folks who did it - and how they did it - They got themselves completely out of debt (including the mortgage). Real folks like us taking on the challenge to live within their means. I love it!For the Oregonians reading this, He will be doing a live event in Portland, OR at the Colliseum - He's extremely entertaining - teaching Godly principals to our money 
management and some of the many errors in our suppositions. So if you are reading this thinking, "There is no way! I can't even begin to make this a goal. This is crazy thinking!" you might benefit from peaking at his website and maybe going to a Financial Peace University Class or this Live Event in Portland so that you can see the benefits to it and the "how" behind it and the Godly reasons behind the "why" of it all.
With the insights he taught us, we aggresively dove in to pay off our truck, car, thousands of dollars of medical expenses, and trailer payments. In one school year, we pulled $10,000 from our budget and accomplished this goal by simply being intentional with each dollar we spent.
Now, we are aggressively hitting our mortgage. We are in our early 30s but our goal is to own (not OWE ON) our house in 5 to 7 years. We have a real plan for this (which mainly centers around Simplicity) to truly accomplish this. Our house is on the market - if it sells,we plan to go smaller and simpler as that is truly what we can afford (although lenders are willing to lend us over $300K, but they don't really care how stressed that would make us) - if it doesn't sell, we are going to up payments so that in about 5 to 7 years, we own it. Dave Ramsey's perspective was hard to swallow at first - he is strong about his beliefs, but backs them up with God's word. The current crisis is because broke people tried to buy too much. (says Ramsey: "Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their subprime mortgages. DUH. No wonder they went out of business. Stupid decisions." )
We, in America, have been duped into this 30 year mortgage propaganda - truly, our new realization is this: if we have to spread payments out over 30 years to own this house then we are buying OVER our Wage and this is not being good stewards of our cash.
What I seek to do on this blog is touch on all areas of life that help us be balanced - spirit, mind, andbody - and finances fit right smack in the middle of all of this.
We did not take out an equity loan or refinance our house to pay off debt (that is NOT paying off the debt - What that is is taking the 5 year loan on the car out to 30 years inside of a mortgage payment) - what we did and continue to do is seek Simplicity, buy less, buy local, and live our Wage. It is so freeing to be down to simply a mortgage payment and I can't even imagine how free it will feel to be able to live without a mortgage or rent payment.
management and some of the many errors in our suppositions. So if you are reading this thinking, "There is no way! I can't even begin to make this a goal. This is crazy thinking!" you might benefit from peaking at his website and maybe going to a Financial Peace University Class or this Live Event in Portland so that you can see the benefits to it and the "how" behind it and the Godly reasons behind the "why" of it all.With the insights he taught us, we aggresively dove in to pay off our truck, car, thousands of dollars of medical expenses, and trailer payments. In one school year, we pulled $10,000 from our budget and accomplished this goal by simply being intentional with each dollar we spent.
Now, we are aggressively hitting our mortgage. We are in our early 30s but our goal is to own (not OWE ON) our house in 5 to 7 years. We have a real plan for this (which mainly centers around Simplicity) to truly accomplish this. Our house is on the market - if it sells,we plan to go smaller and simpler as that is truly what we can afford (although lenders are willing to lend us over $300K, but they don't really care how stressed that would make us) - if it doesn't sell, we are going to up payments so that in about 5 to 7 years, we own it. Dave Ramsey's perspective was hard to swallow at first - he is strong about his beliefs, but backs them up with God's word. The current crisis is because broke people tried to buy too much. (says Ramsey: "Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their subprime mortgages. DUH. No wonder they went out of business. Stupid decisions." )
We, in America, have been duped into this 30 year mortgage propaganda - truly, our new realization is this: if we have to spread payments out over 30 years to own this house then we are buying OVER our Wage and this is not being good stewards of our cash.
What I seek to do on this blog is touch on all areas of life that help us be balanced - spirit, mind, andbody - and finances fit right smack in the middle of all of this.
We did not take out an equity loan or refinance our house to pay off debt (that is NOT paying off the debt - What that is is taking the 5 year loan on the car out to 30 years inside of a mortgage payment) - what we did and continue to do is seek Simplicity, buy less, buy local, and live our Wage. It is so freeing to be down to simply a mortgage payment and I can't even imagine how free it will feel to be able to live without a mortgage or rent payment.
- God can use us so much more when we aren't strapped to working non-stop just to pay that bill, but are freed up to do things like A. long-term missions, B. more time with our family (joy joy joy!!), or C. Give more.
- Another reason we did not take out an equity loan or refinance our house to pay off our debts is that this practice does not work on the fundamental issue - overspending. It doesn't help us redirect our budget so that we can make our expenses fit within our (small) teacher's salary! By working to pay off loans, we taught ourselves how to live our wage, live within our budget, and be empowered by spending habits that lead to financial freedom, not controlled by debt.
It requires a divorce from our incessant craving of "stuff". (Head on over to http://www.storyofstuff.com/ to watch a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns. The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world. It'll teach you something, it'll make you laugh, and it just may change the way you look at all the stuff in your life forever.)
Check out http://www.daveramsey.com/ for tips on saving on groceries, buying a car (cash!!), and cell phone hidden expenses you can avoid.
Over the past month, we’ve witnessed the largest bankruptcy in history, the stock market dropping like a rock, and the talking heads on TV freaking out that the world is coming to an end. I’m here to tell you the truth—we’re going to make it. We’re going to be fine. Take a chill pill.
This month I’ve compiled some of the most-asked questions I’ve gotten recently from you:
Are we okay, Dave?
Definitely. Remember Enron and WorldCom in the recent years? We survived that. But much worse than all this was the financial crisis of the ‘80s – S&L collapse and 1,000 bank failures in 2 years. We’re nowhere near this type of thing; that was probably 50 to 100 times worse than all of this.
What does all of this come back to?
Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their subprime mortgages. DUH. No wonder they went out of business. Stupid decisions.
Is there anything we can do to fix this bailout mess?
YES! Here's a quick summary: Companies that had billions in subprime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up.
This is an absolutely huge deal, and it involves everyone getting in touch with their congressperson before we spend hundreds of billions of dollars that we don't need to! Learn more
Will the collapse of businesses and banks affect me?
No, not unless you work there. Thousands of stock brokers on Wall Street have lost their jobs in the past few weeks, but that happens in other industries across the country in good and bad times. This time it just happened in NYC where all the national news media is so they made a big deal of it.
Should I sell my US stocks to buy gold and foreign stocks?
Absolutely not! Why would you think foreign stocks are any better than US stocks? Again, diversify your money in good growth stock mutual funds instead.
What practical lessons should small business owners learn from these bank difficulties?
When you have no cash, you freakin’ go broke. You must keep some cash on hand, no matter what kind of business you have. Give yourself some wiggle room where you can take a hit and still be standing.
Remain calm, America. We’re in a slow time, but just pay your bills and you’re going to be fine.
Definitely. Remember Enron and WorldCom in the recent years? We survived that. But much worse than all this was the financial crisis of the ‘80s – S&L collapse and 1,000 bank failures in 2 years. We’re nowhere near this type of thing; that was probably 50 to 100 times worse than all of this.
What does all of this come back to?
Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their subprime mortgages. DUH. No wonder they went out of business. Stupid decisions.
Is there anything we can do to fix this bailout mess?
YES! Here's a quick summary: Companies that had billions in subprime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up.
This is an absolutely huge deal, and it involves everyone getting in touch with their congressperson before we spend hundreds of billions of dollars that we don't need to! Learn more
Will the collapse of businesses and banks affect me?
No, not unless you work there. Thousands of stock brokers on Wall Street have lost their jobs in the past few weeks, but that happens in other industries across the country in good and bad times. This time it just happened in NYC where all the national news media is so they made a big deal of it.
Should I sell my US stocks to buy gold and foreign stocks?
Absolutely not! Why would you think foreign stocks are any better than US stocks? Again, diversify your money in good growth stock mutual funds instead.
What practical lessons should small business owners learn from these bank difficulties?
When you have no cash, you freakin’ go broke. You must keep some cash on hand, no matter what kind of business you have. Give yourself some wiggle room where you can take a hit and still be standing.
Remain calm, America. We’re in a slow time, but just pay your bills and you’re going to be fine.
2 comments:
Good job on your spending plan, you guys have done a tremendous job!
www.diaryof1.com
I like Dave Ramsey-alot! Sounds like you guys have a done a good job following his advice. I know you're glad-during this uncertain time.
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