Normal is Broke. 2011 is Our Year to Be Weird!

This post has taken a long time for me to get to as I started it in February (on Valentines day...so romantic!) and just now found the time to have Nik read it before posting). Another reason it took so long to even start on the post was because I was afraid to share it with everyone because of embarrassment. But after Nik and I have been working on this EVERY.SINGLE.WEEK for the last few months, we feel that we might be keeping something very helpful and special from somebody out there in cyberspace. We need to share our story in hopes that someone will become as happy as we are! Nik and I also want this written down as a reminder to us of where we came from...so what more perfect way than our blog!

See...when Nik and I got married back in June 2009 we both brought debt into our marriage. Not a lot of debt, but it was more than we were pleased with. Then over our first year and a half of marriage we worked on getting it paid off, slowly but surely, but sometimes more slowly than anything. Our goal was still there...to "one day be debt free." That was our problem...."one day"....that isn't good enough although we were determined for that day because we have hated having this ball and chain around our ankles. Debt is something you live with everyday. It doesn't go away. It doesn't sleep. It lives and breathes and grows just like us. We are sick of this monster.

Well back in March 2010 we paid off our wedding rings with our taxes and it felt AMAZING! We said we were then going to snowball that payment into another debt, but it didn't work out too well. Other things somehow found themselves more important for that money. We just never got around to it. We did not budget properly. That was a mistake we have since had to pay for - (interest).

Over the summer of 2010 we moved out of Utah and worked in California saving up money for a house when we would move back to Arizona. We saved up a couple thousand and felt pretty good. We moved back to Arizona in August, but ran into employment delays. I had a steady and great paying job, but Nik did not. He worked with his dad landscaping but those jobs are only good when people want to pay for it, and it has kinda been slow with the economy being so dead. So, we moved in with his parents, and for that we are so thankful. Because of our debts and only my secure income, we couldn't afford much of any sort of apartment. Then in December we moved in with my parents because my in-laws housing situation was changing. We are so thankful for our supportive parents. They have been so kind to us in our times of need!

Back up a little bit to September 2010. That was my birthday and I told Nik that all I wanted was to pay off a credit card. We just had a couple hundred on one and we had the money available, so on the 21st, the day before my birthday, I made that payment! It felt so good! Best birthday present ever. I was so happy, smiling like crazy, and on Cloud 9. Weird...but definitely the best present I got that year.

October came and went and in that time we found out we were expecting our first baby. Yes, we were heading in that direction anyways, but Heavenly Father granted us this sweet spirit a little earlier than we were anticipating. So...this gave us more motivation to become debt free! Our goals as parents are to have me home with the children so they can have a mom full-time, but the only way we can do that is if we get rid of this nasty ball and chain around our ankles.

December came by and Nik heard about the Financial Peace University that Dave Ramsey has and that there was a special going on to attend this 13 week program. So we saved up some money and signed up for the class and got all the materials. We were so excited! This was our Christmas present to each other. It was to start in the middle of January and so we made the Resolution to become debt free in 2011.

Also after signing up and reading more about Dave Ramsey (we already used his Cash Envelope System but that was it) we decided to take the money we saved for a down payment on a home to pay off debt. There are 7 baby steps that Dave recommends you follow to be the most successful in becoming debt free.
1) Build a $1000 Emergency Fund
2) Pay off all debt (using the Debt Snowball method)
3) Build 3 to 6 months of expenses in a Savings account
4) Invest 15% of household income into Roth IRA's and pre-tax retirement
5) College funding for children
6) Pay off home early
7) Build wealth and give!

These steps are put in this order because he finds they are easiest for people to follow. We had already put away the first step from taxes last year and saved more money for a house. That was backwards. We were spending so much interest on the money in debt that it didn't make sense to keep that little money earned in interest from our savings. After just being DONE with this debt, we got MAD! Dave says that is when he knows the person or couple is going to do well...when they get MAD at the situation. We were LIVID! We looked at the amount of debt we had and started paying off the smallest amounts first with the money from our savings. We paid off a line of credit in December and then a credit card in January. It felt so good! We still had the $1000 saved for our Emergency Fund but now we were closer and closer to becoming debt free!!!

There were some hard times in December in the midst of all the holidays and getting MAD about debt to the point we were feeling happy about being more free! I lost my job the week before Christmas. That was hard. I had been with my wonderful boss for almost 4 years but when her budgets got cut, she couldn't afford another staff member. I never thought that day would happen. I mean, heck, everyone needs insurance, right?!?! But my time at work was brought to an end. Yes, not having to travel over 100 miles a day for 2 hours was such a beautiful thought, but how were we going to pay off this debt and care of a family? How?! After much prayer Nik and I felt this was meant to be. Sort of like a kick in the pants from Above to get our financial orders in a row. Nik was just offered a job in November with Bank of America, so luckily he had a steady job and income. There in his division they offer lots and lots of overtime. Nik has been able to work overtime and still go to school online. With this overtime, we have been able to keep paying towards our debts and live on a tight budget so that the most money can go towards this evil ball and chains around our ankles.

In January when our Financial Peace University class started, we were so pumped up! We were going to kill this monster in 2011! Our official goal was to have it all paid off by December but the better goal would be to pay it off before the baby arrives! In the mail we got an offer from USAA for a credit card that has 0% interest on all balance transfers until December 2011. SWEET! Nik and I talked about this and decided it would help a TON to not have interest or fees. I applied and we qualified for enough to take care of all our debts. We were STOKED!

Now that February is here (I started this post on Valentines day but just am now getting around to publishing it) we have all our debts on the USAA credit card and no more with interest! Now we can get cracking! Then this last week I sat down and listed our debts each month since February 2010 and it made me sick! All this money that is being put to waste on things we don't even remember purchasing. All these loans for hospital bills, braces, and dental appointments. Although most of my debts were medical bills...there were a lot in "Stupid Tax", as Dave likes to call it.

Let me list out the points of our madness!

-In February 2010 we had a total of $12,026.98 in debt
-Now in March 2011 we have $2,157.21 in debt.
-Although that seems like a good jump, and it is, we have paid $13,913.28 towards that debt in 13 months
-$2,103.47 was paid in Interest and Fees.
-($2,103.47 and $13,913.28 will not add up to the amount of debt we had in Feb 2010 and March 2011 only because 2 or 3 times in between our moves across states we had to put a charge on a credit card as we were in between paychecks...but these calculations are correct.)
-On our Chase credit card the minimums were around $52 a month (although we always paid more, it made us sick to think that) the interest and fees were $49 a month! What IF we only paid the mins. SICK!!!
-Our Chase credit card had 23.24% interest. DISGUSTING!
-In February 2010 we had 7 different debts.
-Each month we have been paying between $400(on a low month) and $570(on a high month) towards debts. THAT could have gone to savings or for our situation right now, a roof of our own over our heads!
-GAH! I cannot get over how much money has been 'given away' to interest and fees and stupidity.

Now, I do not write this to brag or to boast about being ABLE to pay of these debts. I write this to show others that there is a way out. There is a tool, there is help, there is motivation. You do NOT have to be stuck in a rut with the world taking your money. You CAN have control! It IS possible! One baby step at a time. That's all...baby steps. That is all Nik and I have done and will continue to do for the rest of our lives.

The most important thing we have learned is that we need to 'name' each dollar before it is 'born'. That means each dollar is planned in the budget on what a regular paycheck would be BEFORE you are paid. Then all the extra goes towards debt or savings, whichever the situation might be for yourself. Now, that does not mean to not give yourself space to breathe...because if you don't give yourself some sort of Allowance, you will one day binge and regret it. So far, this has worked for us. If things go right, we WILL have this paid off before the baby arrives....even if that means we wake up early for a paper route. We WILL make this happen. All this is possible because we have been shown the way out.

Check out Dave Ramsey.
He is great! He is motivational. He has been to the highest of highs and then the lowest of lows when everything was taken from him all in his 20's. Read his story. This IS possible.

Again, I wrote this to remind Nik and I of where we have been. This is also to help those that might not know of these tools and the fact that debt can be erased. This has made me and Nik so happy to feel free and to see the light at the end of the tunnel. We just want to share it so others can have this same joy!



NOTE FROM NIK
Dave quotes a lot of scriptures as he goes through his lessons. He quoted a scripture from proverbs and explained it a little bit. I am not a sciptorian and a lot of the Old Testament confuses me but he has shed a lot of light on one in Proverbs

Proverbs 6:1-5
1. My son, if thou be surety (old testament term for debt) for thy friend, if thou hast stricken (made agreement) thy hand with a stranger,

2. Thou art snared with the words of thy mouth, thou art taken with the words of thy mouth.

3. Do this now, my son, and deliver thyself, when thou art come into the hand of thy friend; go, humble thyself (sell those fancy unneeded things), and make sure (repay) thy friend.

4. Give not sleep to thine eyes (work, work, work), nor slumber to thine eyelids.

5. Deliver thyself as a roe (old name for a gazelle, a VERY fast animal)  from the hand of the hunter, and as a bird from the hand of the fowler.

and in 22:7
7. The rich ruleth over the poor, and the borrower is servant to the lender.

I only have one person that I am servant to and that is Jesus Christ. No man can have two (or in our case with 7 lenders, 8 masters) so we, as my beautiful wife has stated, are taking off these shackles so we can be able to serve our master and live the way intended. We are going to teach our children to be debt free and make wise decisions so that we can start a new family tree, as Dave says. How awesome would it be if we never had to have a credit card, had a house paid off at like 35, had THOUSANDS of dollars for each of our children to go through college without loans, could walk into an appliance store or onto a car lot and buy something that would be $600 a month for the next 5 years but instead pay for it outright and not hurt our finances one bit, take vacations and not worry that we can't make a mortgage payment if we do, and most of all drop everything and serve faithfully in any calling the Lord asks us to... IMMEDIATELY. This is our new vision. Happiness doesn't come from money, but being free from the snares of this world to free our minds to find that happiness that comes through Christ. I love my beautiful wife Dawna in joining me and inspiring me so that we can do this. Get mad! Get Debt Free!