The first step was to build up a $1000 emergency fund. We did this fairly quickly and there were several times over the past 6 years that we had to use part of that and rebuild it to $1000. I believe we started with $56,000 in debt at that point (not including our mortgage). Much of this was credit card debt, student loans, and a truck payment. Dave Ramsey's plan is called Debt Snowballing. That means you start with the smallest debt first, pay it off, and then roll that payment amount into the next smallest debt. As you go, this payment amount grows, making much larger payments on the bigger debts.
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In that past several months, we've been working on our final debt...my Sallie Mae student loans. I'm proud to say that I made the final payment this morning. We are officially debt free (not including our mortgage)! This is HUGE! I have to admit, though, that this would not have been possible without God's provision in our lives. My family's every need was provided for in these past five and a half years! Were there times when it was tough? Absolutely! But God provided! During these years, I was even able to go on two missions trips to Africa because God provided funds for this.
Dave's plan has further steps like building the emergency fund to 3-6 months income, investing, college planning for kids, etc. We will eventually get there, but with out vehicle being 10 and 11 years old, we want to start putting money aside for a future vehicle purchase. The biggest thing we're going to do now...Tithe 10% back to God. We've been tithing about 4-5%. We're in a position now to give back the full 10% God has required of us! Blog Gadgets