Debt - How We're Conquering It
Debt. It's a cloud many carry, and most couldn't care about. It comes in the form of credit card debt, student loans, mortgages, financed vehicles and equipment, and ranch loans. Then there's medical bills/debt, a totally different story, but the way to conquer them is the same way you conquer all other debt - aggressively.
We have had a loan over our heads for over two years now. My then-fiance, now-husband, got a cattle loan in January 2016 so he could provide a home for his future family. At the time, he was making very little, and our only hope was to pay off the interest every year, with perhaps some extra to put on the principle, and re-sign. With help from my family, we landed with our feet on the ground but little thought given to the prospect of actually paying off the debt.
In June of 2016, he got his first real job, and suddenly we had an enormous income boost. This money was thrown at the house, improving our diet, and also at the baby we discovered was on the way. Still we gave little thought to the loan, except for the fact that we could now easily cover the interest and be able to re-sign for the loan, risking the cows, the collateral, for another year.
Over the next eleven months, we finished paying the midwife and re-signed for the loan. D got a couple of raises, and Yance was born. And then in May 2017, his job sent him to a seminar in DFW, about Entreleadership - led by Dave Ramsey.
Now. D and I both had been raised knowing who Dave Ramsey was and all about his financial programs. But neither of us had given it a whole lot of thought, and I was too busy with a baby by this point to even consider planning our finances. We had a budget on paper that we stuck close to, and D ran the finances, so I was okay. I trusted him, and he has proven that trust to be well placed time and again.
He came back from the seminar with a fire to get this debt demolished. We revamped our budget, looked at our finances, and set a goal date. May 31, 2019. But after refiguring things over and over again, we pushed it up to December 31, 2018, and then got crazy and made it July 4, 2018.
And if our finances fall into place like they have a good possibility of doing, we will be out of debt by June 1 of this year. A thing or two need to go right for that (like the tax refund.... still waiting on that...), and even if they don't we still can have this thing demolished by July 4. We thought a few times that we wouldn't make it, but somehow we are so close already.
The debt has gone from 100% to less than 16% in 11 months. We've already paid off more than 84% of it - by throwing half or more of our income at it!
Our plan has been to budget with our first paycheck of the month, and then use the second (and sometimes third) to tackle the debt. And the way recent checks have run, we can do it by our goal date.
After this, the cows will no longer be at risk, we won't have to worry about having money available every year to send to the bank, and we'll finally be able to get back to improving our house and property.
We will have finished baby step 2 (baby step 1 was build a $1,000 emergency fund, which we knocked out in no time), and we'll be on to baby step 3. That emergency fund will be put in an official savings account and grow to handle 3-6 months of expenses, with money being put in it every month until the dollar number is acceptable. We'll build it to 3 months' worth, and then decide when we want it to reach 6 months. The emergency fund, whenever we dip into it, no matter what baby step we are on, will be focused on solely until it reaches its goal (again). This fund will cover vehicle breakdowns, medical bills, job loss, and other real emergencies.
Baby step 4 is investing 15% of our income into retirement, and after that is baby step 5. Since we're not big on college, we'll find something to put a set amount for each of our kids in, to let them have when they move out and/or get married. We will be doing baby steps 4 & 5 at the same time.
Baby step 6... well, that is paying off the house, if you have a traditional mortgage. We get to skip this one! If we had to do it, we would be doing 4, 5, and 6 all at once.
Baby step 7 we will never graduate from, and only arrive at once all the other baby steps are complete. We will be building wealth and giving like crazy. In another five years, we should be making our own money with our own businesses - his with guns and mine with horses - and enjoying our lives and our children. All the while funding our children's future, and our retirement. We'll practically be retired by the time we're running our own businesses, and by the time our kids leave home we'll still be young enough to enjoy many adventures together. And our grandkids.
There is a bright light at the end of the debt tunnel, and it is showing us the future we can have if we keep up this aggression and knock it out for good.
And, save large medical emergencies, we will never, ever be in debt again.
"For the rich ruleth over the poor, and the borrower is servant to the lender." Proverbs 22:7.
We have had a loan over our heads for over two years now. My then-fiance, now-husband, got a cattle loan in January 2016 so he could provide a home for his future family. At the time, he was making very little, and our only hope was to pay off the interest every year, with perhaps some extra to put on the principle, and re-sign. With help from my family, we landed with our feet on the ground but little thought given to the prospect of actually paying off the debt.
In June of 2016, he got his first real job, and suddenly we had an enormous income boost. This money was thrown at the house, improving our diet, and also at the baby we discovered was on the way. Still we gave little thought to the loan, except for the fact that we could now easily cover the interest and be able to re-sign for the loan, risking the cows, the collateral, for another year.
| Not our cows |
Over the next eleven months, we finished paying the midwife and re-signed for the loan. D got a couple of raises, and Yance was born. And then in May 2017, his job sent him to a seminar in DFW, about Entreleadership - led by Dave Ramsey.
Now. D and I both had been raised knowing who Dave Ramsey was and all about his financial programs. But neither of us had given it a whole lot of thought, and I was too busy with a baby by this point to even consider planning our finances. We had a budget on paper that we stuck close to, and D ran the finances, so I was okay. I trusted him, and he has proven that trust to be well placed time and again.
He came back from the seminar with a fire to get this debt demolished. We revamped our budget, looked at our finances, and set a goal date. May 31, 2019. But after refiguring things over and over again, we pushed it up to December 31, 2018, and then got crazy and made it July 4, 2018.
And if our finances fall into place like they have a good possibility of doing, we will be out of debt by June 1 of this year. A thing or two need to go right for that (like the tax refund.... still waiting on that...), and even if they don't we still can have this thing demolished by July 4. We thought a few times that we wouldn't make it, but somehow we are so close already.
The debt has gone from 100% to less than 16% in 11 months. We've already paid off more than 84% of it - by throwing half or more of our income at it!
Our plan has been to budget with our first paycheck of the month, and then use the second (and sometimes third) to tackle the debt. And the way recent checks have run, we can do it by our goal date.
After this, the cows will no longer be at risk, we won't have to worry about having money available every year to send to the bank, and we'll finally be able to get back to improving our house and property.
We will have finished baby step 2 (baby step 1 was build a $1,000 emergency fund, which we knocked out in no time), and we'll be on to baby step 3. That emergency fund will be put in an official savings account and grow to handle 3-6 months of expenses, with money being put in it every month until the dollar number is acceptable. We'll build it to 3 months' worth, and then decide when we want it to reach 6 months. The emergency fund, whenever we dip into it, no matter what baby step we are on, will be focused on solely until it reaches its goal (again). This fund will cover vehicle breakdowns, medical bills, job loss, and other real emergencies.
Baby step 4 is investing 15% of our income into retirement, and after that is baby step 5. Since we're not big on college, we'll find something to put a set amount for each of our kids in, to let them have when they move out and/or get married. We will be doing baby steps 4 & 5 at the same time.
Baby step 6... well, that is paying off the house, if you have a traditional mortgage. We get to skip this one! If we had to do it, we would be doing 4, 5, and 6 all at once.
Baby step 7 we will never graduate from, and only arrive at once all the other baby steps are complete. We will be building wealth and giving like crazy. In another five years, we should be making our own money with our own businesses - his with guns and mine with horses - and enjoying our lives and our children. All the while funding our children's future, and our retirement. We'll practically be retired by the time we're running our own businesses, and by the time our kids leave home we'll still be young enough to enjoy many adventures together. And our grandkids.
There is a bright light at the end of the debt tunnel, and it is showing us the future we can have if we keep up this aggression and knock it out for good.
And, save large medical emergencies, we will never, ever be in debt again.
Comments
Post a Comment