Debt Free In the Ozarks: Normal is BROKE! Be weird!

A year ago...

noreply@blogger.com (Carol) — Tue, 11 Nov 2008 22:26:00 +0000

I've been so remiss in keeping up with this...

I'll try to do better!

A year ago this week, the little man was in the hospital for the first time having fallen back under eight pounds.

But this year...

Our little man isn't so little anymore! Praise God! At 15 months, he's finally nearing twenty pounds!

He was right at 13 pounds at a year and ended up hospitalized for four days in early August with that nasty gastrointestinal bug [*I* lost 10lbs in 4 days with it - he lost 11oz in 9 days to take him back under 12.5lbs]. We were already being sent to the CARE/Failure to Thrive Clinic at Children's Mercy Hospital in KC the next week and the consensus at the hospital and with the specialists was that he needed what we call the Michael Phelps diet. Two Pediasures a day plus all kinds of other high fat, high calorie foods. The Pediasure alone runs about $2.50 a day.

Thank God we were debt free [but the house and the student loans] as we took a big pay cut this fall [and will likely continue in the spring]. The special drink took a big percentage of our food budget but we were able to buy it no problem. It was what he needed which was all we really need to know. In that time, he's gained over seven pounds - more than he gained in the whole first year.

And last week, the specialists in KC released him from their care! They're moving him down to one Pediasure a day and down to none after he turns 18mo or so.

Check him out below. The picture on the left was at his first birthday party - after he got sick, before he was admitted. He was probably 12lbs 10-11oz then. The second picture was the birthday party for our two oldest girls in October. He was probably about 18.5lbs or so then, eleven weeks later.

Unfortunately, we just found out we're going to have to change doctors because of insurance reasons :(. We hate that because our docs are FABULOUS and the pediatrician we used to have in the other network isn't taking new patients. :(

But God is good.

All the time.

And something will work out :).

May update

noreply@blogger.com (Carol) — Thu, 29 May 2008 03:54:00 +0000

Wow. Life has been crazy this spring. I had every intention of updating this often...

No time like the present!!!

Our little man is 10 months old and doing so well!! He's eating real food and everything! [Okay, real baby food - but that's a huge milestone for him.]

Financially, we're doing well ;). I'm going to update our totals over there on the side momentarily. We're not making our 10G May goal, but that's okay. We've put 2G into the car this year [we did receive a gift of $300 that helped with that]. Our mechanic said it's a great car and should be good to go for another 75K miles or more. We also used about 2200 to refinance the house. We have much better terms and interest rate as well as lower payments. If not for those two, we would have been there. And we're okay with that.

We put the radiator on the car - I posted about that. A few weeks later, the timing belt went out. We called AAA had it towed to a repair shop where Matt knows the owner and... had it fixed. That simple.

This past month, Matt noticed a dark spot of what we thought was oil on the driveway. The boot was toast. We ended up replacing the whole axle, the power steering pump and something else I'm forgetting. A friend who is a mechanic did that for us and we felt really good that, not only did we have the cash, but we were able to help a friend with it. We also had him fix the air conditioner. It's been out for a year and our mechanic friend said that the car - even though it's old enough to drive, a 1992 - is really in great shape.

So far, we've had a healthy year. Our emergency fund is up and our number of emergencies, overall, is down.

I promise... I'll post more! TVGirl... hold me to that!

Medical bills... Part 1

noreply@blogger.com (Carol) — Tue, 29 Jan 2008 03:44:00 +0000

I'm still waiting on the itemized bills from the hospital but here's the early numbers for last year.

Total medical bills: 92,253.57

Most expensive: Christopher - current age, 6 months - 50763.51
2: Matt - 18,812.38
3: Carol - including labor and delivery and wisdom teeth - 15,573.23
4: Maggie - mostly an ER visit/12 hour hospital stay - age 6 - 5010.11
5: Abbie - 1003.67
Least expensive: Emily - age 2.5 - 305.00
[includes dental for everyone but Christopher and Emily]

Our total out of pocket [not including Rx or premiums]: 3291.11

That's .037% of the total.

God is good!!!

Just Fix It

noreply@blogger.com (Carol) — Fri, 04 Jan 2008 01:15:00 +0000

Yesterday, on his way to work, Matt's radiator blew.

We've known since... oh, October or so that it was coming but all the health stuff and then the holidays and everything sort of put it on the back burner.

So what did we do?

Called around, found the best price [Republic Radiator], took it in and said "Fix it."

Do you know what it's like to have something go wrong on your car and just... fix it? We contemplated buying a radiator and Matt and probably his step-dad installing it, but to do so was only about $40 cheaper than having it done. It wasn't worth it. We had the money and just... fixed it.

And that was nice.

Our little guy is doing better still. He's still growing, albeit a little more slowly the last couple weeks. He still [easily] wears 0-3mo clothes, but he rolled back to front this week and about wiggled out of his bouncy seat so that he's now in his exersaucer [but his little feet barely touch the bottom even on the lowest level - literally - if he stretches, his toes just brush it]. Matt's fully recovered and the lithotripsy bill's already been paid for by the insurance.

We got our first call for this Spring's FPU class - that was exciting. We watched a couple of the preview clips last night and it's very exciting. Dave recorded all new DVDs last year with updated info and stats. Even if you've already taken it, I recommended checking it out. You won't need new kits, but new workbooks/CDs are available for a reasonable price. If you're in the area and interested, you can find more information about FPU in general here or our FPU class here.

Merry Christmas!

noreply@blogger.com (Carol) — Wed, 26 Dec 2007 06:27:00 +0000

Okay - technically, it's now the day after Christmas, but what the hey!

MERRY CHRISTMAS!

Things are going well here. We actually had money to spend for Christmas this year - a conscious choice on our part. In years past, we'd be like okay, we'll spend $20 on each other and by mid-December, we'd agree to $50 or $75. This year, we just set the amount higher in November, because we could. And there's no guilt involved!!! We have money in savings and money for gifts for friends and family and so, it's all good! And it won't follow us into January and beyond!!

On a health note: Matt's kidney stone is gone. I about choked when I saw the price for the lithotripsy and am so very grateful for insurance! Again - once all the bills come in, I'll blog about it - I think we're up to about $53G now.

Our little guy is 5 months old today! He FINALLY hit NINE!!! pounds last week! He's actually 9lbs 1oz right now. He's averaging about 4oz a week and we're very happy with that! It's hard to believe that he's old enough for things like an exersaucer or to sit with help or to start thinking about 'solid' foods soon because he's just so small, but he is. I'm breaking out the exersaucer later this week I think.

Once again - I hope you all had a great Christmas and remember that the 'only way to have financial peace is to walk daily with the Prince of Peace' [Dave Ramsey] and that He truly is the reason for the season.

Merry Christmas!

If God cares about the little things...

noreply@blogger.com (Carol) — Sun, 09 Dec 2007 22:09:00 +0000

...then surely He cares about the big things too right?

I know He does, but the confirmation is nice.

Case in point:

This morning - after we weren't actually out of bed until 7:45 - Matt helped me get all 4 kids on the road for church. Now church technically starts at 9 and is about a 15 min. drive usually, but it was icky and rainy this morning, but thankfully, no ice like was originally predicted. About half way through the drive, I breathed a little prayer, "Dear God, please let it stop raining long enough for me to get the kids inside." Now, we do have an overhang at church, but I was by myself and though I'm sure I could have found SOMEONE I had at least a passing acquaintance with to watch the kids while I parked, I'd planned on just parking and walking in unless it was just pouring. Sure enough, about halfway down Blackman Road, a couple blocks from church, the rain slowed to the slightest drizzle. We walked in and stayed almost completely dry. Even had the door held open for us by someone we walked in with. During Sunday School, I happened to peek out the window and saw that it was pouring rain. When it was time to leave, the rain had stopped again.

If He who controls the universe cares enough to make it stop raining long enough for me to get my kids in and out of the car, surely He's taking care of my men - both the little one and the big one.

I've also found that "His grace is sufficient". Every time the last few weeks [and it seems it happens most of the time while I'm in the car with four kids - at least 2 of whom are being quite loud for whatever reason - on the way to church] that I've wanted to pull over to the side of the road - literally or figuratively - and just put my head on the wheel and cry, I've found the oddest thing happening.

Suddenly, out of nowhere, this peace comes over me. You know - the one that passes understanding. And suddenly, it's all okay. Oh, sure Matt still has kidney stones and now 3 kids are being extra loud - including a 4 month old demanding to be fed - but this calm comes over me and I'm able to cope for another 15 minutes until I can drop the kids off in their classes and spend some time with grown-ups, being encouraged and loved on or given dinner or whatever else I need at that moment.

So, yes, God not only cares about the big things, but the little ones as well. He cares intimately about every detail of our lives. That's not to say He's up there pulling on strings and we're simply marionettes, but He does care. And I'm so very glad for that.

Does life ever slow down?!

noreply@blogger.com (Carol) — Sun, 09 Dec 2007 04:22:00 +0000

I knew life with 4 kids would be hectic and 'on the go', but I am so very ready for things to slow down - just a bit.

Matt still has his kidney stone. As of Wednesday, Dec. 5, it hadn't moved - not one little bit - but it was almost 2mm bigger than they said last week - 5mm or so. He's scheduled for a litho something or other on Monday where they'll use soundwaves or something to try to break it up into little teeny tiny pieces. [No, I don't remember what it's called - sad, huh? For me who remembers Nissen Fundoplication with no problems... Not sure what that is? Read November's posts...]

After I posted last Thursday, I went downstairs and heard the water running in the bathroom. All girls denied they'd left the water on and sure enough, the water was off but the pipe coming out of the wall was spraying. Apparently, it had been for a while because the rug was SOAKING wet and the first 6-8" carpet out the door [a good 6ft or so away] was wet. Of course, this was about 10 minutes after Matt left for his evening class and he wouldn't be back for hours. I turned the water off to the house, called a neighbor and seriously considered sitting down and crying.

Our neighbor pulled another neighbor in and the two of them had it fixed in a couple hours. One brought his stuff to solder with and the other went and bought the part we needed. Thank you, Andrew and Tanner!!!!! A huge relief. [This was the day I wrote the post entitled "When it rains..." :)]

Since then, our little guy gained four ounces in 8 days - this is fabulous news! We're very happy about that. However, it seems he may have some sort of genetic anomaly and we have to see some genetic counselor or something from Columbia. It's out of network but because of the weight gain, we won't have to go there - they come here in Jan. Will have to pay out of network deductibles though...

Matt ended up at Urgent Care last night with a possible case of pink eye *sigh*. I'm ready to stop funding the medical community.

Some statements have come in and some have even already been paid by our insurance company. So far, it's closing in on $40G total, but we haven't seen anything from the docs yet - except the anesthesia which came in at $1600 or so. I will detail it once all the bills come in.

After talking to our insurance company, I was right - we will only owe $50 for Matt's ER visit. I think we're up to about 7 or 8 doctor visits at $20 each though. Those were paid for at the time of service... I'm ready to not have those hitting our budget on a once or twice weekly basis... Fortunately, the surgical follow-ups are free. He had one this week and he looked great!

Thank God we have so much paid off and it's not like we're to the point of having to decide between food and doctor visits because all the rest of the money has been paid out.

Most Christmas presents are bought and paid for, no credit used. Bills are paid. Food is bought - hey, we even had pizza last night! The semester ends next Saturday and I'm done on Wednesday. Having that out of the way will be so nice. I'll be done with the last regular set of assignments here in an hour or so [once I get done procrastinating with this blog...]

Okay - I have to stop procrastinating now and get work done. I am so ready for life to slow down, even a little bit, so that I can catch my breath and maybe get some sleep. Sleep... that would be nice... :)

When it rains...

noreply@blogger.com (Carol) — Thu, 29 Nov 2007 21:15:00 +0000

...it pours.

Matt woke me up at 4:30 yesterday morning in so much pain he was shaking like a leaf. his mom came over to get the girls to school/daycare and we headed for the ER. Sure enough, he has a kidney stone. After several hours in the ER, we headed to the urologist, where we sat for 2 hours waiting our turn to be worked in. For now, he has good drugs ad we're giving it a week to see if it passes.

Because we have good health insurance, I am actually kind of looking forward to the bills coming in and seeing what the month of November would have cost us medically if we didn't have it...

There's no place like home!

noreply@blogger.com (Carol) — Sun, 25 Nov 2007 03:02:00 +0000

We're home! For good this time, hopefully. Our son's surgery seems to have been successful. He hasn't spit up once since surgery. We had to stay an extra day, but it seems that things are going well. We do have at least two doc appointments this week alone and he does have to be fed every 3 hours 'round the clock for a while, but we're home!!!

God is so very good!

noreply@blogger.com (Carol) — Thu, 22 Nov 2007 05:41:00 +0000

Our little guy's surgery was this morning. They started an hour later than planned, mostly because he's so very tiny and they had a hard time getting an IV started, etc. The anesthesiologist said that right before they put him out, he looked at each of them and smiled.

Our surgeon said that it went exceptionally well. He was able to complete the surgery laproscopically, which he had told us he'd try but wasn't hopeful about. Apparently, about 8lbs is the smallest you can do surgery like that, and he is just about 8.5lbs. The surgeon said he wasn't going to lie to us, it wasn't easy just because everything they were working with was so small, but that he was very pleased. It went so well that he didn't even put a G-tube in because he didn't think it was necessary.

With all of that, it looks like we'll be able to go home on Friday instead of sometime over the weekend.

We believe that God could easily have chosen to heal him instantly if He wanted, but we also believe that He sends people into our lives to use as His instruments of healing and that's what He chose to do in this case. He gave us a surgeon and the rest of the medical team who know what they're doing and who He gave wisdom to do what needs done.

We do have a road ahead of us - there will still be feedings every three hours for the next few weeks, but hopefully, by Christmas, he'll be eating normally, without having to do the supplemental feedings and so on.

God is so good. Literally.

Thank you all for your continued prayers. They are much appreciated.

Our Son's Surgery

noreply@blogger.com (Carol) — Wed, 21 Nov 2007 00:53:00 +0000

Surgery is scheduled for 8am, tomorrow Wed., Nov. 21.

Prayers are coveted.

More to come...

noreply@blogger.com (Carol) — Sun, 18 Nov 2007 03:31:00 +0000

I wish I had more of a financial blog to post, but I just don't.

Things around here have been beyond crazy.

Two kids have sinus infections - one of them also has a touch of bronchitis and an ear infection. I've got a horrid sinus infection - went to Urgent Care at Walnut Lawn [if you're in Springfield - go to a different one - if you really want to know why, email me, otherwise just take my word for it :)] on Wednesday. Told me it was viral and nothing they could do really. Gave me a couple of prescriptions to help me feel better but not cure me, but neither were working. We came home from the hospital last night [more in a minute on that] and I spent quite a bit of the night throwing up and then again this afternoon. Went to Urgent Care in Republic [LOVE THEM!] and got some different medicine that has helped more in the last 6 hours than the other ones did in 3 days.

I'm also beyond behind on my schoolwork - got a little bit done Thursday and tonight, but the mental capacity needed to grade essays just hasn't been there... Not with the splitting headache [so bad I couldn't see straight] off and on and nausea...

We were in the hospital for 8 days. In those 8 days, our 3.5 month old son had an EKG, echocardiogram, barium test [drink the stuff, watch it go down - he did not cooperate!], ultraounds of bladder and kidneys, Ph probe test [the one we were really waiting on], several blood and urine tests and after the Ph probe, some test where he drank a radioactive isotope and they took pictures to see if his stomach empties right [it does].

The results from the Ph probe were that he has reflux [big shock there] but also told them about the severity etc. The other tests ruled out the possible causes for the reflux, besides that little valve between the stomach and esophagus not working right. He also ran a fever for most of Tuesday and didn't eat for 9 hours, then not again for another 7 or so. He ended up with an IV for that, but only for a few hours.

All of the usual 'fixes' for reflux don't work. Sitting him up for 30 minutes after eating, sleeping/everything else on an incline, etc. - none works. He's spit up at least 3xs in his bouncy seat while I'm working on this post.

In 8 days at the hospital, with everything being strictly measured in and out and beefed up [added calories to the milk/formula], he only gained a total of 4oz. He was also up and down some.

So what now? Tuesday he's having surgery. *sigh* Not our first choice, but the next least invasive option. Hopefully, the surgery will be done laproscopically - that's the plan, but the doc said there's always a chance he'll have to do it the 'old fashioned way'. He's have a Nissen Fundoplication done. Basically, the doctor will wrap the top part of his stomach around the bottom of his esophagus, tightening it so that valve works more the way it's supposed to - things go down and not up. He's hoping he'll be able to do it without having to also put a G-tube in, but that is a possibility. If they don't have to do the G-tube, we'll be in the hospital another 48 hours, if they do have to do one, probably 72.

Surely, with all that medical stuff, we're worried about finances, right? No, not really. We have good insurance through Matt's employer and we've already paid all of our out of pocket expenses for the year, so, in theory, we won't have to pay for any of the last week or for the surgery. We did, with everything else going on, bounce a transaction. We used our debit card MUCH more than normal [over $80 in Rx alone this week - probably closer to $100] and it just got away from me. Two packages shipped to one of our best friends is what did it - I forgot to enter it. The bank did reverse the charge though - that was a huge relief. I knew there was reason I hadn't ordered the wireless network adapters for the TIVOs... Sure enough, good thing I didn't. Payday was yesterday so it wasn't like we were weeks out or anything.

There are many more blessings - some obviously monetary, most not. Our wonderful church hospitality lady has given us food several times over the last week and a half. She's promised us a turkey for Thanksgiving - we'll likely still be in the hospital for part of it, but that's okay- turkey sandwiches are good too! Another friend braved our three [sick] girls for about 8 hours one day so Matt could teach and spend a couple hours with me at at the hospital. Another couple friends came over this morning and took care of the kids while Matt taught and I slept.

We have wonderful doctors and nurses working with us. I know it may not seem like a blessing, but in some ways the continued up and downs of his weight while in the hospital is. It verifies that it's nothing we were or weren't doing that was causing his lack of weight gain. It's in no way a reflection on us [which we *knew* but it's nice to *know*, you know? :)]. We have friends and family around the country who are praying for us and who have put us on more prayers lists and prayer chains than I can even imagine. Once he's recovered and chunked up a little bit, it's quite likely I'll be able to nurse again. The thought of not being able to makes me cry so I'm glad I should be able to.

I should probably have some eloquent statement to sum all of this up, but I don't. God is still good, all the time and that's really all I need to know.

Free FPU Online for Veterans

noreply@blogger.com (Carol) — Tue, 13 Nov 2007 02:18:00 +0000

Thank you from the bottom of our hearts to all our Veterans!

Dave announced today that they are giving away free FPU online to all veterans through the end of business on Wednesday, Nov. 14.

Please do not call about this offer but mail fpuvets@daveramsey.com for more information and details on how to take advantage of this great offer!

Click HERE for more information about FPU online.

noreply@blogger.com (Carol) — Mon, 12 Nov 2007 14:30:00 +0000

Just quick update - I should have a more substantial post later today.

We're still in the hospital and will be until at least tomorrow afternoon. So far all of the tests have come back fine and he's up FIVE ounces since Friday - three since yesterday.

The good news/bad news is that he's virtually stopped spitting up. That's good, but it also means that the doctors and nurses aren't seeing him as he usually is. We don't see anything we're doing differently [except taking him off the meds that keep him from spitting up] so we're not sure why. He's had a good day or two or even three good days in a row before. We're hoping for a normal day today so the test we're doing today will be accurate.

Thanks again for your prayers.

In the hospital...

noreply@blogger.com (Carol) — Sat, 10 Nov 2007 01:51:00 +0000

Find a Financial Peace University class near you

Thanks to those of you who are praying for us. Our little guy has been admitted to the hospital for a few days. He only gained 1.5oz or so this week so here we are trying to figure out what's wrong with him and why he won't gain weight.

Prayers are appreciated and more will be coming soon about FPU and our debt free journey!
Thanks!

Welcome to Debt Free in the Ozarks!

noreply@blogger.com (Carol) — Fri, 09 Nov 2007 04:22:00 +0000

Hey! We just finished watching ourselves on KOLR10! EEP! Always hate seeing myself!

I'd truly hoped to have a lot more on here by now, but if you read the last post, you'll see what life has been like. It looks like our son is going to be in the hospital tomorrow so putting weight on his tiny bones has been our priority this week! [3 months old... hovering around 8lbs...]

Please come back as we post more about our journey to be debt free! We'd love to hear from some of you - success stories or struggles. We hope we can help at least someone on the path to financial freedom!

Matt and Carol
KOLR 10 Spot

God is good, all the time

noreply@blogger.com (Carol) — Sat, 03 Nov 2007 17:11:00 +0000

God is good, all the time...

Today's post is a bit of a departure from finances, though they are mentioned...

Sometimes it's hard to see the blessings…

Yesterday we spent almost 8 hours doing doctor's appointment related stuff. I left the house with our three youngest children about 9:20 in the morning. I returned home with all 4 kids about 4:30. It was a very long day.

Our youngest is 3.5 months old. He weighs a whopping 7lbs 11oz at the moment. He was born in July – 30 days before his due date. He weighed 6lbs 6oz at birth. Over the next 12 days or so he did fine – his weight checks were good, etc. However, that next week I began to notice that it wasn't quite right and, sure enough, when we stopped at the Women's Center for a weight check, he was down to 5lbs 11oz at 19 days. Since then it has been a struggle to keep him going in the right direction.

Two weeks ago he was 8lbs 2oz. Last week, he'd lost an ounce. This week, he was down 6 more. Six weeks ago, they'd finally assigned us a home health nurse to weigh him at home instead of continually going to the doctor's office [do you know what weekly doctor's visits will do to your budget when you're not expecting them?! Or even when you are?] However, after the weight loss this week, the doc's office called and wanted us to come in yesterday, so we did.

I loaded up two girls – ages 2 and 4 – and one little boy and headed out. Matt, unexpectedly, was able to meet us there. It's a good thing he was able to.

They were running about 45 minutes late. Mid appointment, we got a call from our oldest daughter's school – she had thrown up at recess. Matt took the older two and headed to pick her up.

Before he left however, the pediatric nurse practitioner we've been seeing had told us that the other PNP and one of the doctors in the office wanted to put him in the hospital, but that she and the other doctor decided to try a few other things first. We did two heel sticks [the first one coagulated or something so it wasn't good enough to run tests on] and a urine test [he didn't pee until the bag had been on him for an hour and a half].

The good news? The blood tests came back much better than they had anticipated. No urinary tract infection. No hospital for now.

The bad news? If he hasn't gained at least 4oz by next Friday, he will be in the hospital. If he doesn't gain at least 6-7oz he may end up in the hospital.

They gave him another medicine that should help keep him from spitting up as much – that alone should help a lot.

The rest of the good news? Well, we have no more consumer debt. I called about 2 weeks ago and just paid the hospital bills from last summer [an ER visit for me, an ER visit for our 6 year old, his birth and hospital stay]. We have insurance. We've met all of our deductibles so even if he does end up in the hospital, it won't cost us anything out of pocket. I had seriously increased the food budget in light of the lack of debt and medical bills and it was no problem to pull enough out of it for a copay or two. In August, when I'd budgeted for 2 doc visits and ended up with 7-8, I couldn't have taken it out of the food budget because that budget was already so tight. We don't have the specter of debt hanging over us as well as our son's lack of weight gain.

We still don't know what's wrong with him. We don't know if it's something metabolic or if my milk just isn't rich enough anymore – four kids close together and all nursed can do that – or what it is. But we have a wonderful, supportive doctor's office, prayer warriors in our Sunday School class and among the rest of our family and friends, and a God who is good, all the time.

The Baby Steps

noreply@blogger.com (Carol) — Sun, 28 Oct 2007 06:10:00 +0000

It's All About the Baby Steps

As I'm sure many of you know, we have been coordinating Dave Ramsey's FPU at our church for a couple of years now. One of the keys to Dave's program is the Baby Steps.

To get out of debt, Dave and his wife, Sharon, did things this way. They worked for him and have worked for hundreds of thousands since – including us.

So - the Seven Baby Steps are…

Pre Step One:

Okay, okay – before you can take even the tiniest of baby steps, you have to be able to stand up. This is where you sit down and do the dreaded BUDGET! We'll talk more about that another day, but this is when you do it. Once you have it down on paper, make sure all your bills are current. If not, that's your first priority. Thanks to God, we've never been behind on anything [oh sure, the occasional 'forgot to mail the check' but not really]. This isn't our area of expertise by any means, but we'd be happy to try to help if we can.

Baby Step #1: $1000 in the bank.

You might be thinking, "But I have $20,000 in credit card debt, why would I put money in the bank?" The answer? It's "Murphy Repellant". You know Murphy and his law: Anything that can go wrong, will. Just one thousand dollars is enough to catch most emergencies. So first thing to do, put $1000 in the bank. Then when you need a new radiator [like we will soon], you just write a check. You don't have a car crisis and a money crisis at the same time. What a relief!

Baby Step #2: Pay off your debts from smallest to largest using the Debt Snowball.

Have you ever watched cartoons? Remember when one character pushes a little tiny snowball down the mountain and by the time it reaches the bottom, it's huge? Complete with another character or two sticking out of it. The same principle applies here. Write your debts down in order, from smallest to largest. Pay the smallest one off as quickly as possible. Now, take that minimum payment and add it to the minimum payment of the second debt. Now your 'minimum' payment is bigger – it's picked up more snow! By the time you work your way through your debts, that 'minimum' will likely be pretty big. Anything extra you can swing goes here too. A second job or selling some stuff on EBay – whatever extra money you can bring in, toss at your current target.

Baby Step #3: A Fully Funded Emergency Fund – 3 to 6 months of EXPENSES in the bank.

For most people, this is between $10-15,000. Note that it says expenses and not income. What would happen if you lost your job? Sorry, Mediacom – I'm going to have to cancel that cable. And retirement? Well, we probably should stop that for the moment. If you tithe to your church… well, 10% of nothing is… erm, nothing :). So expenses, not income.

Baby Step #4: 15% of your income into retirement.

This doesn't include any matching your employer might do. That's gravy. Fully fund your company's program, up to the matching percentage [for many this will be somewhere between 3-6%]. Then fund your Roth IRAs, if you qualify. Then back to your employer's account.

Baby Step #5: Fund the kids' education.

But WAIT!!! Shouldn't that come BEFORE retirement?!? Nope. As much as we love our kids and hope that we'll be able to provide a college education for them, our retirement has to come first. Either that or we'll be living in their dorm room with them ;-)!

Baby Step #6: Pay off the house early.

Dave recommends a fixed mortgage at no more than 15 years. Don't have one? That's okay. If you already 'own' a home, look into refinancing an ARM or balloon mortgage. If you have a standard 30 year mortgage – send in extra towards your principle. Talk to your lender to make sure you do so properly – some of them have funny rules about how extra principle payments work.

Baby Step #7: Build wealth and give it away!

I think this step is pretty self explanatory and I can't wait to get here!!!

Okay – so where does buying a house come in if you don't already have one? Somewhere between steps 3-5. Get at least 3 months of expenses in the bank, then save up 20% for a down payment. Get a 15 year, fixed mortgage. Depending on how long it will take you to do that – you may want to have retirement going at the same time.

Did we do everything 'by the book'? No, not quite. As I said before, we want to be transparent here – and we will be, but I'll save that for another post. We did a few things a little bit differently, but for the most part, we've stuck to the plan – and it's working! It's working for other families we know. One family we know took the class about 2.5 years ago and now, she's able to stay home full time after the birth of their second child!

So – there you go! Dave Ramsey's baby steps. Make sense, don't they? As Dave says, "It's the same advice your grandmother would give you, only we keep our teeth in!"

Beginning Our Debt Free Journey

noreply@blogger.com (Carol) — Sun, 21 Oct 2007 19:42:00 +0000

Our Debt Free Journey

When we got married, over 10 years ago now, the only debt we had was our student loans. For our 10^th anniversary, all we wanted was to have just those loans and our house left to pay off. In between, we managed to rack up and then pay off thousands of dollars in credit card and car debt.

At the peak, we had close to $20,000 in credit card debt. Today, we have none.

Part of what we want to do with this blog is be transparent. We consolidated $11,000 of that credit card debt into a second mortgage several years ago. We had paid off about $2000 of that when we sold our old house so the remaining $9000 in former CC debt was rolled into our new house – moving the former CC debt from one house to the other.

That said, we paid off over $9,000 in credit card debt plus another $4000 on Matt’s car and about $14,000 on our minivan. We also bought and paid for 4 more cars in that time.

We tried several times to get traction and pay off all of our debt but never could get anywhere with it. Then in June 2005, we were introduced to Dave Ramsey and Financial Peace University.

Our church had started doing small groups that January and several friends had taken the class. They urged us to do so as well [thanks, Jeff and Kristin!]. Some other friends of ours were going to take the course and we wanted to spend more time with them so we decided to do so as well.

June is a tough time for us financially and that year especially so. I teach at a community college and don’t get paid in June. We had just added our third daughter to our family five weeks earlier. We dug down and came up with the $96 or so needed to take the course.

That was, by far, the best financial decision we have ever made.

Through the next 13 weeks, we watched Dave as he walked us through the Baby Steps and beyond.

Since then, we have either paid off or cash flowed over $30,000 in debt and expenses. We finished our last commercial debt in early Oct. 2007 when we paid off the car [that was about 5 months after our anniversary, but a number of unexpected expenses kept that from happening sooner].

Come back soon as we’ll blog about those Baby Steps and how we’re working to get debt free!