PAID!

As many of you know, Staci and I dig Dave Ramsey. We have been sacrificing and working hard to get out of debt! I have still had to take out student loans for my grad classes since we didn't have large piles of money floating around. But, we did, little by little, put small payments on our car
loan which we took out right before Katya was born. Well, thanks to economic stimulus package, we got a little boost, and had some extra money saved up. Now, it is paid off! Woot!
You can see how excited Cali is about it!

Finally!!!

Well, we finally did it. We cut up our credit card. I have had this card since 2003 right when I got back from my mission. Before I wised up and got an emergency fund, this card served me well. I have been really good about paying the balance off quickly, and I have not used it that much. I could have used it a lot more, but I am glad I didn't. The thing that was holding us back was Staci never wanted to get rid of it, just in case we needed it for an emergency. First off, we never used it for an emergency. Staci never used it at all, but I did, and only for stuff that I wanted, but didn't have the money for.

I haven't put anything on it for quite a while, and I wanted to just shred it, but Staci wanted me to keep it. I have been trying to get rid of it (while still using because we had it), and I think Staci was getting sick of me using it. I suggested that we get rid of it many times by saying, "Dave Ramsey says you should..." Well, NOBODY likes being told what to do, especially if he or she doesn't really believe in it. So, a couple months ago, instead of saying, "Dave says this..." I started just talking to Staci about our money situation, and not even mentioning Dave Ramsey. Well, that helped a lot. Staci started getting more interested in getting out of debt, and staying out. I bought a little book for six bucks by Dave Ramsey, and she started reading it. Then, she started reading stories on his website. Then, finally, she said, "We should just cut up our credit card." I said, "Great! I will close the Wells Fargo Checking Account that we have open, also." We only use that as an easy way to pay off our credit card when we charge something to it. So, I went and closed them both, and now we are good to go. The only debts that we have left are our student loans, and our car loan. I am going to try and get a scholarship for this next school year so that I don't have to take out a loan for another year. We have almost enough money to cover spring and summer tuition, and if I get a good job this summer when school is out, I can save enough for the fall and winter tuition next year. It will be tight for a while, but we will make it. Hopefully, we can have our car paid off by the time I finish my grad program (April or August 2009).

I think another thing that has helped Staci be okay with getting rid of our credit card, is that we got a checking account through ING Direct, where our Emergency Fund account it. The checking account gives us 4% APY (3.93% interest rate). We can write checks (via the web), use our debit card, or transfer money to our regular checking account. It also allows for faster access to our emergency fund.

We are pretty excited about finally being able to get out of debt.

Moving into our new apartment really helped us a lot. The other thing that really helped is doing a zero-based budget (PDF forms here). That is where every dime we make has a home before we get paid. That way, our checking account is down to $0 (except for gas money) before we even get paid. It doesn't mean that we don't have money for everything, but it means that we are never left at the end of the month with extra money waiting for us to blow it on something that is not in the budget.

Those two things (cheaper apartment and zero-based budget) made it feel like we got a raise.