The start of our story

Honestly, it seemed very normal to us. We had debt, but who didn't?

We had our house payment - first AND second mortgage.

We had car payments - usually 2, but only 1 if we were being 'good'.

We had credit card payments - usually about 10. (yikes!)

We had loan payments (you know, for when the credit cards were maxed out).

We had payments on almost EVERYTHING. I don't know if we ever actually owned anything, or if we were just leasing our stuff through Citibank.

To make things just that much more interesting, I had been unemployed/underemployed for about 7 months several years back and most of our credit cards were at the default rate of 33% because of a late payment here and there.

When we started our little journey in October of 2006, this is what we owed:

Citibank #1 -- $824 @ 32.24%
Chase -- $1100 @ 33%
Citifinancial -- $1100 23.99% (nice low rate, eh?)
Citibank #2 -- $1615 @ 33.24%
Cap One Business Card -- $2000 % 17%
Beneficial -- $11100 @ 23.24%
Car #1 -- $8486 @ 4.9% (don't ask me how we got that rate with our credit, because I really don't know)
Car #2 -- $17899 @ 7.9%
Stupid Tax (I will explain this later) -- $6500
Citibank #3 -- $9857 @ 32.24%
Citibank #4 -- $8735 @ 32.24%

So if I am counting correctly, that is a total of 10 payments (plus 1 stupid tax), totaling almost $70k, which added up to over $1900 a month. That is $1900 a month in debt payments before we ever made a house payment, paid utilities or bought groceries or fuel.

You have to admit, that seems pretty 'normal', right?

Well (to put it simply), we got tired of being normal. We wanted to be strange. We wanted no more payments, and we wanted to be out from under the collective thumbs of our creditors.

This all started when I heard this financial guy - Dave Ramsey - talking about living debt free. He kept talking about 'baby steps' and how to use them to live below your means and pay off your creditors.

He has a couple of books out - the best one (IMHO) is The Total Money Makeover (TMMO). It is a very easy read, about 240 pages in total, and make a LOT of sense. It's the kind of sense that makes you say 'I already knew that, so why the heck do I have all these bills?'.

I read it over the course of a couple of days (it is really easy to read, and once it has your attention you just can't put it down), and I was instantly hooked. I was more than hooked, I was EXCITED. I actually saw a light at then end of the tunnel, and this time it wasn't the train barreling down towards me.

*side note* I will be the first to admit it, I get this 'good idea' excitement fairly often. Just ask my wife....she can probably list a few others. [/*end side note*]

This 'plan' of Dave's was really different. It wasn't some grandiose, overarching plan that was doomed to failure from the start. It was a simple, step-by-step plan that was so easy to follow that even I could do it.

Laura (my wife, in case you don't know me personally) was skeptical to say the least. She had 'been there, done that' with me before. I asked her to just read the book and then we could talk about it. She later (as in, months later) told me that the only reason she actually started reading the book is because I kept pestering her about it. She was going to read it just to shut me up....but as soon as she started it, she was hooked!

I will type out the plan on another post, or this one is gonna be hella long. :)

OK, so here were were, in October of 2006, with a bunch of new knowledge, a couple thousand dollars in our checking account (and the mortgage due - we would be paying it a few days late as usual) and tens of thousands of dollars in non-mortgage debt to pay off. We owed almost as much in debt as I made in a year. More than I made once you took out taxes and insurance.

So what did we do?

We got 'gazelle' intense. WE SOLD EVERYTHING. I sold all of my computer equipment, all of my power tools. We sold everything in the garage that we did not use, and some of the things we did (as a bonus, that meant I got to park my car in the garage finally!). We did whatever we could to get that $1000 in the bank.

We wrote a budget (go ahead, boo and hiss - it was worth the pain). We stuck to the budget (mostly - our first few budgets weren't very good). It turned out that we made enough money to do this, we just couldn't continue to blow money like we had been.

We then started hammering away at the bills, one at a time. Every bit of extra money that came in went to a credit card or a loan. When we paid off a card, we called our other cards and threatened to transfer balances if they did not lower our interest rate. If they refused, we transferred the balance and canceled the card.

Chase refused to budge, so we paid them off and canceled the card. We will never do business with them again in any way, form or fashion.

It has been 22 months since this all started, and we have paid off around $63k so far. We no longer have car payments and we only owe about $6500 to 2 credit cards. That means that we are still on BS2, but we are very close to being done and on to BS3.


I hope that this gives an accurate picture of what we went through. It has certainly not been all roses and sunshine, but it has been worth it. Our monthly payments are $1800 less than they were. Talk about a stress reliever.

I will continue to post more 'stuff' about the plan, and answer some of the more common questions. I will also post when we finally get out of BS2.

Of course, if you have any questions, send them along. I would be happy to answer them!