Finding Peace: Living Debt Free After Near Financial Ruin

Achieving financial freedom has been a very important goal for me and a lesson that was learned the hard way.

Like so many other families I knew while growing up, using credit cards was a normal and accepted part of life. Adults around me frequently spoke about the importance of building one’s credit and having a high credit score. When I was eighteen, I remember credit card companies hanging out at the mall, the beach, and university campuses offering a gift with each credit card application. I, like so many other kids my age, was suckered into wanting a free tote bag or hat. I mean, who could say no to that? Not me.

It seemed as though having credit cards was some sort of rite of passage. I remember being so proud of the credit cards in my wallet.

Fast forward to my mid-twenties and my undeclared philosophy became: if you don’t have the money, just charge it. After all, isn’t that what credit cards are for?


Shopping: charged it.

Going out to dinner with friends: charged it.

Weekend getaways: charged it.

Christmas gifts: charge, charge, charge.

In fact, my husband and I also financed most of our wedding and honeymoon.

So, there we were: a married couple with dual income and no kids. Ideal, right? Well, not necessarily. Unfortunately, we found ourselves with a hefty monthly mortgage, two car loans, a school loan, and increasing credit card bills. Forking over $500+ a month to credit card companies became ingrained in our system and a regular part of life. No biggie. After all, we mastered the art of working and paying bills. And this is how we lived for years: charge, pay, repeat.

We were a creditor’s dream.

Meanwhile the word savings was nowhere in our vocabulary.

As thirty-year-olds, all seemed right in the world until one of us lost our job and we went from two incomes to one. We were fine for a while until the bills started mounting up. Suddenly, we barely had enough money to make ends meet. We paid as much as we could, which meant paying the minimum monthly payment on everything. However, next thing you know, interest rates contributed to skyrocketing balances and we found ourselves with over $100,000 in debt caused by credit cards and my school loan alone, never mind our ridiculous mortgage and two car loans. WE WERE DROWNING: sinking further into the abyss of financial ruin and on the verge of having to declare bankruptcy.

Then one day, while conversing with one of our neighbors, she asked if I had ever heard of Dave Ramsey, an author and radio host who educates and empowers people on living a debt-free life. I had not heard of him, but the more she explained his philosophy, the more I was intrigued. I purchased his book, The Total Money Makeover Workbook, and got to work. Dave Ramsey’s principles opened my eyes to a way of living I’d never considered before. Simply put: if you can’t pay cash, you can’t afford it.

Dave helped us realize that we couldn’t afford anything.

The first step we took was selling my car. I can’t believe I’m going to admit this, but my car payment alone was over $800 a month! (Yes, I was somewhat insane).

To avoid bankruptcy, we started working with creditors using Dave Ramsey’s Debt Snow Ball, which encourages paying off debts from smallest to largest. It took us a while, but in 2012 we paid off Jesse’s car loan and in 2013 we paid off all our revolving debt! We were thrilled, yet the journey wasn’t over. I still had my school loan with an outstanding balance of $47,000 (ugh!).

Over the years, I purchased and read many of Dave Ramsey’s books, including The Financial Peace Planner: A Step-By-Step Guide to Restoring Your Family’s Financial Health and More Than Enough: The 10 Keys to Changing Your Financial Destiny.

I also purchased Dave’s Financial Peace University, an in-home study kit with DVDs, books, worksheets, and more to help us budget, become debt-free, and plan for the future. On Monday nights, or what Jesse and I call “Manifestation Mondays,” we would watch one of Dave’s DVDs, take notes, and implement his teachings. We created a strict budget clearly allocating every cent we earned to know exactly where our hard-earned money was going. If we didn’t budget for it, we simply couldn’t do it, which frequently resulted in having to decline numerous dinner/vacation/play date invitations from family/friends, etc.

Dave’s Financial Peace University stressed the importance of the following 7 Baby Steps to Financial Peace:

Baby Step 1: $1,000 cash in a beginner emergency fund

Baby Step 2: Use the debt snowball to pay off all your debt but the house

Baby Step 3: A fully funded emergency fund of 3 to 6 months of expenses

Baby Step 4: Invest 15% of your household income into retirement

Baby Step 5: Start saving for college

Baby Step 6: Pay off your home early

Baby Step 7: Build wealth and give generously

Over the past 6 years, Dave Ramsey’s philosophy truly helped change our lives. He taught us how to be financially responsible and how to stay focused on our goal of achieving financial freedom.

Today, I can proudly say that we are debt free! We have officially paid off all our debt, including credit cards, car loans, and my school loan. Our personal philosophy has changed from if we don’t have the money, just charge it to if we don’t have cash, we can’t afford it.

We no longer believe in credit cards and refuse them every time we’re offered a new application.

Don’t get me wrong, we still love to spoil ourselves and often splurge on things that would make Dave Ramsey frown, but everything we purchase is paid in cash, including my car, our travel trailer, vacations, Christmas gifts, and random splurges.

And although we are just now entering Dave Ramsey’s Baby Step 3, the most important thing that debt-free living has done for us is given us a sense of peace regarding our finances and our future.

And for us, there is no better feeling than being at peace.

Wishing you peace, love, and adventure,


PS: Dave Ramsey is a faith-based financial advisor. Jesse and I consider ourselves more spiritual than religious, so at times, Dave’s teachings can be a little preachy. If religion turns you off, Dave Ramsey’s books and courses may not be for you.

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