Friday, March 5, 2010

FPU: Dumbing Debt

If you are going to invest in any single Dave Ramsey's lesson, this would be the one. I didn't actually get to a chance to see the whole lesson, but I love Dave's energy. If you don't walk away from this feeling charged and asking a lot of good questions after this lesson, you must have watching it on mute.

Dave covers a whole list of money myths. I'll address some of these more in depth in another series, but for this purpose I'll highlight a couple that stood out for us.
* Car payments are a way of life... This is one that we used to believe. Now that we drive a fully paid for car, I'm so glad this isn't the case any more. I like my car so much more now than I ever have. I think it might actually be hard to get me give it up.
* The Home Equity Loan is good because of the tax deduction and is a substitute for an emergency fund. I really enjoy listening to Dave's rants on this topic. I used to think the deduction was a good thing, but you can get some good deductions through charitable giving. Hmmm... taxes or charity. That's an easy one.

So the real meat of the lesson - Steps to Dumping Debt!
1. Quit borrowing more money!!!!! Sounds simple, but if it was really that easy than none of us would even be thinking about this topic. Now is the time to start making a change.
2. You must save money.
$1000 emergency fund should be in place before attacking debt.
3. Prayer really works. I'm still learning this one, but I've watched so many people be touched by prayer that I'm starting to believe it.
4. Sell some thing. Take that back, sell a lot of things! This is a perfect excuse to simplify.
5. Part time job or overtime (temporarily). There is nothing wrong with working a job you don't like doing some thing people don't respect in order to get rid of debt. It's not a lifetime choice. It's a short term sacrifice.
6. Debt snowball. Use the debt snowball to attack debt and get rid of it.

I think that once you make the commitment to change, these steps are pretty easy. It takes a serious effort, though. You have to learn to HATE your debt! Attack it! Do what ever it takes to get it out of your house! It's not good enough to just say you want to be debt free. You have to be willing to do the work (possibly even literally).

Trust me. I didn't like my job while we were paying down debt. I worked long hours doing stuff that I didn't care for, but you do what you have to do. I would have gone out and worked at the grocery store if I needed to. Getting rid of the debt was really that important to us. Now that we're on the other side of the line, I am so glad we were willing to make that sacrifice (yes, Tim sacrificed too) for the short term in order to make the long term progress.

Have you taken steps to dump debt? What are the sacrifices you were willing to make?

1 comment:

Kara said...

We always thought we'd have a car payment and that we'd finish off our school loan playments in time to start paying on the kids ;-)

Nice to know that there ARE opportunities and that it doesn't have to be that way.

Thanks for this blog, Angie! I always find encouragement here to keep living like no one else!

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