This year, my wife and I have some definite financial goals and we have a plan that we are following.
Debt-free
The biggest financial goal we have is to become completely debt-free.
Yes, that includes our house!
Let me share a little bit about our journey, and then share some things you can take away from it.
Our Journey
My wife and I were introduced to Dave Ramsey back in 2004. Well, we weren't introduced personally - just introduced to his book: "Financial Freedom." We had been married less than a year at that time and we had a little bit of debt: I had a credit card (which I had maxed out between a laptop computer, engagement ring, and honeymoon) and my wife had a car payment.
I was terrible with finances. I mentioned that maxed-out credit card. At one time before we got married, I had gone to an ATM to withdraw $40 from that credit card, deposited the money in my checking account, and then paid that same credit card $40. Did I mention that I was terrible with finances?
My wife, on the other hand, was pretty good with finances. She did have a car payment, but she had money in savings and managed her money pretty well. She is a big reason we are having financial success now.
During those early years in our marriage, we worked to pay off those debts, quickly paying off the credit card, followed by paying off the car a year or two later. We were also putting money into savings.
We started to get a little lax in our spending as my wife went to school to become an LPN. She also became pregnant with our son. I always knew that my wife was special, but this pregnancy proved it. She had a rare condition where morning sickness wasn't just in the morning - and it wasn't just during the first trimester. She was sick all the time and all through the pregnancy - including during labor. We were told that only 2-3% of women experience this (yea!).
So with the pregnancy complications while going to school, we depleted our savings and began charging on a credit card. Oh, and we got a new car with a matching payment.
And then came my daughter. This was like pregnancy #1, but about three times worse. Luckily, the credit card now had a higher limit.
By the time my daughter was born in 2009, we had over $20,000 in debt between medical bills, the car payment, and the credit card. This was in addition to the $90,000 mortgage we had.
My wife graduated college, got her LPN, and started making a little more money. We started making up ground. We were able to pay off the car in 2010 (about 2 years early), as well as the medical bills. The credit card was dwindling.
We had moved from Illinois to Michigan in 2009, and then back to Oklahoma in 2010. My wife's parents allowed us to stay at they're house for a very low amount (thanks, Dad!), allowing us to finish off the credit card and put a good chuck into savings.
We bought our current house in May 2011!
This presented us with an issue. We still had our house in Illinois. We were renting it out, but the market was still in decline there. We lost the renter and ended up going into short sale.
We found our credit card again and charged about $3,000 - mostly on one Black Friday!
Then we found Dave Ramsey again. I had never listened to his radio show before that, but I would hear it on my way to work. My wife and I started to get intense. Gazelle intense.
We paid off the credit card again, leaving us with just our new mortgage. We built up a 3 month emergency fund as well. My wife was back in school again, this time working toward getting her RN - but we were doing it debt-free this time.
At the end of January 2016, we are looking at about $30,000 left. We plan to continue our intensity, and should have it completely paid off this year.
Action steps
We started by following Dave Ramsey's baby-steps:
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