Debt Free Friday: Ryan and Micha

by Greg

Here is some local (if you live in Utah) flavor. This fun couple lives in Logan where she is a basketball coach at Utah State and he works in the HR department, also at Utah State. Go Aggies!!*

This couple is awesome, they started their marriage by combining their finances and quickly realized that they needed to change. They chose to work on this project together, making sacrifices and staying on focus together.

I love that Ryan said "I believe people are eating their problems". That is so true. It's really easy to go out to eat, overspend at the grocery store and just waste money on food. That's an area that is easy to cut back on and a place where you can see quick gains.

We watch these debt free screams because they inspire us. We're working so hard to get out from under this mountain, that sometimes it feels that we'll never see the end. But then we watch real people doing amazing things and being free. That gives us hope and encourages us to keep going. We're going to make it and we can't wait for the day when you can google "Greg and Kristen debt free scream"! That's going to be awesome!!

*I (Greg) graduated from USU with a masters degree in HR, Kristen will start their Family Life Studies program soon, we've convinced our 8 year old boy that he needs to study their landscape architecture program and we're working on the other kids. Basically we're trying to raise a family of Aggies!

This Is Water

by Greg

This video is a classic, absolutely makes you think. 

We go through our lives each day and do our routine. We drive the same way to and from work. We sit in the same seats at church and in the lunch room. We eat the same food, watch the same shows and do the same things every weekend. 

We get frustrated if things do not go our way or if our routine is broken. I get frustrated with the ones I love the most. Sometimes I don't think about others and the things they are going through in life. I forget that it's not all about me. It happens to all of us.

I need to step out of my routines and try new things. I need to serve others more. I need to live the golden rule.  I do not know what others are going through, they could have unimaginable struggles. I need to step outside myself and give people the benefit of the doubt.

I am grateful that we have a lifetime to work on our issues, deficiencies and problems. We get to choose how we react to situations. I am grateful we have a Savior that helps make up the difference. I try to follow his example and be more like Jesus Christ, the one perfect example. Sometimes I'm more successful than others but I keep trying. 

I don't need to set lofty goals, I just need to try a little harder to be a little better and it will work out.

   

Debt Free Friday: Tim and Katie

I think it is inspiring when young people have their finances in order. What is really impressive is they realized they were in trouble and even though they weren't making a lot of money they were able to set a goal and complete it. I like how they pulled together, got on a written plan and helped each other to stay motivated. I also liked how they thought of it as a great project to work together on. 

Kristen loves projects. I mean really loves projects. I think if she didn't have a project to work on she would be depressed. Working on this debt free project has really been fulfilling and we have drawn so much closer together as a couple because of it. 

One more thought; they are in their twenties and have no debt. Just think of what you could do with the extra money if you didn't have any debt!! Just think what they can give to people who need it. I can't wait to be in a position to give like that, it will be awesome!

Here is a bit more about their story. Definitely worth the watch. 

Ownership

My friend just got a new car. When they first picked it up, they posted the photos on social media with the caption that said something to the effect of: "This Baby is Mine!!". I am very excited for them and happy that they are happy. I would love to get a new vehicle as well.

Jeep Renegade

But somewhere along the way I have changed my thinking about ownership because of our goal to get out of debt. I started thinking about the phrase, "this baby is mine". There are two possibilities. The first is they have paid cash for the vehicle so they are free and clear of any payments so yes, it belongs to them, it's theirs and YAY! for them. The other option is that they have taken out a loan to finance the vehicle. So doesn't that mean the bank owns their vehicle? 

Am I off on that thought? 

I started to think about things that I have. Do I own them or does the bank own them? When we take out a loan for vehicles, houses, motorcycles, mattresses, etc. the bank holds the title until we pay it off. I'm thinking that the bank holds the title and the majority share until we've paid it off so they own it...

Candelight Homes SnowMass plan

When I think about things in that sense it makes me agitated and want to own the things that I have. I want them paid off so no one else owns them but me. For example I really like our house. We are comfortable in it and we have a great time living in it. We have so many memories that we have from living here. But I can't say it is mine, THE BANK OWNS more of it than I do and that bugs me.

So we will be plugging away on our debts and then tackle the house after that. One of the goals that we have, is that in the very near future we can say the house is officially ours.

If you agree or disagree we would like to hear about it. please respond in the comments below. We appreciate your input and you. Thank you!!

PS- the pictures above are just examples of stuff, not things that we have in our possession.

Who Wants to be a Millionaire?

Okay, yes. The title is a take on the game show from years ago but seriously, have you ever wondered what it takes to become a millionaire, or at least retire a millionaire? A few weeks ago on the Dave Ramsey show there was an entire segment dedicated to exploring the secrets of America's millionaires.

I have always wanted to talk to someone who has "made it". I have wanted to find out what they have done to be successful with money. Dan talked to Dave and explained how he and his wife were able to be successful. He wasn't any different from the other millionaires that were on the show. Here's what I think:

• Dan didn’t average over 100k, most of the time he had a normal income
• He was debt free
• They put money away consistently
• He didn’t inherit money or win the lottery
• They didn’t buy new vehicles
• They lived below their income
• Bought things with cash
• Didn't have student loans

Those that are successful follow the principles found in "The Millionaire Next Door".  They followed solid financial principles that worked for our grandparents and they were consistent. These men and women are also living pretty ordinary lives. You wouldn't pass them on the street and be able to guess their net worth. And you know, that kinda makes me wonder, how many of my friends and neighbors are secretly wealthy? Not because I think that's information we need to share (so don't tell us) but I just wonder if there are more people that are able to live comfortably and give outrageously than we know. That's something to think about.

It takes serious work and dedication to retire with over a million dollar net worth but it's possible. And you don't have to be lucky or somehow special to do it, you just have to focus. Oh and get out of debt, we're still working on that part but we'll get there. I think we can all do it.

Hmmm...

I am not always the best husband and father in the world. Sometimes the kids make me crazy so I yell and get frustrated. Sometimes I make Kristen crazy when I say things or don't do something. I want to be a better husband and father but life happens sometimes. I'm pretty sure I'm not alone either, I think we've all felt like we're doing the best we can and it's just not good enough.

Why does this happen, especially to generally good people who are trying hard to be the best they can? I think it's a lot of things. I know sometimes when I am hungry I am a little uptight and can be more snarky. I might be thinking about something and Kristen or the kids ask a question and I answer without paying attention. It could be what type of mood I'm in right that second. Or it could be Christmas day and the kids are running around and jumping on things from the massive sugar intake. Dealing with the sugar/ activity crash requires serious patience. Those are a few of the things that affect my well being, I know for sure there are a lot of things that affect my state of mind.

But here's what I do know: no matter how deep a hole we are in because of something said or not done, no matter how insane the kids are, basically no matter what, there's hope. I feel that as long as I am trying to do my best and striving to serve those around me, things seem to work out. That is of course as long as we don't stop trying.

We do have to recognize when we did something wrong. We do have to make an effort to correct the problem. If we do those things along with caring about the people around us and trying to serve them. That's when I think we overcome our challenges. That's when we win at life and at our marriages and our families.

It is the same with our finances. Sometimes we get distracted and forget to budget. Other times we feel like we deserve something so we purchase it. I am hungry so I can’t wait five minutes until I get home to make a sandwich. Things happen and life happens. Sometimes it can turn into a big hairy mess (our story) but it's never beyond hope, I have a sure knowledge of that.

If we at least start and if we try to make a budget and pay things off it works out. When we do the best we can with the money God gives us it is certain to work out. Kristen and I have made such tremendous strides this past year and a half. We have paid off so many debts. All because we decided to not let our past mistakes define our future. I know it works. I know it will work for you. Let me throw in a rodeo analogy here; take that leap of faith, grab your financial steer by the horns and wrestle it to the ground!

Happy Friday!! ~Clay's Debt Free Journey

I heard this inspiring story the other day from a man named Clay. No matter how down you are in this life you can get out of it and get back on your feet. This amazing man made restitution to those that he had stolen from. I feel that if we try to forgive others and ourselves, we are well on our way to a great life. I could feel the emotional release when he screamed, it was like we were all there cheering him on. 

I hope we remember that when we get discouraged in whatever we are facing that we fill our minds with positive things. One thing he did to help him was to think of his kids. That inspired him to do the right thing and turn his life around. If we remember the good things in life it is harder to drag us down. Focus on the good and try to repay the bad.

At the end of the day the grace of God is what makes the difference. Clay is an inspiration and an example of what it means for a man's heart to be changed. Pretty amazing.

Here's another video that gives us a better look at Clay's story and some of the things that he did to completely and totally turn his life around. This is one of the good ones.

God loveth a cheerful giver!

Every man according as he purposeth in his heart, so let him give; not grudgingly, or of necessity: for God loveth a cheerful giver. (2 Corinthians 9:7)

I read this scripture and it really struck me. God loves those who give of their time, goods and talents and He REALLY loves those that give cheerfully. One way that we can see this is from all of the blessings and tender mercies that we receive each day. I'm not saying that the only way to get blessings is to give, but it certainly can't hurt to follow His commandments. It says in the Bible that we're supposed to be cheerful when we give, that carries some weight with me.

What does giving do for you? It's a valid question.

Here is what I think it does. Something is changed in you when you give to others. I know I feel it every time I give. I also can see it on others. I think that it makes you more attractive, and I don’t mean physically attractive, although cheerful people usually smile more and that's beautiful. 

Let's talk hypothetical. Say you have the opportunity to buy sandwiches at two sandwich shops. Subs R Us has a jerk working the counter. She makes you feel that you're inconveniencing her just to be in her store. She's angry and she resents your purchase. Over at Subs 4 U the sandwich master is an absolute angel and remembers your name every time you walk in there. He remembers your order from the last time you were there. So tell me, who are you going to buy sandwiches from? The sandwiches are the same. But you might even pay more for them from the guy who remembers your name and your order and smiles. As a matter of fact, on average, you will.

Over time, because of your giving you’re going to end up having the potential to make more money than you would any other way. It's this weird thing that the more you focus on helping people and giving them what they need, you are more successful. You will usually find that as you start making more money, you'll find it’s easier and easier to give, and as you give, you’re going to make more and more money because you’re going to be more and more generous. 

One thing that I have found about generous people they aren't uptight and freaked out and worried about everything. The weird thing is that it actually changes the chemicals in your body. When you’re generous, it releases endorphins, proteins and DHEA. You are happier, and you’re more fulfilled and have a sense of winning you haven’t had before. The contrary is when you’re all stressed out and selfish, cortisol is released, which is the self-produced stress drug. It causes anxiety. There’s a chemistry difference. Isn't that weird? It’s not really that mystical that generous people do better. It’s kind of common sensical.

The point is giving changes you, and that’s really why God teaches people of faith to give. It’s not because he needs your money. He’s God, He doesn’t need money. It’s His. Giving causes success and God loves a cheerful giver!

Citations:
http://health.clevelandclinic.org/2014/12/why-giving-is-good-for-your-health/

Happy Friday! George and Nicole Debt Free Scream

Today's video is amazing! First off is the crazy amount they paid off in only 20 months. $1.2 million. That's a lot of zeros.

Second is, even though they were/ are bringing in a lot of money and are "well to do", they realized they were in trouble and didn't have a handle on their money. It was only when they worked together, budgeted, downsized and sacrificed that they were able to become debt free. 

I love how happy they are during this whole process. You can tell that they are really close as a couple and as a family. Budgeting together and working on a common goal of getting out of debt has changed their feelings toward one another and made them stronger. That is what I want for my family.

Happy Friday!- Cinthya's Debt Free Scream

Every Friday we are going to share stories of ordinary people who have done extraordinary things with their lives and their finances. Most of the videos and stories will come from Dave Ramsey's youtube channel. Every time I watch these they keep me motivated and inspire me to keep going in this journey of life.

This lady is awesome!! When I first saw this it made me teary eyed because of the trials that she went through to get to where she is currently. She is definitely an inspiration to me and helps me to keep the perspective needed to keep going in our financial struggles as well as in life in general.

That is where I want to be in a few years. Watching this woman tell her story helps me have the hope that I need to keep moving forward on this rough journey. I feel that if she can do it with all of the challenges she faced then there is no reason for me to give up.

Wherever you are in your journey through life, whether you've been debt- free forever or you're just getting started, don't give up. Keep moving. When life knocks you down just keep getting back up. That's what matters, as long as you keep moving forward then you're going to be okay.

If you are interested here is more about Cinthya. Her story is incredible and I'm glad she was willing to share.

Look out below!

We recently finished paying off our last Visa card. We had it for over a decade and finally are done with it and closed the account. At the start of this year we had 10 debts that we were working on and grinding out. I am happy to report as of today we have paid off 6 of those debts! What is more interesting is the amount that we have paid off so far for the year is over $10,000. WHAT!! 10k in 4 months how did you do that you ask? Well I will tell you because we like you and hope that you can gain some inspiration from us and change your debt story.

The method we are using is what is called the debt snowball. Just think in your mind about some nice thick snow lying on the ground and what happens to a small snowball as you roll it in that snow. What happens is the snow you are rolling it in starts to stick to it. Now think in your mind what would happen to the snowball if you had it rolling down a hill how fast it would grow.

That is the same type of thing that happens with your money when you list your debts smallest balance to largest on paper. First attack that smallest debt and throw all the money you can at it and pay the minimums on the rest of the debts until it is paid off. Once that is paid off then you focus on the next debt taking the minimum payment of that small debt you just paid off and adding it to the next largest debt and whatever money you can throw on that one. Then you keep going down the list until they are all paid off. The key to it is focus!


If you are feeling like you are out on a lake in a canoe without paddles when it comes to debt start small and focus on one thing at a time. Don't try and juggle 4 or 5 things at once it doesn't work well. For those who are finance geeks don't worry about interest rates on your debts just put focused intensity on one thing at a time and you will have success. Once you have success knocking out the small debt and achieving a victory it will give you momentum to keep going on to the bigger debts. The debt snowball is powerful and I know it works and it will work for you.

That feeling of getting rid of debt is addicting. We were so excited when we paid off that first debt, it just felt unreal! It just got better, every time we paid off another debt we just kept feeling more and more excited. When you pay off each debt in your debt snowball the feeling just magnifies and you start to feel less weight on your shoulders and it is AWESOME!!

PS- our grand total we have paid off since we have started this debt free journey is over $20,000, which just blows my mind.

It's over baby!

You know those people that are always negative and drag you down? Sometimes things are like that too. One of my "friends" has been like that for a little over a decade. At first it seemed like a good relationship. There were rewards and shiny things. I was surprised how quickly that thrill left. Now I feel exhausted after having to deal with them, I can't stand them. I figured out that I AM TIRED OF IT!! 

We finally got the courage and started to distance ourselves from them a few years ago. We still hear from them occasionally and they are still the same: negative, taking, and cold. In a few weeks Kristen and I will finally, after so many years, get to say “We're done Visa, it's over!”. No more of them taking from us, no more dealing with the stress of being a slave to that lender (Proverbs 22:7). This breakup is long overdue.

Don't mess around with credit cards. As smart as you are (hello, you're reading this blog) you're not smarter than the multi- billion dollar credit card industry. Why would they promote a product that would allow you to cheat their system? They wouldn't. It wouldn't make fiscal sense for them. They look shiny and neat and easy to use when in fact they are not user friendly at all! Here's what I mean.

Many years ago, Indian youths would go away in solitude to prepare for manhood. One such youth hiked into a beautiful valley. There he fasted, and on the third day he decided to test himself against the mountain. He put on his buffalo-hide shirt, threw his blanket over his shoulders, and set off to climb the peak.

When he reached the top, he could see forever, and his heart swelled with joy. Then he heard a rustle at his feet. Looking down, he saw a snake. Before he could move, the snake spoke: “I am about to die. It is too cold for me up here, and I am freezing. There is no food, and I am starving. Put me under your shirt and take me down to the valley.”

“Oh, no,” said the youth. “I know your kind. You are a rattlesnake. If I pick you up, you will bite me, and I will die.”

“Not so,” said the snake. “I will treat you differently. If you do this for me, you will be special. I will not harm you.”

The youth withstood for a while, but this was a very persuasive snake with beautiful markings. At last the youth tucked it under his shirt and carried it down to the valley. There he laid it gently on the grass. Suddenly, the snake coiled, rattled, and struck, biting him on the leg. 

“But you promised—” cried the youth. 

“You knew what I was when you picked me up,” said the snake as it slithered away.

A credit card is not your friend! A credit card is not your emergency fund! A credit card is not good for building credit! The card will bite you if you use it and you will be bitten over and over again. I have several friends that say they use the card and pay it off every month, then they always seem to add the caveat "but we got a little carried away the past few months". Now they owe the money and interest on top of it. 

Interest yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you. (J. Reuben Clark in Conference Report, Apr., 1938, p. 103). 

Friends, it is not a good plan to play with venomous snakes. It is also not a good financial plan to play with credit cards, they will bite you! 

What, Christmas is when???

There is an interesting phenomenon that has plagued me for several years. It took me a really long time to figure this out. Are you ready? Here it is.

Why does it feel like Christmas (and birthdays) sneak up on you? I mean, Christmas is on the same day every year!! You might be able to relate and you might have the same problem I had. Why did I not have enough money saved up to pay for all of the gifts I wanted to get? It used to be that I had to do some interesting financing to pay for it or put it on a credit card and pay for last year's Christmas until the next Christmas rolled around. That strategy added to my anxiety during the holidays.

So the question I pose to you is why do we not save money for such occasions? Why do we struggle to save money at all? I think there are several reasons why we are not able to do so. We will discuss a couple of reasons and give some remedies that will hopefully help you.

Reason

The Wall Street Journal did a study and found that 70% of americans are living paycheck to paycheck. That is across all classes; income, skin color, it doesn't matter. That means 7 out of 10 families in your neighborhood are struggling to keep up with the expenses they have. That also means all of their money is going to other places and they can’t put money into savings.

Remedy

What can you do if you have your money disappears each month? The first thing to do would be to create a budget. Put all of your expenses down on paper. This helps you see where your money is going. When we did our budget for the first time it was amazing to see where our money was going and what our spending habits were. Once you see where it goes you can make corrections and changes to how you spend your money. When we made changes to our budget and how we were spending it seemed like we got a pay raise. Tell your money where to go instead of watching it just slip away.

Reason

One of the top reasons for divorce in America is money fights. I will admit I was nervous talking to Kristen about our finances. For whatever reason she was the defacto family budgeter. I did not help her with it and when she worked on the bills she was not a happy person. Finances scared me for a long time.

Remedy

Figuring out how to budget was the first good step we took on our financial journey. To be honest it didn’t happen until we took Financial Peace University back in 2009. The principles we learned in that class really helped us. The first thing that we did was have a budget meeting together. We agreed that we both had to contribute to the budget meeting and we even made and signed a contract to do so. We sat down and made our budget and we got on the same page. I am not going to lie, it was uncomfortable at first but over time it became easy to work together. Once I saw what was going on I wasn't afraid to talk about it. Kristen was also relieved to not be carrying the burden all alone. We can now confidently relate together with money.

Now that we have a written plan our money does what we tell it to do. So this last Christmas we drew a line in the sand and we said "this is how much we have to spend and after it's gone, that's it!" and that was it. Kristen ran out of wrapping paper after the budget was spent and had to get creative with some tissue paper and masking tape and it worked!

We also want for this to be an interactive site so we can help each other. What things have you done to save money? any tips for the rest of us? We would love to hear from you. Also if you are struggling with a money issue we would love to help. We don't claim to know it all but we have learned a lot on this crazy journey. So comment below and let us know what you need or what you would like us to talk about.

PS- did anyone else have a naked from the waist down Christmas tree? The toddler stage, holy cow!

Houston, We Have a Problem

Greg is writing today. It's good to hear his perspective. So Greg, take it away!

Do you remember Apollo 13? NASA had a huge problem bringing three astronauts home after a freak accident to their spacecraft. It appeared to be insurmountable and impossible. 

With underemployment starting at the beginning of 2014 WE HAD A SERIOUS PROBLEM! What were we going to do to fix this huge problem? There was underemployment, student loans coming out of deferment and the other debt we already had. Talk about a big weight that seems to be crushing you all at once.

The group on the ground at Houston and on the spacecraft, Apollo 13 worked together to solve their problem and get the astronauts back home. They had plans and procedures that helped them to resolve their issue which resulted in the best outcome possible. We also needed a plan to get out of the mess we were in, especially one that made sense to our family. 

It is really difficult to come up with something quickly that makes sense and gives you direction. I am not the smartest person in the world so we needed some help coming up with our plan. Luckily we had taken a class through Dave Ramsey several years ago called Financial Peace University. This class taught us the principles we used to keep our heads (barely) above water. The things we learned in that class became our plan. 

So what is this plan and who is this Dave Ramsey guy? If you want more information on Dave go here but I'll give you the five line version: he went bankrupt at age 28 and since then he has been on a crusade to help others be more financially solid. The plan he teaches contains 7 steps. These are not the gigantic "I am trying to walk in my dads steps". These are baby steps, think wobbly new baby. Here they are in order: 


Baby Step 1- $1,000 to start an Emergency Fund 

An emergency fund is for those unexpected events in life that you can't plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, the list goes on and on. It’s not a matter of if these events will happen it's more like when. This should be completed very quickly. 

Baby Step 2-  Pay off all debt using the Debt Snowball 

List your debts, except the house, in order smallest to largest. The smallest balance should be your starting point, pay minimum payments for the rest. Don't worry about interest rates unless two debts have similar payoffs. You're going for quick wins here. But if 2 debts are similar, then list the higher interest rate debt first. Once the smallest is payed off, take all of the money you were paying on that one and add it to the payment of the next one on the list. Then repeat until all the debts are taken care of. 

Baby Step 3 A fully funded emergency fund

Once you complete the first two baby steps, you will have built serious momentum. But don't start throwing all your “extra” money into investments or going back to spending everything quite yet. It’s time to build your full emergency fund. This should be 3 to 6 months of expenses. Make sure you have this so that when unemployment or another emergency happens you will be prepared. 

Baby Step 4 Invest 15% of household income into Roth IRAs and pre-tax retirement 
When you reach this step, you'll have no payments—except the house—and a fully funded emergency fund (can you imagine that)! Now it’s time to get serious about building wealth for your retirement. Don't think you can count on Social Security because if there's one thing the government is known for it's improper money management!  

Baby Step 5 College funding for children 

If you or your kids are looking at college you need to start saving. Helping your children graduate from college debt- free would be an incredible way to start their adult lives. 

Baby Step 6 Pay off home early 

Now it’s time to begin throwing all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. 

Baby Step 7 Build wealth and give! 

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. That's a pretty great way to live!

Download Baby Steps 

Those are the steps to our plan. We have a written budget that we religiously follow and right now we are on Baby Step 2. I am the first to tell you that it is not easy to complete (just read our other posts). But just like that wobbly baby learning how to walk, it gets easier with time and practice. 

The geniuses at NASA had a plan for getting Apollo 13 back home. They followed the steps, they got creative when necessary and above all they never gave up. Kristen and I have a plan for getting out of debt. We're following the steps and working towards our goal. There are lots of long days and a long payback period ahead of us but we are optimistic. It was much worse when we didn't have a plan and just expected to be in debt forever. Now we know there's hope.