In 2008 I was 21 years old and was introduced to budgeting for the first time. I had never been taught the concept of spending your money before you make it, or properly planning for categories.
When we got engaged in 2006, there was no debt in my name. Less than two years later we purchased a condo that was plummeting in value; we closed on that property the month the real estate market peaked. We purchased a brand new vehicle and a barely used vehicle. We financed tens of thousands of dollars in student loans and we opened some credit cards. In retrospect it was a series of foolish decisions, but in the moment it all felt very normal. When I sat down for our first Dave Ramsey financial class to learn about budgeting, we had a negative net worth that exceeded $120,000.
We finished the course but to be honest, we didn’t implement any of it. We were so far into debt and still not finished with college that it felt hopeless. We didn’t see a way out. We dabbled in the cash envelope system, but were too disorganized to follow through with it. If one category ran out of money we would just take it from another. And we couldn’t keep up with the receipts so had no idea where the money was going.
The lessons from the classes did not fall on deaf ears. We managed to short sale our condo to drop that debt and sell both cars to buy beaters, which knocked out about half of the debt. But we weren’t willing to part with the credit cards. We bought into the “points” concept and thought we were better off swiping for everything. Without a budget telling us what we could spend, this led to immense business debt because we justified so many purchases as a “need” for the business.
Our financial stress began to end when I started listening to the Dave Ramsey podcast. I heard story after story of people who were just like me. I was far from alone. I learned about the app EveryDollar and downloaded it. This one single habit of using this app was the game changer in our financial lives.
We synced the app to our bank accounts. We got rid of all the credit cards and only use the debit cards. We spend the money on the app prior to our paychecks coming in. We agree on our financial priorities and then follow through. We have paid off over $30,000 in student load and credit card debt this way.
We would be debt free probably 18 months ago if I hadn’t gotten pregnant. We cash flowed some home projects to get ready for the baby and then started spending more on childcare than our mortgage. So it slowed down our progress, but MAN we are SO CLOSE to being debt free. We’ve been using the app for three years and it’s hands down the best financial habit in our lives.
Setting a monthly budget and then reviewing it weekly has brought so much peace into our lives. We have alleviated so much stress over fighting about where the money went, verses planning together where it will go. We have control over our finances verses feeling like we are constantly surprised by every car repair or annual renewal.
I cannot recommend the app EveryDollar or the Dave Ramsey podcast, books and courses highly enough. They will change your life….for the better.