In April, I updated you all on how we took a financial class called Financial Peace University and it changed our world. We took a month to get our emergency fund of $1,000 in place and we have spent the last 10 months focusing on paying off debt. Here's an update on how we are doing.
This post is super vulnerable about our finances because I want it to be able to help people who are in similar situations and want to get their finances in order. I don't want to wait until the mess is cleaned up to share with you the numbers. I want to share it with you now, while life is still messy.
In December 2016, we were sitting in our car on a rainy day. And I was crying my eyes out. I had checked the bank account and we had no money. Literally. We had $0 in checking and $13 in savings. My stomach hurt. My eyes were puffy. I was tired of making money just to turn around and wonder at the end of the month where that paycheck had gone.
I was tired of fighting over money with Brandon. He was tired of fighting with me. It was a constant struggle. We were using credit cards to buy things whenever we ran out of cash. We weren't bad people. We weren't even poor people. We were just clueless on how to manage our money together.
This doesn't even begin to cover the fact that we were in debt. LOTS of it. Between the two of us, we had 4 credit cards and 15 different student loans. We started this process in $135,710 of debt and $13 in our savings account. If you just almost threw up, yeah, welcome to my world.
If you're wondering how we ended up with that much debt, we both started using credit cards when we were 18 and had no idea what we were doing. We both went to SUPER expensive out-of-state schools and took our sweet time doing so. In college, we both changed majors a ton, extending the amount of loans we took out. Even when I switched to a cheaper in-state school, the loans still racked up.
So when we heard about a financial class being offered at our church, we knew we needed to go. The 9 week course was taught via video by Dave Ramsey and covered everything from savings, debt, credit cards, investments, insurance, budgeting and buying a house. It changed me. I walked out after each class feeling ON FIRE about managing our finances well.
For the first time in our lives, Brandon and I weren't fighting about money at all. In fact, we love talking about money! We look forward to doing the budget now. We listen to The Dave Ramsey Show on our podcast app and are continually encouraged to KEEP GOING.
I'm going to be honest. Going through this class and following Dave's advice isn't easy. It isn't always fun. Dave suggests living lower than your means to pay off debt. Like REALLY live below your means. So that's what we've been doing for the past 10 months. Paying off debt is the hardest and most rewarding goal I have ever put in front of me. I am SO incredibly proud of us for sticking with a plan and straight up kicking butt.
I am even more grateful for the people who have supported us along the way. I am so grateful to God for blessing us this year with more than we could ever have imagined. Paying off debt and living with less has taught me to be a more grateful person.
**If you are a person with no debt, this is your chance to pat yourself on your back, jump up and down and thank God for how blessed you are! Also, now is a great time to cut up any credit cards you have and SWEAR to me that you'll NEVER get into debt **
So here's a breakdown of how our year went, financially:
- We were able to pay off ALL of our credit cards! We are officially credit card free!
- By the time I am writing this, we are projected to pay off an $11,000+ student loan the last week of December! AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!
- We have successfully created and stuck to a budget every single month this year!
- This is the first year that we will be paying COLD HARD CASH for Christmas gifts and festivities as we have been saving in a sinking fund all year long!
- We have paid cash for almost EVERYTHING we have bought this year.
- We started this year with $135,710 of debt. Our Year To Date Total Debt Paid is projected to be $22,322. That's with me being unemployed for 4 months. Our best month, we paid $5,5,273 on debt. On our worst month, we paid $620. And that's with both of us working in the education field where you don't make much.
We are blessed.
- We were blessed with not ONE, but TWO, new (to us) cars. We had been saving for new cars and we able to redirect that money to debt. Thank God that we both have never known a car payment and after this, we both refuse to ever lease a car.
So why am I sharing all of the gory details with you? Because I want someone who is in debt and feels hopeless to read this and know that if someone like us can keep our heads down and do this, then you can too.