed.

He drove an older red Beefy on our first date, and before our second date, he had traded it in at a local dealership for our newer black Beefy. He got a discount for the trade-in, but was charged more than necessary for newer Beefy.

Reading Financial Peace Revisited at the cabin

Mom and Dad Porter gave us Dave Ramsey's Financial Peace Revisited book, which we read together last July at the cabin. We saved up our $1,000 emergency fund, and then started on our debt snowball. You're supposed to pay off the smallest debts first, and then pay off the biggest one at the end, compounding the money from your paid-off loans into the one you're currently destroying. We chose to pay off Beefy first, which was actually our largest loan, and then attack our Switzerland trip and other student loans. Beefy has driven much better since we paid  him off.

Dave also insists that you have to get mad. You have to get so mad that you never want to take out another loan. You don't need to build credit, because it only gets you more debt. Even a mortgage can be managed without credit by manual underwriting, where they make sure you have a steady job, have been paying rent on time, and can pay for it. We still have a few steps before saving for a house, including increasing our emergency fund to cover 3-6 months of expenses, but we're excited to make it to this point. Thank you, Dave and Sharon Ramsey.

We made our last payment to Fedloan today for $1,026.70, and I'm glad to kick them our of our home. I've looked forward to budgeting twice a month whenever Zak gets paid, just so I can see the progress. We still can't go overboard yet, but buying Christmas presents, work clothes for Zak, and a pair of jeans for me will be a lot of fun. Our loans totaled over $26,000 when we first counted, but I don't know how much we paid in interest for all of that. Not anymore; no more financial slavery. Now the interest will be working for us. Dave has been a regular in our home and on our trips with his free radio podcast, proclaiming the path to financial peace with a little bit of "Stupid!" and humor along the way.

We reached our goal to be done with loans by the end of the year, and we did it! WE'RE DEBT FREE!

...Live like no one else today, so you can live like no one else tomorrow...