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

My heart was never so happy to write a check as it was today.  I have officially written my last and final student loan check for almost $2,700.  Hallelujah!!  Thank you Dave Ramsey and others who gave us motivation and inspiration to book it.

That’s 30,000 we paid off in two years and four months (this doesn’t count how much we’ve paid off of Jonathan’s loans– or how much we paid in interest)!!  Feels really, really good.

I’m sure more expenses are going to creep up (Abby’s recent medical issues, our car issues, etc), now that we’ve attacked a major debt.  But I’m just happy at this moment and look forward to being gazelle intense about Jonathan’s student loan debt now.

At the same time we started knocking out debt, we started weekly tithing to our church and other works.  Before that time, I begrudgingly wrote a check a few times a month to church, and even after we started paying off debt, sometimes it was still hard to write a check to church, knowing that that money could be used to pay off debt or whatever else.  But I got to a point where this verse hit me:

“Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.” - Malachi 3:10

And yes, we’d like things to be better/easier, but they could be a lot worse.  There have been tons of blessings!

This is an updated version of a post from 10/2/08.  Please forgive my laziness.  I am getting ready for a garage sale– one of the ways we scrounge up money to pay off debt.  This is actually our first garage sale as a married couple.  Cross your fingers!

I’ll write other posts on steps that help us get out of debt, but today, I’m gonna quickly introduce y’all to Dave Ramsey. He has written over 14 books about getting out of debt; we recommend The Total Money Makeover. He’s the host of The Dave Ramsey Show, which is on the radio and on Fox Business Network on TV.

Every radio show starts w/ him saying, “Debt is dumb. Cash is king. And the paid off home mortgage has taken the place of the BMW as the status symbol of choice.” Amen to that!

On his Radio Show and I guess on the TV show (I’ve never seen the TV show cause we don’t have cable . . . because we’re getting out of debt), Dave takes calls from people asking financial questions. Also, he gives opportunities for those who have recently become debt free to call in and give their “I’m Debt Free” yell. Here’s an example of that:

Jonathan and I are trying to “live like no one else [by not taking loans/using credit cards], so later, [we] can live like no one else [relaxed and debt free].” The only loans we had/have (except for the house) were/are college loans.

Before Abigail came along, we had paid off my first school loan of $15,000 in less than four months.  As of today, we have paid off $28,000.  I only have $2,700 left on my second school loan!  Then, we have to work on Jonathan’s school loans.

So, we still have more to go, and it’s a slower process now that we have Abby, but we’re looking forward to the day where we can give our “Freedom Call” to Dave.

**Click here to enter the YoBaby Giveaway.**

I have been meaning to write about this, but I had kept forgetting.  Sorry.  I hope it’s not too short notice.  I also apologize for not writing more about Dave Ramsey lately.

Anyway, tomorrow, Thursday, April 23 at 7 pm Central, there will be a Town Hall for Hope meeting, hosted live by Dave Ramsey.  The event is free!  For the first half hour, Dave will

offer straight talk about the economy, recession, foreclosures, and more. He’ll carefully explain where we’ve come from, where we are now, and what we should be doing with our money during this time. Then, Dave will spend an hour answering your questions live!

Click here to find a venue.  My church is hosting it, and I’ll be there!  Will you?

Spending less money than you make allows you to reap many benefits: building an emergency fund, peace, financial freedom, more security, less stress, etc.

So what are two simple ways to spend less than you make:

• Never, never, never get a Credit Card. I’ve been told that one can easily be swayed into buying impulsively with the catch phrase “Buy Now, Pay Later.” (My husband and I have never had a credit card). In Dave Ramsey’s The Total Money Makeover, he finds “A study by Dunn and Bradstreet showed that the credit-card user spends 12 to 18 percent more when using credit instead of cash” (42). He also advises one who does have a credit card to get a Plasectomy: cut up those cards. Download
• And never, never, never take out a loan (unless it is to better your education or purchase a house– both wise investments). Proverbs 22:7 says that “the borrower is slave to the lender.” In Dave’s book, he says, “Taking a car payment is one of the dumbest things people do to destroy their chances of building wealth” (32).

At the beginning of every month, Jonathan and I have a Budget Meeting. We go over every “Fund” and discuss what things we anticipate happening in the month to alter the previous month’s budget. For example, we know we might want to add a few bucks to the Atmos Gas Fund since it’s getting colder (yuck!). And Abby will need new wipes next month, so that Fund will go up by $14. Gas is going down (hallelujah!), so we might lower the amount there.

If you know a little about Excel, it’s easy to add formulas to calculate Total Spent, Actual Spent, etc. If you don’t know much about formulas, just go to the “Help” menu. Or, if you’re not into doing a budget on the computer, you can always do the math on paper. Notice at the bottom of the Budget, we know how much we anticipate spending each month. Some other items at the bottom are blackened out to protect the innocent.

We have two spreadsheets when we calculate our Budget. The first page is the one you see above. The second page, below, is our Ledger where I enter in ALL our receipts (even the $0.35 for water; keep record of everything!).

This is all done by formulas, also, to where the items on Ledger Sheet are automatically entered into the correct spots onto the Budget Sheet.

The idea is that as the month goes on, we know where we stand financially. If we’re getting close to spending all our Eating Out money, then we know we need to plan to eat at home.

Our goal is to spend a lot less money than we make every month. Theoretically, by squeezing our budget, we grow our bank account and then use the excess money to pay off my student loan.

Not sure how much to budget? Dave recommends these amounts:

• Charitable gifts: 10-15%
• Housing: 25-35%
• Utilities: 5-10%
• Food: 5-15%
• Transportation: 10-15%
• Clothing: 2-7%
• Medical: 5-10%
• Personal 5-10%
• Recreation: 5-10%
• Debts: 5-10%

We actually do this Budget on Google Docs. Haven’t used them? Well, stay tuned for next week’s Technology Thursday, and we’ll tackle Google Docs.

There are seven “Baby Steps” Dave Ramsey thought of for Wealth Building. They are:

1. Build a $1,000 emergency fund.
2. Pay off all debts, smallest to largest, using the “Debt Snowball.”
3. Put 3-6 months of expenses into Savings.
4. Invest 15% of household income into Roth IRAs and pre-tax retirement.
5. Set up a college fund for the kids.
6. Pay off your home mortgage early.
7. Build up wealth and give. Invest in mutual funds and real estate.

Dave expounds on these much more in his book The Total Money Makeover.  Click the following link to purchase this book and the workbook: Dave Ramsey Twin Pack - Total Money Makeover Book & Workbook

Dave starts talking about the Baby Steps after 2:28 minutes.

So, how do you finish Baby Step #1, so you can move onto #2? You squeeze your budget. What’s a budget, you ask? Well, stay tuned for next week’s Frugal Friday when I show you images from our budget and how to set up one for yourself.

I’ll write other posts on steps that help us get out of debt, but today, I’m gonna quickly introduce y’all to Dave Ramsey. He has written over 14 books about getting out of debt; we recommend The Total Money Makeover. He’s the host of The Dave Ramsey Show, which is on the radio and on Fox Business Network on TV. Every radio show starts w/ him saying, “Debt is dumb. Cash is king. And the paid off home mortgage has taken the place of the BMW as the status symbol of choice.” Amen to that!

On his Radio Show and I guess on the TV show (I’ve never seen the TV show cause we don’t have cable . . . because we’re getting out of debt), Dave takes calls from people asking financial questions. Also, he gives opportunities for those who have recently become debt free to call in and give their “I’m Debt Free” yell. Here’s an example of that:

Jonathan and I are trying to “live like no one else [by not taking loans/using credit cards], so later, [we] can live like no one else [relaxed and debt free].” The only loans we had/have (except for the house) were/are college loans. Before Abigail came along, we had paid off my first school loan of $15,000 in less than four months. We still have more to go, and it’s a slower process now that we have Abby, but we’re looking forward to the day where we can give our “Freedom Call” to Dave.