This jarring realization of how deep in debt we were prompted us to take a look at what this whole “Dave Ramsey” thing is really about. I kept hearing these Ramsey terms like, “snowball“, “baby steps” and “emergency fund“. I spent the next few days researching about the whole method and devising a plan of attack. I hope this post gives you hope for getting out of debt, no matter if you make a ton of money or not.
Over 6 months ago, we were $50,000 in debt. What was the catalyst for us to turn things around?
I think it was when we actually sat down and wrote out each balance we had for each debt. We never thought of student loans as debt that should be paid off quickly…same for car loans. However, we realized that debt is debt and we wanted to get rid of it as soon as we could.
What strategies did we use to recover our finances?
The first thing we did was look at where we were spending our money. Most bank websites have a nifty tracking devise and you can categorize your spending. We noticed we were spending way too much on groceries (my fault) and eating out. Also, all the random things added up…most of them I couldn’t even figure out what they were.

What adjustments did we make on the spending side?
  • We took that tracking statement from our previous month and devised a plan to make each category significantly smaller.
  • We cancelled our cell phone payments and got rid of our iPhones . We signed up for prepaid phones through MetroPCS which brought our $160 cell phone payment down to $60 per month.
  • We cut our cable and starting using Netflix and Hulu to stream shows on our Roku.We bought a cable antenna to use if we want to watch broadcast (newer TV’s have this antenna built in).
  • I enrolled in doTERRA and started selling essential oils to get as much money as I could on the side to help pay down debt.
  • I stopped buying over-the-counter medication and cleaning products and started using essential oils instead.
  • We called various customer services (i.e.XM radio, car maintenance)on various plans and told them we couldn’t afford it anymore. They offered to reduce the payments by more than 75%!
  • We made sure to cut our electricity down by turning off lights and not running the air conditioning too high.
  • I make a lot of homemade cleaners  to cut down on spending too much on store-bought products.
  • We buy most everything USED at Goodwill, Craigslist, and local thrift stores.
  • We sold A LOT of stuff. We sold a car, bringing us down to a one-car family. We sold furniture. We sold dishes, clothes, toys, etc.
  • We started using the “envelope” system and took out cash for certain things like: my personal money, my husband’s personal money, groceries, entertainment and dining out. We use the cash for the week and when it runs out…it’s out.
  • We don’t use our debit card at all anymore…only for gas.
  • I strategically meal planned our meals.
Did we focus on cutting our spending, boosting our income, or both?
A little of both. My husband’s pay stayed the same. I am a stay at home mom who dabbles into blogging, so I made an effort to try to make a little money from blogging. All the money I earned from blogging went into paying off debt.
All it took was “Baby Steps”…
  1. First, we dropped our savings to $1000. This is baby step #1 in the Dave Ramsey method. Some people have to save up to the $1,000 but we had this in our savings account already. We actually had a lot more. We are money hoarders. We were hoarding our money all the while we had a mountain of debt. Dumb, eh? This, for us, was the hardest thing in this whole process. Dropping our savings to $1,000 was a BIG risk…especially when we no longer had the security of the military. We were civilians now. No career safety net.
  2. The next baby step is paying off every single debt using the “snowball” technique. We took our list of debts and put them in order from smallest to largest. We started paying off the smallest debt first. To do this, our budget had to be PERFECT. We took every bit of extra money left over, after making payments and taking out grocery/personal/entertainment money, and put as much as we could towards this smallest debt. We made the minimum payments on all the rest of our bills. Once that debt was paid off, we took all that money we were paying into that first debt and put it towards the next debt. It was like climbing up a ladder…or rolling a snowball down a hill.
  3. Baby steps 3-5 have to do with investing (college, saving 3-6 months emergency fund 401-K, stocks) and, to be honest, I’m not sure what order they go in…because I don’t care about them right now! We are still in baby step #2 but we have paid off more than $27,000 in 6 short months.
We were able to pay off over $27,000….
  • by budgeting very wisely
  • selling lots of stuff to put towards paying off debt.
  • using some of our savings to pay off debt
  • and continuing to tithe in the process
What is our plan now?
  1. We are getting ready to start paying off OUR LAST DEBT!!! Our Honda that we bought last year (brand new) should be paid off before this year is over (if my calculations are right)!
  2. Then we move onto Baby Step #3, which is saving 3-6 months emergency fund. This will cover 3-6 months of expenses in case anything happens.
  3. After we save up our emergency fund, we will start saving up for a down payment on a house!


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