One year ago I discovered Dave Ramsey.
Pool Boy and I were talking last night about where we were at financially one year ago. He had just bought a brand new, cherry red zero turn mower for $3000 – financed, of course. We had two car payments that equaled $785 per month. We had credit card debt of several thousand dollars. We had a home equity line of credit loan with a very large balance. We owed Best Buy for a new television and laptop. And on and on. And ON. We thought we were doing well (just like some of you may be thinking now, eh?).
Then I downloaded one of Dave’s podcasts and listened to it while on a walk one evening. What he said stopped me in my tracks – literally. Like, I was walking and then I stopped. Then I proceeded to panic. “Ohhhhhhhh Noooooo,” I thought to myself. “He’s talking about us.”
What Dave said that night informed me that we were dead broke. And we didn’t even realize it until that night. We never had a problem paying our bills, but here is where we were going wrong:
- We weren’t in charge of our money. We had no idea how much was going in and how much was going out.
- If we wanted something but couldn’t pay cash for it, we financed it. Car, truck, big screen television, laptop, mower, leather furniture…all financed. Some at zero percent interest, but still financed.
- We bought a lot of crap we didn’t need. We went out to eat a lot, bought clothes if we saw something we liked, bought jewelry, went away on unplanned (in other words, unbudgeted) weekends, and then some.
- Retirement? We foolishly thought we didn’t need to do anything except keep contributing to my 401K and PB’s pension plan. What kind of retirement would that have been?
- We were grossly under-insured. Thank god nothing happened to either one of us during that time.
We had no plan. We were completely winging it. We were broke and only going to get more broke. It took a wake up call from Dave to realize it. Thank god we listened.
Oh, and today is also our real anniversary. Happy 15th year, Pool Boy! I love you!
