Yesterday, I shared part 1 of our debt free story. Here’s the rest!
Dave Ramsey Approved Debt
So we’d read the book. We knew what we wanted and we were excited to make it happen. But, as with most couples, the first thing we were going to do together was get into more debt. Even before the wedding, we took out a loan to buy a house.
Now homeowner’s debt is a little different. First of all, it’s Dave Ramsey approved (as long as the mortgage isn’t huge and is only a 15 year). Second, it’s a fantastic investment. We all have to hold on to the idea that someday, the housing market will go back up and when it does, our home will be one of the best investments we’ve made.
But we had to make a plan. We weren’t going to be paying on this mortgage for 30 years…or even 15. We knew that it was our goal for me to stay home with the children and we knew it was going to be tough on Brian’s teacher’s salary, so we made the decision to buy within our future means. With Brian and I both teaching, we could have easily had a very nice home. But since we were looking ahead, we decided to buy a home that we’d be able to pay off within a couple years.
The home we found was a foreclosure, so it needed some work, but mainly just cleaning and painting–not expensive work. And the house was small enough to be cheap, but big enough to have fit us comfortably thus far. Since Brian had continued to live with his parents and had saved up, he had a good down payment to put on our new little house.
Setting a Budget to Get Out of Debt
The first semester after our marriage was my final semester of school. I was student teaching and not bringing in any income. We set a tight budget and stuck to it. Then I got a job. This is where things could have gone very differently. Normally, when you get a pay raise and you’ve been living on a tight budget, you up your budget. We didn’t. Every bit of money I made substitute teaching during that spring semester and then teaching in a classroom for the next two years went toward our house. We continually paid more than our mortgage which drove down the principle fast which also meant we were paying less interest. It was so exciting to watch that number go down!
During those two years, Brian took a small pay cut when he quit his teaching job, subbed for a little while, and then began working as an insurance claims adjuster. When I got pregnant, we knew we were going to have the money to pay off our loan by the time the baby was born!
At that point, we did what Dave Ramsey suggests and stockpiled our money instead of paying down the debt just in case there was an emergency and the hospital bill was astronomical or something. Everything with the pregnancy and birth went smoothly and shortly after our first little girl was born, we sent in that final check.
What an amazing feeling to own nothing to anyone! Yes, we still have bills and money is still tight because of rising gas and food prices, but we are not slaves to any lender.
People look at how we live–me staying home–and say they sure wish they could do that. I’m here to tell you…you can! It might take you a little longer if you already have children or your income isn’t steady, but we’ve been there. We had income changes and emergencies along the way and we didn’t always want to stick with it. There were definitely times I would have loved to take a vacation or buy something nice or have a baby or quit teaching, but in the end, we are debt free and it was SO worth it! We can do ALL those things now because we lived like no one else.
I hope this story has inspired you. I highly recommend the book The Total Money Makeover and also attending Financial Peace University if you’re able. It changed our lives for the better and we’d never go back!