Money Talks #1 – Chiseling Away At Debt!

HUGE Step in the Right Direction

So where do you even start to consider if you could retire early to roam our great country???

#1 – Without a doubt, the first step is getting out of debt!

#2 – Followed by the just as major “living within your means” and even downsizing.

Those are actually two very different topics, and #2 will be covered more in depth at a later point, but it was when we TRULY understood and accepted #2 that #1 became possible!

We knew we had to go into this life change with no monthly payments or we’d never be able to make it work financially. There are options for working on the road for some people – but nothing we’ve chosen to pursue at this point, although we may at some point in the future.

There’s also several ways to get free “rent” – which usually includes your electricity, and sometimes propane, laundry and other perks. Work Camping is an excellent option if you’re willing to stay in one place for 3 to 4 months at a time, which we may do after a few years. Problem with that for us right away is that we’re not making this change to have our feet nailed down right away – LOL!

Another option is a Thousand Trails Elite Membership where you pay a good chunk of money ($4-5K) up front, but then only pay $500 a year to camp at any of their sites PER YEAR. We will probably do this for at least the first 3 years – works out to $180 a month for rent including electricity! Can’t beat that!

See where the “living within your means” starts playing in? Figure out what you WILL make (or have saved to spend per month) – and work backwards from there! Downsize? You bet! Less junk – more fun! That thought process has kept us from buying things we don’t really need already this year!

But back to the first step – NO DEBT!

Read up on Dave Ramsey’s debt reduction plan – MUCH better than any other technique out there! Most financial advisors tell you to pick your highest interest card/debt regardless of amount and start trying to pay extra against it. Problem with that is that you are still making the small minimum payments on everything else and they never go away – and it takes a long time to feel like you’re making a dent in the one with the high interest.

The Snowball Effect plan does just the opposite. You pick the one with the smallest balance, start putting everything extra towards that until it’s paid off and then the payment you were making on that one gets rolled into the next one on the list making the payments on it higher.

Sound difficult or weird? Check it out in more detail at Dave Ramsey’s site.

We can say it worked for us! Paying off our FOURTH small credit card this year this week (6/30) – and we had been trying to pay those off for quite a while! Then we’re on to our remaining LARGE one, but we’re throwing lots more money at it monthly than we ever thought possible and it will be paid off way sooner than any other method!

The remaining challenge is to not obtain any NEW debt! It was hard the first month to not use any cards – it just becomes habit to whip out a card at the store – but knowing that we will never obtain our dream if we don’t make that change was all it took to get through that mental adjustment.

NOW if we don’t have the money planned out for something, we don’t get it! That’s not to say we don’t have any fun – we’ve been on two small vacations already this year – but they were planned for, budgeted for and SAVED for. Nothing went on any credit cards! VERY proud of ourselves and loving seeing the progress towards our dream!

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