- We listened to Dave Ramsey for two hours each day for a good year. Hubby got fairly sick of Dave Ramsey but his common sense advice--and the repetitiveness of it day after day--eventually planted itself into our subconscious. He was the first person to say that people didn't have to live with debt--I literally never even thought that was possible as everyone I knew lived with debt.
- We stopped worrying about what everyone else thought. For most of our life, we didn't want to be weird (Dave Ramsey gives you permission to be weird and not normal because normal people are broke) but we found that even though we were doing odd things (like riding the city bus and dropping cable) people were really more preoccupied with themselves and barely noticed the things we did. Plus, at the time, many of the people who we thought would judge us if we didn't keep up with the Joneses, were losing their jobs, going bankrupt, etc.
- We were brave enough to experiment with many things. It hit me when we hopped on a city bus in Mexico. We were on vacation and our usual MO was to ride the city buses around whatever city we were in to get a feel for the area and then I wondered why I was so happy to ride a city bus in a foreign city but had never even considered riding the bus in my own city. So I left my car at home and tried out our city bus when we got home. I loved it! I could arrive at my destination after reading a book or listening to music instead of dodging traffic plus it was literally $1000 a month cheaper than paying my car payment, insurance, gas, maintenance, etc. Holy cow! So the minute my car's lease was up it went back to the car company and we were instantly a one car family. Our schedules were pretty flexible anyway and we shared the car often. Plus I carpooled with co-workers to meetings and got a monthly bus pass for other times and the world didn't come to a halt at my audacious behavior. Instead, we learned that by daring to experiment, we could save A LOT of money.
- We cut up our credit cards and went cash only. If there is one thing that strikes fear into the heart of a shopper (other than the moment when the clerk goes to swipe your credit card and you don't quite know if it will be approved or not) it is not having any credit cards at all. But we took Dave Ramsey's advice and cut up our credit cards and went cash only (not even using our checking accounts for a while because we were forever over-drafting our accounts). It's really hard to over spend when you are living cash-only. When the cash runs out, you are simply done shopping.
- We also, as Dave suggested, put together a $1000 emergency fund. We sold stuff on eBay and Craigslist, had garage sales, sold gold, etc. in order to get the money for the emergency fund and this money, since we had cancelled our credit cards, was our only source of funds for an emergency. When we were using credit cards for emergencies, it was easy to justify a great shoe sale as an "emergency". When we had a limited amount of money for emergencies, we couldn't use it for anything other than legitimate emergencies (and there were a few times where this money really saved us!).
- Then we listed our debts, smallest to largest, and made it our mission in life to pay off our debts ASAP. It was a slow go but slowly but surely our debts got paid off one by one. To do this we were throwing every single extra dollar at the debts, having garage sales, doing extra work, anything to get the next debt paid off as soon as possible.
- When circumstances changed, we changed. For years and years were were an upper middle class family with good jobs and good incomes (and lots of debt to show for it because we wanted to "look" successful. Obviously there is a big difference between "looking" successful and "being" successful). But then a bunch of events happened...hubby fully retired, house prices were sliding, I lost my biggest client...and we had to decide what to do. We could have scrambled and tried to maintain appearances and hoped that the economy would turn around so we could maintain our "normal" lifestyle or we could make a drastic change. We decided on the drastic change. We sold our house while we could still got some equity out of it, we sold nearly everything we owned in a massive succession of garage sales and a flurry of Craigslist ads, we paid off our remaining debts, and then, rather than jumping into another similar lifestyle, we decided to be vagabonds for a while. We traveled for a year and a half (very easy to do, even with both of us living on hubby's small pension, when the only debt we had was a small storage locker fee and monthly prepaid cell phone bills!) then we wound up in Las Vegas for a poker tournament and ended up buying a house and settling there (fortunately the Vegas housing market was pretty near its low point and we got a great deal on a newish house).
- Since then we have been happily living as retirees in Las Vegas. We live frugally on hubby's pension and social security and my random income (mostly freelance work and a very cool seasonal job) and we no longer worry about debt. We don't live above our means any more and we debate spending money on even the smallest things (a habit we developed when we were getting out of debt. Just a few days ago we were out shopping and getting hungry, I said lets just go to the Chinese place but the prices were $6.99 per person which hubby said was too much so we drove a bit further and ended up sharing a pizza lunch special for $5 total...that's just how we roll these days).
The moral of this story...if ten years ago someone would have told me we would be debt free and both of us retired before I turned 45 I would have laughed them out of the room. We were so deep in debt (complete with creditors calling us daily and the IRS sending us letters weekly) that I thought I would be working until I was 90 but by using the free advice that is out there (mostly Dave Ramsey but there are a lot of inspirational blogs and websites out there as well) and making significant changes in our lifestyle and our attitudes, we were able to not only get out of debt, but completely change our lives.