Let's Review, Class

Lately I've been getting a lot of messages about how I became debt free. (Recap for those of you who missed the first quarter of the game: I paid off $50,000 in a year and half.) From our conversations, I'm noticing that many of you are sick and tired of being up to your eyeballs in debt, and you're ready to roll up your sleeves and get serious about paying off your loans.

So here it is--a crash course in becoming debt free. *Remember, I am not a financial advisor, I am an English teacher. If you want fo' rizzle advice, you should seek the help of a trained professional.*

1. Dave Ramsey- This man was instrumental in getting me out of the gate. I read his book, Total Money Makeover, and learned how to budget. There are seven steps, and even today, I am working those steps (I am currently saving for retirement). While you are more than welcome to go out and buy a copy of his book (it's really terrific), I found my copy at the library because I didn't have enough money to buy my own personal copy. The month I read Dave, I had literally counted out pennies to have enough money to buy groceries (personal low).

2. Mint.com- This little gem of a website is a great way to track where you spend your money. I used it for three months before starting Dave Ramsey to figure out where I was bleeding cash money. Answer? Barnes and Noble. Yes, I was a little bit ridiculous with my book and magazine purchases there for awhile. Mint allowed me an honest look at my finances because, after all, those cool little pie graphs don't lie.

3. Recognizing a "Need" from a "Want"- I want lots of things. I want new clothes, I want to go on vacation, I want to decorate the walls of my house, but I only need three things: food, shelter, and water (and I'm not talking bottled Dasani). I stopped eating out all together, and cooked dinner every night. My big secret? Meal planning. I stopped wastefully spending money on groceries and made each penny count. I clipped a few coupons, but honestly planning out my meals and buying only those ingredients was what kept my budget in check. Grocery shopping became a game for me. I wanted to see how well I could eat for under $50 a week.

4.Every last cent- I put every free dollar toward my debt. I did nothing that required money for a year and a half, and you know what? I became happier. I stopped focusing on what I didn't have and focused on what I did have. I cultivated a true heart of gratitude during this period, and I saw firsthand what God can do when we're willing to do a little work ourselves.

5. Take advantage of free things- We live in a country where we pay a butt load of taxes. Take advantage of the few good things they provide for us. My library became my new best friend. I borrowed books, magazines, and movies from the public library instead of buying them. I also spent a lot of time walking the trails at the park and even took up a little disc golf during this time period.

Paying off my debt was difficult. There were many times when I wanted to give up, but I kept pushing through. Like losing weight, if you want to see results you have to do something radically different. Being debt free has been such a blessing to me the past nine months. I will happily tell you about the benefits of being debt free in my next post, so stay tuned.

Oh, Hi Networth. You're Cute.

Getting divorced is expensive. I highly don't recommend it. It took a few months for me to get back on my feet, what with the fee to turn on my electricity, buying a bed, putting a deposit down on an apartment. Gah! I felt like I was bleeding money.

Slowly but surely I've been socking a little money away each month, and I've finally got a small sum in my checking account as an emergency fund. It's not 6-12 months worth, but it would get me through a few months if necessary. And this week I did the one thing I desperately wanted to do before my 25th birthday: I started my Roth IRA. I chose to invest in a target fund through Vanguard. I've watched the target funds for about a year now and finally decided to give it a go. Since learning about investing, I've decided to take this lesson to heart: time in the market is better than timing the market.

So now I am $1000 closer to retiring when I'm 55. I'm closer to having that river/lake/beach front property to enjoy, to traveling through Europe DEBT FREE!

Financial goals for the remainder of the year? Pay my brother back the cash fundage he let me borrow when the Big D went down. My other goal is to have my Networth hovering around $9,000 by Jan. 1.

Top Five Lessons I've Learned While Becoming Debt Free

This month I will complete my journey to being debt free. I cannot believe I'm here. I thought it would take me ten years to pay off Sallie, but the freedom is just around the corner. The reality sunk in last night when I was talking with my husband. In fact, I was almost giddy with excitement. Anyway, as I talked with Mr. J about the end of our journey, I came up with a top five list of lessons I've learned while becoming debt free. Here they are for you to peruse:

1. Contentment is everything. Before we got serious about becoming debt free, I complained about what I didn't have. The third month into the budget, I realized something very important: I have everything I need. What a novel concept! I have a home, I always have food, and I have clean running water. I know it sounds cliche to say that some people don't have these essentials, but the fact of the matter is that it's true. There are people all over the world who struggle to put food into their mouths everyday. The fact that I don't have a flat screen t.v. in my house pales in comparison to their lack of nutrition.

2. Get busy living your life. The summer of 2009 was a big year for me. I graduated college. I moved back home. I got my first "real" job. I married my honey. Unfortunately, amidst all these wonderful things, I was feeling a little blue. I had no friends. All of my friends from college had gone home, and all of my friends from home had moved away. My husband was working night shift, so I was pretty lonely. I spent a lot of time watching movies, t.v., surfing the internet, and shopping for fun. I was replacing relationships with people by filling my time with escapist activities. The cold hard truth was that at the end of a t.v. episode, I was still alone. So I started inviting people from work out to coffee. I found a church and became involved. I started volunteering in the community. Now my life feels so full that I've had to start practicing the art of saying no. I'm living my life as opposed to escaping it.

3. Stuff is just stuff. Simple living seemed like such a weird concept to me. Why would I want to bake my own bread when I can buy fresh loaves at the store? Why would I want to do without when I can have more? Even though advertisements try to convince us otherwise, stuff can't make us happy. I realized this as I cleaned out my closet for a yard sale. I had more clothes than I could wear in a month, yet I always seemed to wear the same six or seven outfits even though I always complained about having nothing to wear! I simplified my life and cleared out the clutter. I've never felt more organized. I feel like I have power over my house now instead of my house always feeling like it is out of control.

4. Giving is receiving. Money is a piece of paper. I do not want a piece of paper to be the main focus of my life. In order to move away from the widely held belief that money is everything, I needed to start giving some away. I've been focusing lately on giving God my first fruits. Before now, I would give Him my leftovers. Think about that: God, who gave me everything, gets what is left over after I fulfill my every desire. How stinkin' selfish! I've also been trying to volunteer at least once a month. Lately I find working with my hands so gratifying. My new favorite place to volunteer is called the Christmas Store. The store provides low income families gifts for Christmas. I only spent an hour there, but I was so moved by the experience that I know I'll go back.

5. Prioritize your wants. I could probably make a list of all the things I'd like to have over the course of my life, but I have to start with one thing at a time. Instead of buying everything we want on credit, we will start saving in January for one purchase at a time. Once we've paid cash for that purchase, we can start in on something else. I have a limited amount of cash flow, and I've learned throughout this process that I have to pay attention to my outflow. After all, delayed gratification is so rewarding in the end.

So there you have it: five lessons I've learned while becoming DEBT FREE. Isn't it funny that only one is truly money related? This experience was so much more than just getting a handle on my finances. I thought I knew these lessons because I certainly heard my lips saying some of them out loud, but I didn't know squat. The path to becoming debt free has changed my whole perspective on life. What effect could becoming debt free have for you?

How To Talk Finances

My dad is getting ready to travel cross country on a motorcycle in two weeks...alone. I'm worried for him. As you now know, my dad is my only living parent. I need him to stick around another thirty years or so, but my dad is retired and he wants to go out and do his thing. I totally get his need to Vita Abundantior (there I go again...), but my dad doesn't have a cell phone, and he's going alone. How am I supposed to know if something happens to him? I think maybe he needs to have my name and number tattooed on his chest just in case he ends up in the hospital.

Thinking about his upcoming trip, I started wondering about my father's financial life. Now, this is depressing as hell. I don't like thinking about my dad dying, but I'm starting to see that his financial health is as important as his actual health. Since my mother is dead, I'm assuming that he has already paid for his plot, but what about his savings? If my dad falls and breaks a hip (God forbid) in ten years, does he have the money and the insurance to cover the expenses?

I know we need to have this conversation because my dad is over 60 years old. He is in good health right now, but my family knows all too well that you can be healthy one day and dead the next. I know he has a will because I came upon it one day when I was hunting for my birth certificate, but it was pretty dated. Has he updated his will? I don't know.

Unfortunately, I don't know how to bring up his financial life. I'm worried my dad will think I'm out to ambulance chase him to the grave or something. If any of you have had the "financial health" conversation with your parent(s), how did you bring it up politely without seeming nosey? Any advice would be appreciated.