Recently, I had a conversation at work with a co-worker of mine about getting out of debt. He introduced me to Dave Ramsey. I never heard somebody who made so much sense before when it came to personal finance. I have to say that listening to the audio book “The Total Money Makeover” has literally changed my life. The first time I listened to it, I was just sitting there kicking myself as he was calling out all the stupid financial blunders I’d committed like everyone else out there without even thinking about it.
I listened to it once. Then, I decided to listen to it a couple more times. Each time I listened, I seemed to not feel as much regret as I had used to feel. This is when I started the “baby steps” and completed my emergency fund within one month. Not only that, but I will have five credit cards paid off next month. They don’t have very large balances, but I feel excited about this impending accomplishment. I really grasp the concept of what the debt snowball really does in changing a person’s behavior when it comes to managing money.
Family and Finances
My family was never educated in the area of personal finance. I now find myself in regular debates with family members about some of the foolish expenditures that we have made over the years. I argued with my brother over what a rip-off and scam payday/car title loan businesses are. My favorite debate is on rent-to-own businesses. Those take the cake with their 1800-percent interest or whatever it is.
I never actually went as far as to get payday loans or buy stuff from rent-to-own places. My main problem was credit cards. The kid inside me always said, “I want it now!”. The kid usually won and I ended up getting a bunch of junk that I really didn’t need for 27-percent interest. After doing this for awhile, I ended up with around $10,000 of credit card debt. I had to stop and look around. It sure didn’t look like I had $10,000 worth of stuff. Eating out, gambling, and just spending money vicariously didn’t help the situation. I tried looking for solutions to this problem. I went to my bank for a debt consolidation loan to get lower interest. Well, it turns out that you can’t get a debt consolidation loan if you’re in debt. Your credit score won’t be high enough if you have a high debt-to-income-ratio. I felt lost until I discovered Dave Ramsey.
I actually have a plan now and I don’t have a feeling of hopelessness anymore. All of my debt will be paid off in 13 months and I can’t wait for that day. It gets me excited just thinking about it. My advice to anyone looking at starting Dave’s program or something similar to it is to ignore the opinions of those around you. Odds are if you are like me, then all of those around you are engaging in negligent behavior with their money. They have that feeling of hopelessness that I had not too long ago. Get focused! Start a budget and stick to it.
I think that it’s essential that people start becoming more financially responsible and start teaching their children how to manage money from an early age. There is growing trend of people just buying a bunch of stuff for their kids just so they’ll leave them alone. Well, this is why we have so many people in debt nowadays. We were taught as children that it is okay to just go out and buy as much stuff as you can right now. I think if people stopped and realized what they are doing with money as well as how their kids are emulating that behavior, that they would change their habits. Well, I know I have and even though I’m just getting started, I feel pretty good right now.
This article was written by CPF reader Jason Brow.