We are debt free – this is what peace feels like amidst a tanking economy.
Let’s get on the same page: 69% of Americans have less than $1,000 saved in their bank account & just 18% of Americans say they could live off their savings for at least six months (GOBankingRates Study 2019 & Bankrate Study 2019).
Our prayer moving forward is every person has enough emergency savings to take care of themselves and loved ones in difficult times such as these (ie COVID19). It’s time to reestablish a relationship with money.
My husband and I are both 26 years old. Between the two of us we have two bachelor degrees, one masters, an apartment, and two cars. We have been debt free for almost one year.
Not only are we debt free, we have 6 months worth of living expenses saved in our bank account. This means if we both lost our jobs tomorrow we wouldn’t have to panic.
Neither of us have high paying positions – we have simply been diligent in saving, paying off our debt, & wise about our financial decisions.
When we got engaged, we had a fairly substantial amount of student loan debt to pay off. We spent several weeks taking Dave Ramsey’s Financial Peace University. This course is where we attained the tools we use every day to handle our finances.
Dave has a 7 step plan to becoming debt free and building wealth:
- Step 1: $1,000 in an emergency fund.
- Step 2: Pay off all debt except the house, utilizing the debt snowball.
- Step 3: Three to six months of savings in a fully-funded emergency fund.
- Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement plans.
- Step 5: College funding (i.e. 529 plan)
- Step 6: Pay off your home early.
- Step 7: Build wealth and give.
If you want to look further into Financial Peace University or Dave Ramsey’s work click here.
These steps have founded a positive relationship with money in our marriage. We do not argue about where it’s is coming from, what we can afford, or who pays for what.
We may both lose our jobs in the coming weeks, in fact, one of us already has. But we don’t have to worry – we have saved for this emergency.
While we feel incredibly sorry for the families hurting financially in this time – and our prayers are with them every single day – we hope our nation now realizes that money needs to be managed well & cared for wisely.
If you are in debt, you cannot afford to follow your “wanderlust” on expensive trips or purchase designer clothes to keep with the latest trends.
Debt cannot be an option moving forward.
It’s time to make the change. We hope everyone can understand that now.
If you have any questions, please feel free to send me a message through my contact page. Read Jeremy’s financial reflections here.
We continue to pray for everyone to experience healing and a new financial perspective through COVID-19.
For further information about handling your finances and preparing for retirement please be sure to check out the FIRE movement.