After 20 months of following Dave Ramsey's program and being committed to his "debt snowball" idea, Ryan and I are officially DEBT FREE!!! AHHH!!! Generally, people call into his radio program to scream "We're debt free!!" but I'm just going to use our blog to celebrate. It is a very exciting day in the Abell household. Within the past twenty months, we paid off our flat screen TV, Ryan's 2004 Jeep Grand Cherokee, Ryan's student loan from Hanover, my 2007 Honda CR-V, and my student loan from Indiana University (made the final payment this afternoon). The grand total was a little over $75,000!!! Now all we have left is our mortgage, and Ryan is going to talk to someone very soon about refinancing so that we can get a lower interest rate and put even more money toward our next steps.
You're probably wondering what those next steps are for us. Well, here are the Seven Baby Steps to Dave Ramsey's program:
1. $1,000 emergency fund
2. Pay off all debt with the debt snowball
3. 3 to 6 month emergency fund
4. Invest 15% of income in Roth IRAs and pre-tax retirement plans
5. College funding (for Noah)
6. Pay off your home early
7. Build wealth and give
We have about 4 1/2 months worth of an emergency fund saved up as of now. This would allow us to keep our current lifestyle of satellite TV, cell phones, internet, entertainment money, personal money...basically, all the extras. We need about 1 1/2 more months worth to put into savings, and we'll be ready for Step 4.
This program has really changed our way of life. It has given us good directions and guidelines for our spending. God has blessed us in so many ways, and we are so grateful.