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Woo Hoo!!!  Happy Dance!!

My very first post for this blog was October 13, 2009.  In that post, we had started Financial Peace University in September 2009 and I had posted our total consumer debt.  At that time we had $39,829.79 in debt.  Our debt consisted of credit cards, a car loan, and a school loan. We did not include our mortgage or our HELOC.
A mere 18 months later, we have $0 in consumer debt!! Almost $40,000 in debt G.O.N.E.  That is an average of $2213 paid towards debt every month for 18 months! Originally we thought we would be out of debt in August 2011, but God is amazing and blessed us along the way. He is our provider, our protector, and we would not have accomplished this without Him!
How were we able to do it? 
We worked very hard and gave up a lot of “stuff.” We completely stopped using credit cards.  We went to the envelope/cash system, we limited our entertainment activities, and tried to make extra cash where we could. My husband transitioned to a job where he received a company car which allowed us to sell a car and apply the income towards debt. We were blessed when a personal loan was forgiven because we had shown faithfulness in paying it without fail. We took tax returns and bonuses and applied them to debt. It was hard at times, but every time we paid off one debt and went onto another, we could see the light at the end of the tunnel-and it wasn’t an oncoming train.
Murphy showed up A LOT.  During that time my husband faced two potential layoffs that slowed down our debt reduction progress. We had things break down, kids get sick often and I also had two family members reprimand me for not spending money the way they thought we should be spending money. Basically I was called selfish for not giving my children what one family member thought they deserved. I was also accused of being cold-hearted towards a family member for not extending a short visit to include that family member. It is amazing how much Satan Murphy wants to thwart your life when you are on a path of good stewardship. It is also sad how Satan Murphy can use people that are closest to you to wound you so deeply that it results in a fractured relationship.
I share all of this with you to demonstrate that any debt reduction journey is NOT just a numerical battle. It is also a spiritual and emotional battle. That is why Dave Ramsey plan is so effective – it takes those factors into account. It’s why he instructs to list your debts smallest to largest (not by interest rate) and start attacking the smallest one first. Small victories help you keep on keeping on. It’s why Dave recommends tithing during your journey. If you want to discover why tithing is fundamental, mathematical, pastoral and personal watch Why I Tithe by Kevin Myers. In this talk he discusses the 4 reasons he tithes. It is a practical application to a misunderstood conceptMalachi 3:10 NIV

“Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”

I have seen the truth from this verse in my own life.

So where do we go from here?

Well, Dave’s next step of the Baby Steps is #3 3-6 months of expenses into savings. However there is debate between me and my husband about whether or not we are on baby step 3.  The reason?  We have a HELOC that is less than $50,000.  But, if you add that amount to our 1st mortgage, our house {according to the market} is upside down {thank-you-very-much-housing-market}.  Even though the HELOC was used to finish our basement in 2005, I think we could recoup all our money and be at $0 if we sold our house. However, appraisers use recent sales in your neighborhood and our neighborhood has been hit with 3 foreclosures in the last month. Appraisers apparently only evaluate above grade level so a finished basement does not count.  {If you think that is asinine, raise your hand!} 

That tangent is to say that it looks like our HELOC is now on the debt snowball {I’ll be writing a future post explaining how we came to that decision}.  I could look at this as a major set back or be deflated because we are STILL on Baby Step 2, but if we paid off $40,000 in 18 months, surely we can knock this one out in no time.  Besides with the blessings we have received in the last 18 months, who knows what can happen.