John and his family are debt free after paying off over $65,000.00! How did they do it? Let’s find out.
Before I start tossing around the hard ball questions – can you give me a little background on yourself?
I am married to a wonderful woman who was born, thankfully, without a spending streak. She’s one of the most patient, encouraging, and frugal women I’ve ever met…and all of those became obvious after marrying her. I hit the spouse lottery with her. We have been blessed with three children: Jacob (6), Sarah (3) and Anna (1). I work as a HR manager at a large corporation and she works as a stay-at-home mom.
How did you first hear about Dave Ramsey?
I heard about him during a very difficult time in my life. My wife and I had moved to Ohio with work and ended up buying a house with rotten windows and a kitchen that was falling apart. $25k and almost a year later my manager started talking regularly about eliminating half of the department. We were far from family, $65k in debt from our home improvements, cars and student loans, and the stress mounted. I began having panic attacks and confided in a friend of mine in the company. She asked me if I had ever heard of this Dave guy and gave me a print out of the Seven Baby Steps. I read them and started that day down the path.
So how long were you doing the Baby Steps before you started to feel less panic about your personal finances?
I think it was after I paid off those stupid windows. I was so happy to have that payment in the rear view mirror. Once they were paid off I saw a path to paying off everything else within a year.
Was your wife immediately on board?
I guess my answer is yes and no. She was not completely on-board with all of Dave’s teachings, but she saw how much stress debt caused me so she was on-board with anything that would ease that anxiety. The one she had the hardest time with was Sallie Mae at 2.75% interest, but she never fought it. With her not being a big spender, her lack of buy-in on that front wasn’t a hindrance, it was just an area of light philosophical disagreement.
I bet your friend at work that pointed you towards the Baby Steps is proud of you! Does she know you’re debt free?
I called her when we left our house to drive to Financial Peace Plaza. I told her to be listening and she went ballistic. She was extremely proud of us and was excited that she was about to become a celebrity (her words, of course, and I let her have that moment of fame!). I mentioned her by name on the radio show and it made her day. I was happy to let her have the day when she gave me financial peace for a lifetime.
When did you and your family become debt free?
We paid off Sallie Mae, our last debt, on March 4th (a wonderful day to start a new way of living: “March Forth!!”) 2010.How much total debt did you pay off, how long did it take?
We paid off $65k in debt and funded our fully funded emergency fund in 25 months (we did the fully funded emergency fund alongside our final debt due to expected medical expenses that thankfully never materialized).
Along the way did you ever struggle? Any lapses in sanity?
We struggled slightly about halfway through. I had a major accident involving my garbage can and a bungee strap which threw a few unexpected medical bills our way (it’s OK to laugh). You never know where an emergency is going to come from so the emergency fund is essential to all of this. I tried to have a self-made lapse of insanity by leaving Sallie Mae on her regular payoff schedule, but my friends on the The Total Moneymaker message boards (John is BigRedWarEagle at TMMO) brought me back to earth. We took our 6-month emergency fund, reduced it to 3 months and threw money at the student loans and were done with them in one big lump sum payment. Thanks to Peacebug and Greenwoman from the boards for giving me that electronic tongue lashing!
What was your largest single debt?
Our largest single debt was my $13k of student loans that paid for graduate school and a small amount for undergraduate.
I bet that one felt good to get rid of?
I was so happy to be done with that because we shared the loans with our parents. Getting rid of them gave us much-needed peace around the dinner table. After paying them off we immediately started putting money towards our children’s’ college education. Lord willing they will never know the joy of getting Sallie Mae out of their lives.
What was your largest single debt?
Our largest single debt was my $13k of student loans that paid for graduate school and a small amount for undergraduate.
I bet that one felt good to get rid of?
I was so happy to be done with that because we shared the loans with our parents. Getting rid of them gave us much-needed peace around the dinner table. After paying them off we immediately started putting money towards our children’s’ college education. Lord willing they will never know the joy of getting Sallie Mae out of their lives.
What’s your favorite part about not having any payments?
My favorite part was completely unexpected. I was anticipating excitement, joy, peace, and a sense of filthy-richdom. Instead, what I still revel in is the feeling of completely walking away from a home project when it’s done. I never realized how much the projects followed me when I still owed on them! The first time I felt it was when I put up some extra insulation in my basement and was walking back up the stairs to our family room. Halfway up the stairs I literally started laughing. It was such an unexpected and freeing feeling. That feeling persists for vacations, projects, and dates out with my wife. It’s truly priceless.
How did you celebrate?
We drove to Nashville the very next day and did our debt-free scream from Dave’s lobby. On the way back home I stopped at an antique store and bought my wife the bench that she desperately wanted for our foyer. That was a nice feeling.
So did you get to meet Dave Ramsey? What was that like?
Frankly, it was surreal. He looks exactly like he does in all of the pictures I’ve seen and he sounded just like he does on the radio. It was difficult not to hug him and tell him that I had a man crush on him. I opted instead for the stock photo and handshake. It was worth every mile of the drive.
Did friends/family think you were crazy during this process?
Absolutely! Now most of them, and I do mean most of them, are somewhere in the middle of their own Total Money Makeover.
What has being debt free allowed you to do that you could not have otherwise done?
It allowed me to move closer to family and work without fear. I take bigger risks at work and work for the joy of it instead of feeling like I need a certain raise, promotion or bonus to pay off Home Depot / Lowes / Subaru or any other organization.
What advice would you give someone who is just beginning their journey of becoming debt free?
You have to focus on the end. The joy of scrimping and saving will come, but it usually doesn’t come until you’ve been into the process for a while. What will get you through the first critical months is the hope that you will make it out the other end in a better place than when you started. As Dave Ramsey says, “I never said it would be easy. I just said it would be worth it.”
Is being debt free (except the house) as fun as you thought it would be?
Yes. Absolutely. With the Baby Step 4,5,6 experience in the bag, I can taste the freedom of having no mortgage. I giggle like an idiot when I think about it.
What’s your next financial goal?
I am 33 and my wife is 31. We plan on having our $350,000 house paid of by the time I’m 39.
Wow! That’s fun…is your wife as pumped as you are?
She is. She is more subdued than I am so I wondered at first. Once I saw her posting on couponing sites about our path and responding to questions on money message boards I realized that she had a bit of a nerd in her, too. We’re both excited about paying down our mortgage and what the future holds for us and our 3 children.
Do the kids know what’s going on? What do they think about all of this?
They do! Our oldest, Jacob, understands that borrowing is bad and that he doesn’t want to do it. He and Sarah, the second child, ask me on Special Dada Day (Saturday drives to Dunkin Donuts) to play our debt-free scream on the drive. They scream along with the family scream, which they were part of, and laugh afterwards. I am going to make sure they never forget why we were all screaming that day.
WOW! That is so cool! I love that!
So tell us some of your budgeting secrets – any good tidbits to share?
I am not sure it’s a budgeting secret so much as it is a Baby Step 2 secret. Sit down regularly and write down how much you have paid that month in interest. Remind yourself that you’re paying that amount for the right to have bought something before you had the money. That’s what it is, after all. If that number doesn’t motivate you, not much will. I dare you to buy things on credit cards after seeing that amount.
We drove to Nashville the very next day and did our debt-free scream from Dave’s lobby. On the way back home I stopped at an antique store and bought my wife the bench that she desperately wanted for our foyer. That was a nice feeling.
So did you get to meet Dave Ramsey? What was that like?
Frankly, it was surreal. He looks exactly like he does in all of the pictures I’ve seen and he sounded just like he does on the radio. It was difficult not to hug him and tell him that I had a man crush on him. I opted instead for the stock photo and handshake. It was worth every mile of the drive.
Absolutely! Now most of them, and I do mean most of them, are somewhere in the middle of their own Total Money Makeover.
It allowed me to move closer to family and work without fear. I take bigger risks at work and work for the joy of it instead of feeling like I need a certain raise, promotion or bonus to pay off Home Depot / Lowes / Subaru or any other organization.
You have to focus on the end. The joy of scrimping and saving will come, but it usually doesn’t come until you’ve been into the process for a while. What will get you through the first critical months is the hope that you will make it out the other end in a better place than when you started. As Dave Ramsey says, “I never said it would be easy. I just said it would be worth it.”
Yes. Absolutely. With the Baby Step 4,5,6 experience in the bag, I can taste the freedom of having no mortgage. I giggle like an idiot when I think about it.
I am 33 and my wife is 31. We plan on having our $350,000 house paid of by the time I’m 39.
Wow! That’s fun…is your wife as pumped as you are?
She is. She is more subdued than I am so I wondered at first. Once I saw her posting on couponing sites about our path and responding to questions on money message boards I realized that she had a bit of a nerd in her, too. We’re both excited about paying down our mortgage and what the future holds for us and our 3 children.
Do the kids know what’s going on? What do they think about all of this?
They do! Our oldest, Jacob, understands that borrowing is bad and that he doesn’t want to do it. He and Sarah, the second child, ask me on Special Dada Day (Saturday drives to Dunkin Donuts) to play our debt-free scream on the drive. They scream along with the family scream, which they were part of, and laugh afterwards. I am going to make sure they never forget why we were all screaming that day.
WOW! That is so cool! I love that!
