Total{ Money} Makeover Update #2

We are on a Total Money Makeover by Dave Ramsey. You can read about our story in my first post...Our Total Money Makeover. I wanted to give you an update.

I am almost finished with his book "The Total Money Makeover". I just can't wait to start so I did just that by starting with the "baby steps". Baby Step #1 is to save $1000 Emergency funds, FAST! We did have a small savings account but not $1000. Dave instructs you to sell your extras, i.e. extra cars, boats, furniture, via Ebay, Amazon, garage sale etc. We had a mini van that needed about $1500-$1800 in repairs and after the repairs it would only be worth about $500. We decided that it was not worth it. So we sold it! Whoo Hoo! We only got $440 for it but HEY!, that's closer to our emergency savings, right? Baby steps remember!

Our only car now is a 2000 Buick Century. We know it needs some work so we thought we would use our emergency funds for some repairs. Before you fuss, the emergency fund according to Dave Ramsey is for unplanned car repairs and real EMERGENCIES! As I stated before, we really didn't have much of an emergency fund. So we spent $89 of our emergency fund to purchase a water pump and a thermostat and a few other little things for the car. (My husband is a back yard mechanic and made these repairs himself. I'm so proud!)

Well, we had a small wrench thrown in our plans. Having the water pump and the thermostat replaced unmasked a much greater problem. Are you ready for the really BIG bad news?! I sure wasn't. Well, after a professional mechanic looked at it, he discovered that we have a blown head gasket or a cracked head. Yep, I said it! Those most dreaded words that any car owner wants to hear. We figured it happened when we went to the Blue Bayou in Baton Rouge, LA. We heard a thump and the car got hot but then ran fine after that. Weird, huh?

The repairs needed on the Buick Century were going to be anywhere from $1500-$1800. These major repairs my husband couldn't do so it was going to cost a lot more. My dh has been saying for months that we just need to get another car. I have been encouraging him to please just make the needed repairs so that we could keep it until we were credit card debt free. Which will be January 2014. (I know, right? I'm so excited) I just didn't want to get into any more debt. I was fine driving the "green gobblin",( as my kids called it) that only had 1 hub cap. I was willing to live like no one else, so that we could live like no one else...DEBT FREE!

The mechanic actually suggested to us that we get another car. He said that once a head is cracked or a gasket is blown it just creates so many more problems and that a car with over 150K miles was just not worth the investment. This is just what my husband wanted to hear. We went home just feeling hopeless. My plans of being debt free seemed to just fall away so quickly. All I could see what $$$$$$ and more money going that coming in. We went to bed praying for God to lead us in the right direction for purchasing a used car(Which we had been doing for about a year). He did just that. I will tell this story in detail on another post as I like to try to keep my post short.

So to keep it short, HAHAHA! we got a used 2005 Toyota Highlander with only 42,000 miles and $4,000 under Kelly Blue Book value! AHHHHHHHHH! (That's me screaming) We are so excited. Yes, we are in debt $13,000 more but what were we to do? We had to have a car. How else was my husband going to get to work? At least we did take Dave's advice and get a used car instead of a new one. And with our snowball debt we will be able to pay this thing off in a couple of years instead of six.

God is so good and He knows just what we need and want. Yes, he is concerned about our wants as well. He's our Daddy!

Be sure to look for my post about our new SUV.

Until then, be safe and live DEBT FREE!

~dee dee~

Our Total {Money} Makeover

Ever heard of Dave Ramsey? If you've lived long enough I'm sure you have. He is the author of "Financial Peace", creator of "Financial Peace University" and "The Total Money Makeover". He is stationed out of Brentwood, TN. He has many years of business and life experiences. One of his favorite quotes I love is "Don't take advice from broke people". So true.

In his latest book "The Total Money Makeover" he gives a step by step plan to become debt free. DEBT FREE! (That's me screaming) Those two words excite me. I want to be debt free again.

We had been debt free except for school loans about 4 yrs ago. After moving to Mobile, AL from Chattanooga, TN we accumulated a lot of debt. Our income had changed several times drastically for the worse. We used credit cards to make every day purchases. We maxed them out! We found ourselves not even able to make the minimum monthly payments. Well, you know what that means. More fees, more fees and more fees which drove up our balances and forced the department store credit cards to close our accounts due to non-payment.

It's amazing how much can happen in 4 yrs. We've gone to being just about debt free, with a savings account and a very good high credit score to being in debt over $20,000, no savings and a very bad credit score.

You talk about troubled times?! I can't even begin to explain the stress we've had on us. As a stay-at-home, home school mom, I've questioned many many times as to whether or not I should go back to work. We tried to figure out how I could work and continue to school our children. We would pray and hear from God that I was to continue schooling at home. But our financial situation seemed to get worse. As more physical and financial challenges would appear, we would question again whether we should put our kids in school and I go to work. I had tried several "work at home" businesses and all failed. As a matter of fact, several opportunties put us in much more debt. I found myself so stressed with our finances and homeschooling that I could not take on one more thing. So much so that I became physically sick with bleeding ulcers.

My faith was shaken, our marriage was strained, I was short with my kids, and we shut just about everyone out. (That's a coping mechanism of mine) On top of our financial situation, I was dealing with previous hurts from a previous pastor. (You can read a little more about this in my "Blogging for Confidence #1" post). Lynn was making more money than he ever had before. So where was the money going? I had to know!

After spending some time in prayer, I remembered Dave Ramsey. We had not taken any of his classes before. Lynn had read "Financial Peace Revisited". So, I did an online search and found his website...www.DaveRamsey.com. There is so much info there. I immediately went to "The Total Money Makeover" section. He has several tools available. Like, the Debt Snowball and Budget helps. We've always lived by a budget. This was not new to us. But the Debt Snowball was something I was very interested in. I added all our debts and was so overwhelmed with how much we had. I really had no idea. It helped to have one place to put everything. I was excited to see that we will credit card free by January 2014. And we should be totally debt free by May 2017. (I think we will debt free sooner than that)

I ordered "The Total Money Makeover" book and envelope organizing system. I was ecstatic to hear about his envelope system because that was the system I had used 4 yrs before to get us out of debt the first time. So cool, huh!?

We sat down last night to revamp our budget "Dave" style. Dave says it will take about 90 days to get all the budget bugs worked out. Most of all, reading his book "The Total Money Makeover" will change our mindset about money. He has a totally different way of thinking that is not the world's way of thinking. You've got to read it.

I am confident that using Dave's method, we will be free to do so many things that we've always dreamed of dong. Plus, I just think that it will probably boost my self confidence as well. Please check back often as I continue to blog about our becoming debt free experience.