Dave Ramsey

 

Dave Says - February 8, 2016

What is your opinion of churches encouraging members to do e-giving with credit cards and debit cards?

Engineer in the Morning, Trash Man at Night

I'm not special.

I don't come from a wealthy family, I didn't win the lottery, and I don't have a 6-figure income, nor am I a genius.

Living Like Everyone Else
The initial point of my debt-free journey occurred a few weeks after my 26th birthday on a February Sunday in 2015. Up to this point, I was extremely comfortable with my life and thought that I was financially secure. I graduated from Oregon State in 2012 with an engineering degree and had a job already lined up at graduation making $56,000/year which is something that was unfathomable to a broke college student like I was. Fast forward to 2015 and here I was saddled with student loan and credit card payments and to my great chagrin, a car payment because I felt that I could "afford" my dream car (a Honda S2000). I also got wrapped up in a bad video game addiction that had been haunting me all my life since I got a Nintendo Gameboy. My life was falling into a rut where I was blinded and falling into a deep, deep hole. I would go to work, go home, play video games, pay bills, sleep, and repeat the process. The video game addiction was starting to interfere with my personal life where I would spend my weekdays when I got off work and more than 20+ hours on the weekends playing games. It also started to seep into my work performance and that's when I knew that things were starting to get bad.

Dave Ramsey and a Cold Turkey
I've always been a fan of personal finance with my interest starting at a young age where I asked my parents at 16 to help me open a Roth IRA so I could see what it was like to purchase stocks and mutual funds. My coworker introduced me to podcasts and I downloaded a few episodes of the Dave Ramsey Show on my phone but didn't listen to them - I was too addicted to the Serial podcast! Little did I know, the planets were already aligning to open the gate for my Debt-Free journey.

On a Sunday night in early February after a 16 hour bender of video games (DotA being my drug of choice) I stumbled like a zombie back to my room that I share with Alexis (daughter) and Tiffany (girlfriend) - we sleep on a bunk bed :D As I climbed the short ladder to the top bunk, Alexis' butterfly night light illuminated both of their faces perfectly and flashed an epiphany in my mind. I heard a voice asking me if I loved my video games more than my family and why I couldn't see the unintentional pain that I was causing them. Rather than spending time with them and putting them to sleep, I was in the other room wasting my life away in an unforgiving virtual realm. My inner eye was finally opened to the potential repercussions of my current path: losing my job, alienating my family, destroying my other relationships, and extinguishing any potential I had in this life. As I lay in bed, I made a vow that I would quit playing video games and I would refocus my energy to better my life. As corny as it sounds, I shook my own hand because I've always believed that a man is only as good as his word and that was a principle that I lived on.

The following morning I deleted DotA from my laptop along with the back-up file I had in my external hard drive. I know I needed something else to latch on now that I didn't have video games preoccupying my time. That same morning on my drive to work I decided to listen to my downloaded Dave Ramsey episodes and the rest is history...

Battle of the 5 Debts
I put pen to paper and listed my debts from smallest to largest to visualize how big and mean this monster was that I had to vanquish. The evil horde consisted of five demonic debts:
1. Phone Bill - $432 (I bought my mom a new iPhone for Mother's day on a payment plan)
2. Credit Card - $1,645 (Remaining debt of my vacation to Florida TWO years prior)
3. Student Loans - $15,034 (I received my BS from Oregon State in Construction Engineering Management)
4. Car Loan - $18,968 (My beautiful Grace, a 2005 Honda S2000 with 45k miles)
5. Parent PLUS Loans - $44,052 (My parents sacrificed so much to put me through college therefore I wanted to repay them by taking over the loan payments)

Total = $80,131

The most important thing I learned about getting debt free is that it's not your weekend 5k fun run, it is Forrest Gump running across the country!! It requires 100% commitment from you physically, mentally, and spiritually - you will not succeed unless you get "gazelle-intense" and take it seriously.

Increasing Income
I knew I had to increase my income if I wanted to tackle this debt and Dave talks about getting a part-time job with pizza delivery being his go-to job recommendation. I didn't think being a pizza delivery boy would work for me because A) I had a full-time job and the hours could potentially conflict B) my hours would vary from week to week. Therefore I searched for part-time jobs on Craigslist and found a perfect one! I was going to be a garbage man!

ZipEco (formerly Ecommunity)
The job was from 8-11 PM every day of the week except for Tuesday and Friday nights which basically meant that I would have to skew my work/life balance to the extreme. The other dagger was that it was in Vancouver, WA therefore I had a 40 minute commute each way to get to work.

The apartment complex I was servicing consisted of 188 units and the tenants would leave their trash and recyclables in containers in front of their doors. My job was to carry these items from the door step to a centralized area that included a trash compactor and recycling bins. It was a physically demanding job but I was not scared of doing manual labor because I've spent many summers doing those types of jobs. Another odd thing was I never complained or felt angry about doing this job because I was doing the job for a greater purpose. I was "living like no one else so that later I could live like no one else." That was my life for 11 months, I would work at my day job as an engineer till 4:30 PM, go home to eat and usually take a quick nap, head off to my part-time trash job at 7:00 PM, get home at 11 PM and then wake up at 6:00 AM to lather, rinse, and repeat. Adding this part-time job helped me reduce my journey by 9 months!

Additional Income
I did various things to increase my income as much as possible including:
??? Driving for Uber
??? Selling Plasma
??? Selling everything I could on Craigslist
??? Liquidating my stocks ($10,000) and decreasing my savings account from $15,000 to $1,000
??? Taking out all the money that I had saved for Alexis' college fund ($5,500)
??? Selling all my silver at a 60% loss (never buying commodities as an investment again!)
??? Eliminated my CarMax warranty (I didn't even know you could do this until Dave mentioned it on his radio show)

Lowering Expenses
The greatest expense reducer I had was being able to live with my parents - if you have this option available then I highly suggest moving in with your parents to help boost your debt-free journey. Of course, make sure everyone is on the same page with a goal in mind of when you're going to move out and what expenses you'll be helping with. I don't pay rent but I do pay utilities to aid my parents in their household expenses. Living with my parents has been a tremendous boost to me getting debt-free because they gave me support and have helped me cover so many typical expenses that I don't have to pay for like laundry and groceries. I could not have done this without my parents.

Bringing Lunch from Home
I started to bring my own lunch instead of going to fast-food restaurants. Typically, I was spending around $6 for lunch every day and eating non-healthy foods - the simple math shows that I was spending $30/week or $1,560/year on eating out at lunch. Bringing my own food allowed me to eat healthier and eliminated a big expense that I never really thought about.

Stopping 401(k) Contribution
This cut was probably the moment I knew that I was fully committed to my Debt-Free journey. I loved investing in my 401(k) but I was diluting my goal by spending potential debt money into an investment. I was basically borrowing debt to be able to invest and that was not a smart move. I did a calculation on what I was giving up from my company match by not investing in the 401(k) and it was around $1,500 a year but to get the match I was also "sacrificing" $3,000 of income. I decided that I was diving into this thing 1,000% and changed my contribution to 0% and didn't look back! Of course, when I get debt-free I will bump my contributions back to 15% as taught in Baby Step 4.

I'M DEBT FREE!!!!!!!!!!!!
This has been one of the hardest things I've ever done in my life. It required me to be fully committed to a goal that demanded my body, my mind, my relationships, and every inch of my life. I had to do a complete paradigm shift of my thoughts about money and how I viewed debt. I literally lived like no one else and now I can finally live like no one else. I sacrificed and took every principle Dave offered to help me through this journey. I was able to pay off my $80,000 of debt faster than I imagined and finished in 11 months! It's really amazing how the universe starts to help you when you're on this journey. I had money coming in from unexpected places and opportunities opened up that allowed me to get additional income. Break the chains that debt has on you because the borrower is truly a slave to the lender! I hope my story gives you inspiration to start your own debt-free journey because the view is magnificent from the top and when you don't owe a single penny to anyone!!

I sacrificed a year of my life for an eternity of freedom and I would make the exchange again EVERY TIME.

Paradigm shift!

In September of '14 I took the giant leap/and signed up for FPU. My husband Bill and I have been married for 13 years and have 2 amazing sons. He's a police office and I'm a stay at home mom. I signed up to take FPU when I was absolutely at my wits end. We had move out of DC to a small country town with a house that cost half as much and we still couldn't make ends meet. I knew we were doing something wrong. I had no idea how our lives would change in such a short time.
We started out in serious debt. Approximately $46,000 in debt and a mortgage. My husband was stressed out of his mind with the finances and I couldn't watch him drive 180 miles each day and still seem miserable. I knew there had to be a way to make it all work. I looked around for something detailing a budget and came across FPU. Neither of our parents had taught us anything about budgeting. (Not their fault they were raised to not discuss money.) As a result of that we were the blind leading the blind.
The first class was a little intimidating as we are not members of the church we took the class in ( actually we are Jewish and the group was incredibly welcoming). But the minute the lesson started it was like our eyes finally opened. We finally had a clue!
I'm not going to lie the first quick budget almost made me lose my mind. I even had one of the class leaders help me and I still felt like a fish out of water. After several classes we got the hang of how a budget worked and in October we cut up our credit card and haven't looked back.
We completed the course and in just 13 months have paid off all our debt as of today! My husband and I have absolutely no stress about if we can afford life. We still do our budgets together each month and usually joke all the way through it. We have even gotten to the point we are able to send abut 10% to charity which is a first EVER. Heck we are also a month ahead on our bills. I'm not going to say we never screw up. We have plenty but because of our framework we got through it without a meltdown.
We have started teaching our sons about how important budgeting is and how to save, give and spend responsibly.
We are now saving for our full emergency fund and then on to tackle the house.
When I say this has changed everything, it really has. I recommend it to everyone I know because if we can do it, a couple of misfits anyone can!
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