So I’d like to tell you how the Debt Snowball changed my life, but before I show you my results, here’s a background of what it took for me to understand an area in my life that I didn’t have a real grasp on until my late twenties.
A few years ago I read a book called “Rich Dad, Poor Dad” by Robert Kiyosaki. It was a great read and I literally finished it in less than two days. I learned about the difference between assets and liabilities. Something that I had no clue about. After reading that book I was introduced to another book called, “Why We Want You To Be Rich, Two Men One Message” by Donald Trump and Robert Kiyosaki (a collaboration between the two of them) which was another great short read for me. At this point, I was hooked and I started playing the Cash Flow game. You may be familiar with it. It was because of that game I started to think about investing in real estate. Thus, began my journey to get out of the rat race for real.
Dave Ramsey and My Total Money Makeover
I was reading Yahoo Finance one day in which Robert Kiyosaki was a contributor. I was reading through the comments when someone commented, “Forget this guy, you need to get to know Dave Ramsey!” So I Googled his name and I found his website and subsequently his book called “The Total Money Makeover”. I made a trip to the local Barnes & Noble bookstore and read the book. Needless to say I was hooked. After finishing that book I immediately ordered his program, Financial Peace University (FPU). As soon as I got it in the mail I began to devour the content. Since February 2008, I have followed Dave’s principles in FPU. Now I haven’t gone into “gazelle intensity” as Dave would say, but I continued to keep track of where my money went through budgeting.
Over time, I was able to cash flow my wedding and not have to walk away with some massive debt once it was all over. I’ve also been able to buy two cars with cash (something that I could have never done before). To be honest, before Dave Ramsey, I used to live paycheck to paycheck. I was glad to just be able to make it to next payday.
Marriage And Money
When I got married, I had to do some major adjusting to how I managed my finances. My new wife was now a part of my financial picture. First, my wife and I decided to have one account that we have joint access to. Most people don’t do this. Yes, a hard concept for many to grasp, but it works for us. My wife and I went through FPU and it is one of the things that has made our marriage successful in the area of finance. I am the “nerd” and she is the “free spirit”. Since I get paid every 1st and 15th of the month, I do the budget and we later discuss together where we can make adjustments. In the beginning, she basically reminded me that there are things we need to budget for that I may have forgotten or had not thought about. For example, the grocery budget. I chuckle because she had always said that she could never understand how I ate as a bachelor due to what little budget I put aside for groceries. At the time, I was single and I rarely cooked. There was just no need for groceries.
The Debt Snowball
Fast forward to learning and implementing Dave Ramsey’s “Debt Snowball.” If you are not familiar with this concept I highly suggest you check out Dave Ramsey and his 7 baby steps (you can Google it). The particular step that my wife and I committed to was Baby Step 2 which is the Debt Snowball. When you go through FPU Dave mentioned you will be begin the process of telling your money what to do instead of wondering where it all went. By implementing the principles, I’ve been able to snowball most of the huge consumer debts I had accumulated over the years as well as one in particular that my wife had brought into our marriage. Remember when I said we are now one? Well, that was a big one.
It was my wife’s student loan and I’m happy to report that we paid it off years earlier than if we were just paying the minimum owed. We averaged paying about $1,000 a month in just about a year. When we finally paid this loan off, my wife and I felt such a big relief that we didn’t have this bill to pay for anymore. It goes to show that you need to be up front and honest with your finances and believe that YOU can do this! If you are struggling with your personal finances, there are tools available to you that can help. Trust me, I know how it feels to have big debt staring you in the face. It just takes you saying to yourself that you’ve had enough and that you are willing to take massive action.
The picture below is the last debt that we paid off together. My wife and I didn’t make anything extra or take on an extra job. We did this with the income we were already making. This goes to show you the power of a budget and what it takes when you and your spouse can be in partnership about finances. What are your thoughts on this subject? Comment below or connect with me on Social Media. I’d love to show you how you can too make progress in reducing your debt with the current income you are making!