Financial Peace, as Dave Ramsey says, are “two words that normally don’t go together. Like airline and service.” (#classic!) It’s not normal, that’s for sure, but it is definitely attainable. How? We’ll get into that. But what exactly is financial freedom? To me, financial freedom is not being enslaved by debt, having the ability to give generously and to live life to the fullest according to my family’s values without financial restraint. One of my favorite quotes is “your money has no opportunity for the future if it always has an obligation to the past.” Isn’t that the truth as you write a $500 check to student loans every month….
My parents had warned me for years that I would be responsible for paying for my college. So, when I was deciding where I wanted to go to college, I knew that I wanted to go to a small private Christian school so that I could be immersed in an environment that would push me to grow in my relationship with Christ as well as my education. Well, private school is expensive. I thought that I was being smart getting my bachelor’s degree in only three years – I would be saving money after all, right?! But I actually spent way more than I had to on college because I don’t think at 18 years old, I really understood just how much money it was actually costing me. You just sign the loan papers and worry about it later.
Kind of like when after you graduate and get a “big girl job” that you “deserve” a newer car! That was my thinking. And now here I am $14k+ in car debt.
Don’t get me wrong – I wouldn’t trade my experience at Indiana Wesleyan for the world and I absolutely love my car! I just wish I took the ACT more seriously, applied for thousands of scholarships and saved up before I made such major purchases.
Since I graduated college in April of 2015, I have made some seriously huge payments trying to dig my way out of debt. I just hated the feeling of owning money to someone and wanted it over with as soon as possible. But even with all of that progress, here we sit about $68,000 in debt (thankfully Matt didn’t have very much debt to add when we got married) and I am so tired of it.
The solution? Dave Ramsey’s Financial Peace University
Dave Ramsey is a financial expert who has helped literally millions of people get out of debt over the last 25 years. He created a 9-week class where you meet once a week to learn how to get out of debt and get your money working for you. Matt and I are starting the class this Sunday and I am absolutely pumped. I’ve been listening to his podcasts for about a year now and I am so on fire and ready to get this plan rolling. So here’s the basic plan:
- Baby Step 1: Starter Emergency Fund of $1,000
- Baby Step 2: Snowball all non-mortgage debt
- Baby Step 3: Fully Funded Emergency Fund of 3 to 6 Month of Expenses
- Baby Step 4: Start Investing Again – 15% of Household Income into Retirement
- Baby Step 5: Save For Kid’s College
- Baby Step 6: Pay Off Home
- Baby Step 7: Build Wealth and Give!
The point of the plan is to help teach you how to live on a budget and to live within your means. Yes you need a budget every single month! Dave’s daughter Rachel likes to point out that the budget should give you freedom to spend. YOU are telling your money where it’s going before you even get the paycheck. Isn’t there so much freedom in that?
Matt and I use the budgeting app that Ramsey Solution developed called Every Dollar and love it! It’s super easy to use, FREE, and is right on your phone to know how much money is left in each category.
I’m determined to get out of debt and live a debt free life. I truly believe that that is being a good steward of God’s resources that He has blessed me with. I’ll be sharing tips and tricks we discover as we go through this journey, so I pray that it helps someone in a big way! Are you on your own debt free journey? Share with me how your experience has been so far!
I know this will not be easy, but boy will it be worth it.