One of my biggest dreams is being financially independent; maybe not necessarily independently wealthy (although if we’re dreaming big, maybe, why not), but certainly free of debt and in control of my finances. It may not be a dream as fun as trips or houses or yachts, but to me, it is the cornerstone of making all my other big dreams a reality.
Like most people in that gigantic amorphous mass we call the middle class, I grew up in debt. I didn’t know it as a child or teen, the bills may not have come in my name, but I was in debt because my family was in debt. My mom, bless her, did miracles with her teacher’s salary to make sure my sisters and I had what we needed and some of what we wanted, a feat I continually realize how hard it was as I grow as a parent. That life, however, taught me habits that I took into my own independent life once I moved out on my own at 20, and it wasn’t long after that I was already in debt myself. Cut to 23 years later, and I have a hefty debt to my name that I now have to deal with before it continues to affect my future.
In terms of what steps to take, this dream is actually quite achievable. Around two years ago, I was introduced to the teachings of Dave Ramsey’s Financial Peace University, and ever since I have become a true devotee. Between his books The Total Money Makeover and Financial Peace Revisited, I have at my disposal a series of tried-and-true “baby steps” (as Ramsey calls them) to help me get out of debt in a few years.
The thing with the baby steps is that you have to commit, and I’ll admit that I have faltered in that commitment along the way. The first three baby steps are in many ways the hardest, as they require you to put away $1000 for emergencies, pay off all debt except mortgage, then expand the emergency fund to cover 3-6 months of expenses. For anyone living paycheck to paycheck, or damn near close to it, stashing away $1000 is hard—not impossible, but hard. It certainly is for me. It requires shaking off habits learned over years of paycheck-to-paycheck survival and an acknowledgment that there will be a future. I’ve done this in the past, had to use my fund for an emergency, and I’m currently working on replenishing it after having had to fix my car recently.
That said, over the last two years I have done baby step #2 to pay off credit cards, and I’ve managed to pay off two of them. I still have a long road ahead, but I have seen that it works, so it gives me the impetus to keep going. My biggest problem is not committing enough to the process, not dedicating every extra cent available to the process. And while I do believe that from time to time we need to have some fun to make all the work worthwhile, I could be doing a lot better in my budgeting to save and pay off debt.
So that’s my big, achievable dream, to get rid of all my debt so that I can save and have a healthy emergency fund, put money away for retirement, and have available income to achieve some of the other big dreams my wife and I have. More important, I want to teach my children new habits, break the debt-is-normal cycle, and hopefully set them on a better financial and life path for their future.