If you follow Dave Ramsey you will know after reading part three to our journey to get out of Debt- that we moved to step 4. We put our retirement accounts back up to the 15% . That was a quick click of the computer.
During this phase we also, had one of my work pensions bought out and rolled into an IRA. Why? Because if we keep it in the pension, and then pass away my husband gets half til he dies then- the money is gone. BUT–If you roll it to an IRA my husband, our kids and grand kids can inherit the money. And as Dave would say you have more options on how the money is invested. Here are the babysteps as a reminder.
To say we were very behind in saving for our dear daughters college- would be an understatement.
We increased the amount we saved and then every extra ounce of money from my job went into an account for her. When we had 3 years saved up we stopped and started working on the mortgage. We paid bills and then every bit of funding left over went to the principle. On our home. Any bonus, contest wins etc…
I have to to say another HUGE step in paying our house off early was refinancing our mortgage to a 15 year. Once we got out from under our un secured debt (legal fees, credit cards. Etc ) the banks were jumping to refinance us. We lowered our interest rate dramatically and had greater principle amounts going to the loan. Our payment went up $200 a month but, we were paying a greater amount of the payment to principle instead of interest. This graph is not our home. Just a great borrow from the internet to demonstrate the power of 15 year vs 30.
I have been asked about whether the legal situation we were in had anything to do with debt. And it did not. We paid every cent we owed. (It just made our debt worse and our situation harder to climb out of).
We paid our home off in May 2014. (Yes I know it took me 9 month to write an update).
Ten years and one month after purchasing it. We would say 9 years and 2 mos if you take into account the time we were gazelle intense about it. This includes working our way through some really tough times.
Omg !!! Yes our home is paid for but we are not debt free.
Remember this cute little cabin in the woods? We are currently paying every cent extra and will have it paid off very soon. Update Part 5?
We write this not to brag but to be an example to others that they can do this. We were “normal” too – until we started the Dave Ramsey plan. I have to say that we still budgeted for senior pictures, sports for our kids and other life events. It is possible. What are you waiting for? Go to Dave Ramsey’s website and get signed up for a class.
You may think that this is not possible, and that we must make loads of money. While we do make a great living, it is what you do with what you make. It is a matter of telling your money what to do and where to go instead of wondering where it all went. It is living like the previous generations lived.
One of the best parts is that we are leading his FPU class! What a positive experience it has been for us. We are able to give others hope and share in our “stupid” moves with Money.
Remember, you don’t want to be “normal”. As Dave says, “normal” is having credit cards, student loans, car loans, and working paycheck to paycheck.