My Dave Ramsey Story
I grew up in a typical middle class family. We didn’t have all the money in the world, but we weren’t poor either. My parents taught me to work hard and nothing was given to me. I also observed that much of what they did financially involved borrowing money. My first encounter with a loan was when I was turning 16 and paying my parents back for my first vehicle. $100 a month seemed pretty doable and easy on my part time grocery store $5.15 an hour job.
Up until my senior year of high school, I had planned to go into the Navy as all the other males in my family were military for at least some portion of their life. But a last minute change led me to college…and student loans. While I worked all the way through college, I used most of my earnings as fun money and borrowed roughly $50,000 to go to a public division II school, the University of Central Oklahoma. It should have cost no more than $25,000 but I had to take out the extra bit for apartment living, car payments, and of course the first iPod Nano that could hold 4 gb of songs. Plus I kept using my expanding credit card limits to buy things I didn’t need and make the minimum payments while in school…DUMB!
After graduation, I was visiting with my mom and she said she was taking a personal finance class at work called Financial Peace University. I quickly brushed her off and said I had no need. I had a finance degree after all, I was super smart… WRONG!
With a move down to Fort Worth in 2011, I shortly thereafter met my now wife who was debt free. We married and I brought my new truck loan and my student debt with me. Six months into marriage we couldn’t stand to live in an apartment and bought a house, adding another $130,000 of debt. We had a kid, upgraded houses and cars and were living the American dream.
It was 2017 when my wife and I were listening to the sermon one Sunday and a couple came on that talked about feeling trapped by debt and that they buckled down to pay it off and how freeing it felt. One of the things that stuck with me was the feeling of working to make debt payments and that we were making more money than they were with little more debt. It could be done. The thought process particularly struck a nerve with me at that point that I realized I was paying on 10 year old fun on college loans plus so many other things! Being frustrated with the predicament, I remembered my mom offering the Financial Peace University stuff and did a quick Google search to find Dave Ramsey’s name. I ordered the Total Money Makeover and read it in about 24 hours. I used to drive an hour to work and an hour home and I would load up all of Dave’s podcasts from the previous day to take in. I was hooked and I really hated my debt at that point.
I started to put numbers down:
iPhone: $500
Air Conditioner: $5,300
Truck: $22,700
Student Loans: $34,000
Camper: $25,000
Personal Loan: $44,000 (down payment on a house plus the purchase of a new vehicle)
Grand Total: $131,500 of non-mortgage debt (Plus our home mortgage of $175,000)
I wanted to puke. I also had to get my wife on board.
After discussing it and having a camping trip with 8 hours on the road listening to Dave, we were in. The debt snowball was lined up and we were off. It was difficult working the budget, but literally got the envelope system going (I still can see those bright green envelopes my wife made) and every extra dollar we had went to kill debt. I was so bought in that I stopped my 401(k) contribution that had a 7% match just so I could throw more at it. I WAS WORKING SPECIFICALLY IN THE 401(K) ARENA AND I’M TAKING THIS STEP! It wasn’t the easiest journey and there were ups and downs, but we knocked it out in about 2 years thanks to some great promotions and bonuses earned along the way.
Over that same time, I was able to cash flow my master’s degree and utilized tuition reimbursement from my employer and obtain my CFP. Two things I had really wanted to do in my career for over a decade, but never went full force.
From the time we paid off the debts, we started stocking away as much cash as possible, not really having a plan other than to build up our nest egg. Little did I know that stocking up that cash would put me in a position to walk away from a great paying job as a Vice President of Fidelity Investments to open my own firm and have the cash runway for our family to survive while getting it off the ground.
If you’re still reading at this point, it’s safe to say that you wouldn’t have read this at all without the motivation and simple plan from Dave Ramsey to get me here. I’d still be tied to need that next paycheck to pay the next set of payments. I’ve lived through the debt snowball and there is light at the end of the tunnel. We are currently on steps 4, 5, and 6 and continuing to try and stay focused on the little things.
To say I am ecstatic to be a SmartVestor Pro is an understatement! I’m looking forward to hearing your journey.
