Taking Things in Stride…

One of the major goals that Mr. Wonderful and I have laid out before ourselves is to become debt free. I think I have mentioned this before but we began following a guy named Dave Ramsey several years ago and have been on a quest ever since to divest ourselves of debt and begin to live a life free of payments to anyone other than insurance premiums and household bills. I would love to say that this has been super easy and that we are debt free except the house by now. Unfortunately we are not quite there yet but we are working our budget and we with our insurance were able to cash flow breast cancer as well as a stint of our daughter’s in the hospital in 2012. So there is progress, just not super fast and we have added no debt to our lives since 2011. Yay!

I bring this up because one of the things that Dave asks you to do when you begin the process of getting  yourself out of debt is to create a $1000.00 emergency fund. Sell stuff, cut back on going out to eat, whatever it takes to build up $1000.00 in a separate account that you will use only for emergencies. The reality is that emergencies are going to happen. The car is  going to break down, the dog is going to need to go to the vet or a water pipe is going to break in your house. Normally these are the times that we pull out our credit cards and put the emergency on the card and then have more debt. $1000.00 is not a great sum of money but it’s enough to cover most minor emergencies.

Well, we got the opportunity to use our emergency fund the other day. We have had our washer and dryer pretty much since we got married, 15 years ago. We knew it was on its last legs but we didn’t want do purchase anything new until we had to because well, paying for cancer among other things seemed more like a priority. So on the day before Thanksgiving she breathed her last breath.  Fortunately Mr. Wonderful was able to get it to spin out the water as she was in mid cycle when she decided it was time.

The cool thing? There was no stress involved. No wringing of the hands wondering what we were going to do. We had a house full of people and we looked at each other and said “well that’s what the emergency fund is for,” and we went on with our day. It was the most stress free emergency we have ever had. We have had many other opportunities to use the emergency fund between dogs, cars and other things but this seemed bigger. It was great not to have to worry about what we were going to do. Another bonus? Black Friday! We looked at a few used washers but most were about the same price as a new one so we marched on over to Sears and bought ourselves a new washer. It’s purty. I am working out the budget to make room to build the emergency fund back up but that is so much less stressful than living without a washer or going into debt to buy one.

Dave has seven baby steps to getting out of debt and building a legacy of financial peace. 1. $1000.00 Emergency Fund 2) Debt Snowball 3) 3 to 6 Months of Expenses Emergency Fund 4) Invest 15% of your income 5) College Funding 6) Pay off your home early 7) Build wealth and give. Each step gets completed before you move on to the next one. Go to Daveramsey.com for all the details and information. It has been a game changer for us. We look at money in a whole new way. We are trying to steward better what we have been given, clean up the mistakes we have made along the way and to teach our kids that you can live life by saving and purchasing instead of borrowing and paying back. Do we still make mistakes? Yep. But we are soo much closer to the finish line than we were a few years ago. This is so very exciting and it’s sooo very nice to not have things like a broken washer ruin your holiday because you don’t know how you are going to replace it. Instead the whole situation provided us with yet one more opportunity to be thankful.

Have a great day, All!