We pay cash for everything. Seriously everything. Now we have not been completely faithful to this, but we are trying. After a couple of set backs, we are back on board. We are not debt free (student loans, house, credit card) but we are on our way to being there. We stopped using the credit card a long time ago, and most recently, we bought a new to us Dodge Caravan with CASH.
Kris and I went through Dave's Financial Peace University and loved it. But, I must be transparent and will say we struggle with it. We are horrible at making budgets / sticking to budgets. We are horrible trying to use the "cash envelope" system (we do use cash, cash in the form of a debit card NOT a credit card), but it has changed our way of thinking.
Our latest big purchase, the minivan. I had an Alero that my parents generously gave to me when graduating college. Ever since Natalie was born (17 months ago) we talked about getting something bigger. It still beats me how such a little person takes up so much room. After lots of talk and no do, we sunk some money in to the Alero, got it as mechanically sound as it was going to be, and took the plunge and listed it on Craigslist. During our time taking the FPU classes, we were taught about buying and selling big purchases, cars, houses, etc. We priced the Alero a few hundred above what we would take to allow room for negotiating. Low and behold, we sold it for the asking price. 2 days later, a KILLER deal showed up on a minivan. We snagged it for $700 under KBB and paid $150 less than what we sold the Alero for. THAT is a Dave Ramsey Deal (and a God deal)!
All of that was done through craigslist which brings me to my next point. We LIVE off of craigslist. Seriously. If you want to follow Dave's plan, you'll become best friends with craigslist. Our house is furnished from it (including the house itself). Furniture, piano, baby furniture, baby toys, macbook, appliances, tools, animals, farm equipment, we've bought it all off of there. You can save so much off of buying used, and some of it is new! (and you can make money selling stuff. We bought a $50 love seat and a few years later sold it for $250) You have to know what to look for and what the going price is.
The key is to live within your means. We don't have a large income, but can provide for our family's needs. We don't have nice vehicles, nor expensive clothes, or go on huge vacations. But, our vehicles are paid for, we don't have looming payments, and when we do go on vacation, we have good memories of it, not memories of having to pay it off 1 year after we went on the trip.
I encourage you to read Dave Ramsey's book Total Money Makeover and look into the Financial Peace University.
This post couldn't come at a better time for me. We struggle Immensely with budgeting. I haven't used a credit card in over a year or so either, but def am still making payments on it. I am paying off a huge divorce loan (which includes my car) and now have a ton of medical debt from my surgery in Jan. I should do some research on Dave Ramsey... I have heard of a quite a few people who use it and love it :)
ReplyDeleteAww I'm so glad it touched you! We are far from debt free, and struggle monthly to make ends meet, but we do it. The first step to paying off debt it to stop creating it! Stop creating it and then little by little, payment by payment, it'll go down.
ReplyDeleteI would suggest reading Dave's Book Total Money Makeover. I think I snagged mine used off of Amazon for $10 or less. Kris wanted to read it, but doesn't like to "read" so we also downloaded it on our ipod and listened to it on a trip up to IL.
Oh, I forgot to mention that there are instances that you can not control, medical bills, etc. We are paying off a medical bill too. But according to Dave's plan, eventually you'll have your debt paid off and such a huge savings to cover those big road blocks in life.
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