Exchange your Runcible Spoon for a Pitchfork

One year after I've read Total Money Makeover by Dave Ramsey, I wanted to review how this last year has gone, financially. Don't worry, I'm not going to pull up our monthly budgets for my blog - despite my great love of crunching financial numbers, I don't expect any of you to love my finances. I hope you love yours, though.

To wit - last February, I read Total Money Makeover. (the relevant section is far down in the actual post. In an unrelated note, a year ago this weekend we were all sick as well. Maybe it's just the new family tradition) It made me cry. Avram and I were already paying off student loans - our only type of debt - but I felt that we were trying to dig ourselves out of a mountain with a runcible spoon. A dull one. After lots of talk together about being gazelle intense and focusing our priorities on paying off debt, we began our new purpose, of continuing to pay off student loans, but better, and faster, and with a pitchfork instead of a spork.

Sure, Avram was, and is, and will continue to be for the next three to four years, a student - a Ph.d. student. But we had some small means to pay off debt, and we didn't want to push all of our fiscal improvements to post graduation. Since Avram's funding this quarter was halved, we essentially have put a temporary hold on paying off any debt until this coming fall, to conserve resources, and not to have to go into any new debt. So...In the fourteen months total of paying on debt (November 2008 through December 2009) we payed off 23% of our total outstanding debt. We spent about 28% of our income for the year in doing so (and by income I'm including any and all incoming money, so employment, babysitting, tax refund, grants, etc.)

When we began last February to really try and reduce our debt, I thought that even with being gazelle we wouldn't be able to make much of a dent. I'm happy to say that I've felt blessed to be able to better discern our needs from our wants, and to have had the funds to do so. We also saved a $500 emergency fund, which with all other available monies was used up in the scramble to pay for tuition, insurance, and other fees for this quarter - but the money was there to be used.

Avram has been verbally promised funding for the Spring quarter, and has a class assigned to him (although I will not fully believe it until he has a signed contract in his hands), and so although it will take all of our financial savviness to recover from the glitches of Winter Quarter, and he needs to find a job for the Summer, we should have enough to not need any student loans this year, even with our far rockier finances. One of the reason for this is that two of our loans, my school loans, and a personal loan from Avram's grandpa to pay rent in England, will be paid off - the loans we were gazelle intense on this year. This means our monthly budget is low enough to live on, regardless of our differing finances. And the other student loans, all under Avram's name, and all subsidized (meaning earning no interest), and all not needing to be paid off until he graduates, can remain in stasis until we get our financial feet under us again.

All in all, I've been very happy with following Dave Ramsey's advice and financial plan. He estimates that an average couple, following his plan (which isn't rocket science. You snowball your debts. You pay off your debts with gazelle intensity. The end.) will on average take 18 months to 2 1/2 years to pay off their debts. We'll take longer, but I always knew we would, since Avram is a student, and his schooling is more important than for him to take a second job, and for us it's worth it for me to be a Homemaker than to work full time, even with babysitting (and especially with being pregnant. It's nice to only babysit about once a week right now.)

In summation, I'd recommend if you feel like you'd like to be out of debt, or in control of your financial future, don't wait for a raise, or for something to come along tomorrow, but instead take control today - you may be surprised how much you can accomplish with what you have currently. Okay, stepping off my "I sound like I write motivational blog posts for a second income" soapbox now.