Some years ago when we lived in Alabama, we heard about a guy named Dave Ramsey. He was doing a radio show and telling people to get out of debt. He was telling folks to live without a credit card and going so far as to say people should live on LESS than what they make, and actually save money. I thought it sounded like the impossible, but my husband was soaking in everything Dave Ramsey said. We had young children and what I considered a little debt. Part of it was student loans from law school for my husband. I read Dave’s book, but didn’t put any of it into practice, and Matt didn’t force the issue.
Fast forward a couple years and we moved to San Antonio. Matt was blessed with a great job, and he took over the checkbook and got serious about getting debt free. Before I knew it, the student loan (a very large one from law school, remember?) was gone in less than a year. A couple of credit cards were the next target. We hadn’t used them in a good while, but had simply done balance transfers from old cards to new ones in order to keep the interest rate at 0%. Matt’s diligence wiped them out. Next thing I knew, he was putting all the available money in the budget toward paying off the cars. When I made the phone call to have the bank’s name removed as loss payee from the auto insurance, the carrier could hardly believe it. I guess they don’t get those calls too frequently.
The last debt remaining is the mortgage. I utilize the cash envelope system that Dave recommends. Some folks that know I use this method think it is complicated and too restrictive. On the contrary, I feel like the monthly budget I maintain gives me freedom. I tell my money where to go. I am not wringing my hands at the end of the month wondering where it all went. I know that when I walk out of a store, the purchase is mine and I am not going to see a bill for it later. If I have money in my “dining” envelope, I can have a meal out and not feel guilty about it. Our money belongs to us, not creditors. What could be less restrictive than that? That’s financial peace. That’s financial freedom.
Photo credit, irargerich