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On your way to being a senior citizen, it is very important that you become debt free prior to retiring.  Your life will be so much more enjoyable without having the stress and worry about paying credit cards and car payments.

I first started off reading the blogs by Mary Hunt.  Mary Hunt is an author of “Cheapskate Monthly”, a subscription newsletter.  As much as I tried her techniques to become debt free, an “emergency” would always came up and I could never get to the point to save $10,000 as an emergency fund.

Step in the boyfriend (BF)….the BF in his wisdom, has been debt free, including his mortgage, since the age of 45.  It was always his goal and he obtained it by being frugal, eating at home, taking his lunch to work, etc. He is not so frugal that he hasn’t lived.  He owns 4 cars…yes I know that’s more than any one person needs. But one of the cars belongs to his daughter. The other 3 all have a purpose (in his mind).  The ‘84 jeep – a “classic”…the F250 – “to pull the Seadoo”…the 2014 Jeep Wrangler – “cause I like it”. Hey he has the money and has been frugal, who am I to tell him he’s crazy? Anyway, whenever we would talk about finances he would tell me about some guy named Dave Ramsey who believes in being debt free, including your house and “living below your means”.  I would talk back and say “no thank you I’m doing it “MY” way. But as the months and then the years would go by, “MY” way wasn’t working.

One day, driving down the freeway to go more than 45 minutes away to a mall to buy some bras from Victoria Secret (best fitting, best quality for the money bras), I decided to listen to a Dave Ramsey podcast on my radio.  

STOP THE CAR!!!  I couldn’t believe my ears.  Here was a married couple 15 years younger than me, making half of what I make combined (that’s awful) and they were doing their “debt-free scream”.  What the heck is a “debt-free scream”? It’s what you do when you have no more debt. Zero. Nada. Zip. This couple had paid off over $80,000 in something like 4 years.  I thought to myself. “This is crazy. No one can make $42,000 per year and pay off $80,000 in 4 years, NO WAY”. Well, one after another, I heard all these people for over an hour coming on the radio screaming they were debt free.  Some even had their houses paid off, some just their student loans and credit cards.

I turned the car around, went home, (no I didn’t buy any bras that day) and listened for the next 4 hours of what Dave Ramsey calls his “baby steps” and people screaming about being debt free. 

Dave Ramsey’s Baby Steps:

  1. Save $1000 for emergency fund.
  2. Pay off all non-mortgage debts using the debt snowball:
  • List your debts from smallest to largest, regardless of interest rate.
  • Make minimum payments on all your debts except the smallest.
  • Pay as much as possible on your smallest debt.
  • Repeat until each debt is paid in full. 

      3.  Three to 6 months expenses in savings.

     4.  Invest 15% of household income in retirement funds.

     5.  Fund college for kids

     6.  Pay off your home early

     7.  Build Wealth

I wanted that.  I wanted my furniture payments gone. I wanted my student loans gone.  And most importantly, I wanted my mortgage gone. I didn’t want to be 78 yrs old when my house was finally paid off.  I didn’t want any payments of any kind after I was going to retire. I knew that night what I was going to do, what I HAD to do, and how long it was going to take me to get there.  

I took all the money I was saving, the way Mary Hunt had suggested, and used it to pay off all of my furniture and credit card payments that night.  I cut up my credit cards that night. I paid extra toward my student loans that night. I was on fire. I was going to start living below my means as much as I could.  My problem was that I had a huge house with a big yard and a big pool and a bigger electric bill because of the big pool! I needed to get rid of the house. But there was a problem.  I was 53 at the time and I knew about 2 little propositions in California called Proposition 60 and Proposition 90. Those 2 propositions help senior citizens (55 yrs or older) keep their property taxes at decent rates when downsizing.  So I had 2 years to pay off the rest of my student loans, then hope the housing market would go up (more) and sell the big house and buy something smaller that would fit me better.

sorry for the terrible pic, have to learn how to edit photos

Each square = $1000. I started on 2/4/17. As you see I owed and paid off $43,000.00 in a year and a half. It was actually more, I didn’t do this chart for the furniture ($2200 and misc credit cards approx $1000).

Present time: I am now 55 yrs old.  I sold my big house and bought a smaller house in a 55+ Active Community. I have paid off all of my debt, except for my mortgage.  My mortgage should be paid off in 3 years. I will be 58 at that time. I have added a new goal for myself. Besides being debt free including my mortgage, I want to be able to retire at 60, which now leads me to reading the blogs of Financial Samurai, Mr. Money Mustache and the rest of the FIRE group (FIRE = financial independence retire early).  Why don’t you come join me!

Here’s to reading on!

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