Well, we just closed our first poll concerning New Year’s Resolutions. We thought it would be appropriate to take the opportunity to give tips and tricks and some of our experiences on each of the options that we selected. We probably selected each of the available options because partly they are goals we have each year. And, it appears our top resolution is the same as many of yours – Get Out of Debt!!
Thrifty Cas and I truly know the meaning of Proverbs 22:7 where it states “the borrower is servant to the lender”. When we started our marriage over 10 years ago, we thought we needed to have everything our parents had. Of course, when we realized that meant a mortgage, two car payments, and other loans to pay for furniture and trips, we started to feel the servanthood to our creditors.
It was soon after the dread started to set in (not seeing an end in sight!!) that I heard a talk-radio host talking about something called the debt-snowball, referring to a journey to financial peace, and talking with people that knew many of the problems that Thrifty Cas and I were facing! Yes, many of your already know who I am referring to, but this host was none other than Dave Ramsey!!
We bought his book “The Total Money Makeover” ($15.74 at Amazon) and devoured it! What was great about this book is that his advice went against some of the things we had tried before. I’ll list his first couple of steps and explain what I mean.
- Get $1,000 to start your emergency fund – This totally went against the grain of our thinking because we always thought that when paying off debt, put all your money towards debt and go back to debt if you have an emergency. I can personally say that the first time we had a car repair (ironically a month after we first got our $1,000 emergency fund) the freedom to pay out of savings was immense!! Not only that, but it starts to train you that we shouldn’t rely on the slavery of debt!
- Pay off all debt using the debt snowball – This one is crucial and we hope to accomplish by March 2010 (excluding the house…that’s step 6)!! You list your debts from smallest to largest and throw all you have at the first; once that is paid off, you roll all your spare cash into the second debt, and so on!! We always thought it would be wisest to pay off the largest interest rate first, but the rationale for the smallest debt first is to build the momentum! You pay off the first debts quickly and start using those payments against the larger debts – what an amazing thing to watch!!
You can read about all the other baby steps HERE!!
Something that Thrifty Cas and I never did was attend any of the classes offered which teaches these principles. If you check with a local church you might find the course. Right now Dave Ramsey is offering the Financial Peace University Lifetime Membership for only $119. Click HERE or on the image below for more details (with FREE shipping)!!
Now, don’t get me wrong, this isn’t a post trying to push Dave Ramsey. Its just a post that we wanted to share on one method on how we became excited (and nearly successful!) at getting out of debt! We believe we need to seek to provide an inheritance for our children and children’s children (Prov 13:22) and that we need to be good stewards of the gifts that God has given us. These are the reasons why we work so hard to be The Thrifty Couple, so that we can pass that on to our children and our children’s children.
We pray that you can be successful in your resolution to get out of debt this year (or at least get closer) and finish with Dave Ramsey’s closing statement of each show: The only way to true financial peace is to walk with the Prince of Peace, Jesus Christ.
* Keep checking daily as we reveal results and tips from our Thrifty Polls New Years Resolutions!