My husband and I view money in a much different way now that we are working to get out of debt than we did when we were first married. We were free spenders who accepted debt as a way of life and didn't have a real handle on where our hard-earned income was disappearing to each month. When I look back now, I can't believe the blinders we had on and the misconceptions we had about money.
Payments are a way of life.
When we first got married, we had a good chunk of credit card and student loan debt. Each month, we paid the minimum payment and went on our way. This is just what you do, right? Pay the payments until one day the loans disappear. What I hadn't realized was that we could pay more each month, get out of debt early, have more disposable income each month, and save a load on interest. I hadn't realized that we were in control of how long we had to be, as Dave Ramsey would put it via Scripture, "slave to the lender."
Credit cards are a necessity.
I'd been taught for so long that using credit cards would build up my credit score, and that having a high credit score was the only way we could make it in the world. The companies lured us in with their rewards and points programs, and we put all of our monthly purchases on a card. This is just what you do, right? You swipe your card to buy things. If you want it now but don't have the cash, you just pay later. It turns out, it's quite possible to live without a credit card. We now put most of our monthly budget items in cash envelopes and use our debit cards and bank account transfers for the rest. If we can't afford it, we don't buy it. No more credit. Dave Ramsey calls credit scores "I Love Debt" scores. They reward you for having debt and are just used to help you go into more debt. Well from now on, we're buying things in cash, so guess what? No need for a credit score.
Coupons save us money.
OK, I suppose in their literal sense, coupons save money. But when I think about it, we used to go to restaurants in order to use their coupons. This means we chose to go spend money we didn't need to spend (and probably didn't have in the first place) in order to save something off the final bill. I'm sure the same has been true for products at grocery or department stores. This is just what you do, right? You treat yourself to dinners, clothes, and extra snacks and feel fine about it because your coupons are saving you money. Now, unless it's something we actually need to buy in the first place, I view coupons as an invitation to go spend money rather than to save it.
All our extra money should go to savings.
Perhaps my biggest revelation was when I realized we were stashing money away in a savings account while our debts accumulated interest. This is just what you do, right? You pay your bills, spend some money for fun, and save the rest for a rainy day. In retrospect, we were making pennies on the dollar to stockpile the money that could be getting us out of debt early. Dave Ramsey suggests putting that extra money toward your debt snowball after saving a $1,000 emergency fund, and getting rid of the payments before you build your savings.
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