5 Critical Financial Moves That Put Us on the Road to Solvency

Just a few short years ago we were mired in debt and it looked like I would be working until I was 90. Obviously we were doing everything wrong financially that you could think of but we were so comfortable in our rut that we didn't know, or didn't want to know, what to do to get out of it.
Then I found Dave Ramsey, listened to his show religiously, made some (many) changes, and now today we have our debts paid off and I was recently able to quit working and travel for a while until we decide what to do next.
These are the five critical changes we made that, without which, we would still be up to our eyeballs in debt:

1. Pay cash for a car and drive it until it dies. For many years we leased cars, had insanely high car payments, and just thought that was the way that everyone did it. Today we have one car, it is paid off, and we will drive it until it dies and not a moment sooner. I think car debt is the number one change that people could make in their financial lives that would immediately put them on the road to solvency.
2. Don't use credit cards. Aside from car debt, we also had the habit of running up our credit cards (there were many) as high as the banks would allow (and when that didn't work we would call the banks and grovel for a credit limit increase which they would often grant). The amount of unsecured debt we had on credit cards was ridiculously stupid but we had no one to blame but ourselves. Today we pay cash for everything and have paid off our credit cards. Hubby has one credit card that we don't use (he feels more secure with it for some reason) and I have no credit cards (and no desire to ever have one again). There is absolutely no reason you, or anyone else, should be guaranteeing your future income to buy something you want today, at 20%+ interest no less.
3. Don't eat out. Again, we had the high-flying lifestyle with the cool cars, the crazy credit card debt, and the major shopping sprees. With all of this debt, we were also working like maniacs just to tread water with these debts which meant we weren't often home which meant we both--along with the kids--ate out literally every day. Often we would eat all three meals out. Needless to say this was an expensive habit that only served to rack up credit card debt even faster (and it certainly wasn't healthy either). Now I see that eating at home can save SO MUCH money. For example, feeding a family of four dinner out at a restaurant can easily run $50 to $80, for one meal. For that much money, you can feed the same family of four at home for an entire week!
4. Have an emergency fund. When you have a huge amount of debt, everything is a financial crisis. Until I heard about Dave Ramsey, I had never heard of the concept of having an emergency fund. When Dave said that you need an emergency fund so that if an emergency arises you don't have to use your credit card to cover it, it was like a light bulb went on in my head. Duh. Since I put together my emergency fund, as Dave had predicted, we have never had to put a financial crisis on our credit cards because we had the cash to cover it. This allowed us to pay off our credit cards once and for all. If you don't have a "starter emergency fund" of $1,000, you need to do this today.
5. No. More. Shopping. I used to shop recreationally. My friends and I would run to the mall during lunch, I would see someone with a new purse, think I needed one, and cruise by the mall after work to pick one up. The hubby and I would spend our weekends walking around Costco, the mall, and other big box stores being subtly convinced that we needed more and more stuff to be happy. Needless to say, that kind of hobby can bury you in debt faster than just about anything else. Today we shop only when we absolutely need something and there is no more aimlessly wondering around a store just because we are bored. I also don't feel compelled to shop just because I see someone else with a new purse or new shoes and I don't equate my self esteem and "status" with what I own.

With those simple steps, we were able to dig ourselves out of the mound of debt we had buried ourselves under for years. It really is that simple. Yes, your ego may take a hit when you drive up in a car that is older than your kids, when your purse is so many seasons old it can't be identified, or when you have to opt out of the expensive restaurant meal with friends because "that's the place you have always gone to" but it no longer fits in your budget, however the feeling of freedom that comes with being debt free more than makes up for any temporary ego problems you may have.