As I walked in from the parking lot after working my second job at the Texas Roadhouse, this great sense of peace came over me. I realized that I got paid yesterday, bought groceries, and still had over ninety dollars in my food envelope. I paid every person I owed money yesterday. I have money in my gas folder. I have money in savings to pay my car insurance when it comes due. I have an emergency fund in case my truck breaks down. I’m not afraid of anyone that might call, if my phone rings, I would just answer it. I have financial peace. This is quite a contrast from four months ago.

Four months ago I screened all of my phone calls. If I could return a voice message with an e-mail, I would do that, less confrontational, easier. I especially remember a trip back to Springfield from Ft. Jackson, the first one since The Lazy Susan closed. I was scared to death from O’Hare all the way into Springfield. I knew there were all these people out there that wanted me, my money, and my plan. I didn’t have a plan or money, so I lived scared. I thought people would somehow find out I was coming back to Springfield, and they would be waiting for my plane to land so they could serve me with their lawsuit, or beat the money out of me, I didn’t know.

To see me walking around during that trip, I definitely looked like a Secret Service agent. I was constantly scanning, looking for people that I knew where civil process servers or people that act like civil process servers might act. I watched my mirrors, scanning for any cars that might be following. I drove by our house twice before I would pull into the driveway and open the garage. I told Amy to not tell anyone I was coming to town, but I somehow thought she would tell one of her friends who would tell another and then another, and before I knew it, everyone I owed money would be there waiting for me.

Peace is something I didn’t even think was possible back in November. I am amazed the difference a couple of months has made. While I won’t have financial independence until everyone is paid in full; I certainly am enjoying financial peace, thanks to a plan.

Today is a historic day.? After placing this pile of bills in the mail, our total indebtedness has now dropped below the $500,000 mark.? I did have one more paid in full in this pile, so now there are only 32 more creditors to go.? March makes the second consecutive month where I was able to send every creditor or person that I owe a payment.? April will be good as well, as I will get back to Springfield for?a few days at least, and sell almost everything in our house, along with the house itself.? I would say we should hit less than $400,000 by the end of May if not sooner.? Be sure to use the link on the sidebar to keep up with our progress as we establish our new way of life!

If you have been following along, you know for the last week and a half I have been talking about baby step 2, dumping debt, from Dave Ramsey’s book and way of life, The Total Money Makeover.? Within step two, there are six keys to dumping debt forever and changing your family tree.? I have talked about how I have applied each of the previous five keys, and today I am going to explain in simple terms what the debt snowball is, and how I am using it.? Of course, you are going to want to read the book for greater details if you have not done that already (in case you are wondering I don’t work for Dave Ramsey, at least not yet anyway; although Nashville is a beautiful city;-).

The debt snowball works like this.? You take every single person you owe money and you list them out with the total balance and the minimum monthly payment.? You place the creditor or individual you owe the least at the top of the list, and order them in that fashion where the creditor at the bottom of the list is the one you owe the most money.? Utilizing your monthly cash flow plan (budget), you make sure and pay everyone in your list at least the minimum payment every month.? As you do some of the other keys, such as selling items, working a second job, etc…You apply all the extra money to the top of the list; absolutely attacking it with all the intensity that you have.? Once the top debt is paid in full, the payment you were making to the top debt transfers down to the next debt, creating the snowball effect.? Then when the new top debt is paid, shift both minimum payments to the new debt that is at the top of the list.? The snowball is really building up steam by this point, and you can immediately see your progress which motivates you to do more.

In my case, when I listed everything out, I had about 25 debts that did not have a minimum payment because they were due in full or in fact past due in full.? I also did not have money to pay any of these in full, or else I could not pay the others at all, so I had to create a formula.? I placed all of the debts in a spreadsheet, determined what percentage of the debt that each one accounted for, and then plugged in the amount extra that I had in my budget after the four walls were taken care of and all the other minimum payments were met.? I then used that number as my minimum payment for each.

Of the 25, at least 20 of these creditors or individuals wanted considerably more than I was able to pay them.? While I was not able to make them happy with this system, they have all at least been patient.? Fortunately, several of them have heard of Dave Ramsey and understand that it is a system that works.? Since I have started this system, I have not been sued, yet.? American Express has threatened to go ahead and do that at least once weekly, and refuses to accept any payment plan of any kind, but even they have not done anything more than harass me so far.? Despite what they are doing, I still send them a payment every month.? That is a hard, but important part, no matter how mean and no matter how nice, I am fair with what I send.? I don’t send less to people that have evil collections departments (American Express), or more to friends, unless they are at the top of the snowball.

There are other people in the system that I would love to pay first and to pay more, but I feel if I move outside of this system, it will create huge issues for me with some creditors that I owe a substantial amount.? I am sure they would see that as unfair, and immediately lose patience.? To counteract that, my only reaction has to be to get more intense about getting the snowball running down the hill.? So far, every month since January I have knocked at least four off of the top of the snowball.? With getting back to Springfield, at least for a short time in April, I am sure I will get at least that many taken care of next month as well, as I sell virtually everything we own.

Jeremiah asked me last night when I could take him to play golf.? We looked at the refrigerator that has all 53 of our original creditors on it.? Twenty of them right now have a red line through them.? I told Jeremiah as soon as we get all of those crossed off of our snowball.? That will be a good round of golf!

On the afternoon of October 14th, 2003, two extraodinary events occurred.  First, the Sheriff called me in to the Chief Deputy’s office, dramatically closed the door (like I may be in trouble) and then proceeded to inform me they were promoting me to Sergeant.  Within one hour, my phone rang.  It was SFC Newsome, the training NCO for my Army Reserve unit.? He informed me that my commissioning had finally come through after an eighteen month process.  I proceeded over to my reserve unit where I was sworn in and signed my oath of office as a Lieutenant in the United States Army.

In case you are not familiar with law enforcement or military rank structure, the two above events are very significant.  Many very talented and deserving police officers will go their entire career without achieving the rank of Sergeant.  It is extremely competitive, and most officers, especially those with rank, love their jobs; so there is little turnover.

Every since that day, and even to a large degree prior to that day, there is one thing that I have been used to; I am used to being in charge.? As a police officer, whether it is a traffic stop, domestic disturbance, or just taking a report, I was always in charge.  As an officer in the United States Army, I am in charge.  As the owner of The Lazy Susan, I was in charge.  This is my personality, and is what I enjoy doing.  I like to make the big decisions.

Earlier this year I found myself in an awkward position.  In doing my budget, I couldn’t quite pay everyone I owed with the income I had every month.  The thing I did have was extra time most evenings that was available to me.  I used to think that if I couldn’t make at least $25 per hour it wasn’t worth being away from my family.  My paradigm has totally shifted now.  If I can do anything to speed my progress of getting out of debt, then it is worth my time.  My entire focus and drive is dedicated to getting out of debt forever, and doing it all in four years.

I then had to go out and try to find a temporary job that I knew I could learn quickly that would make a decent amount of money. I first went to TGI Friday’s, but they never returned my call. I only had nine weeks left in Columbia, South Carolina at that time.  Next I went to the Texas Roadhouse. I suddenly found myself hired, and training the next six consecutive days, at minimum wage, so that I could be a server. I now find myself back in a restaurant, only this time I have absolutely no say on what goes on. It is a very humbling place to find myself to say the least.  As a nine year police veteran, fourteen years in the Army, I have to have a nineteen year old college student check my silverware and tables before I can go home. As much as I dread having to leave my family to go to this extra evening job, I love what it does to our monthly budget.

Intensity really does make all of the difference.  By utilizing these keys to dumping debt, I am able to see the progress immediately.  I have absolutely become gazelle intense since February 12th.  I have sold four of my guns (a police officer has great difficulty parting with his guns), I have a second job, I have quit borrowing money for any reason, I have made saving a way of life, I pray daily about our current situation, and tomorrow I will talk about using the debt snowball.? As you can tell by the timestamp on this post, I have really made Proverbs 6:4-5 my daily battle cry, I am allowing no sleep to come to my eyes, nor rest to my eyelids, but I am freeing myself like a gazelle from the hand of the hunter.  Intensity is required, as is a second job in order for me to dump my debt.

One other side note, be sure to keep up with the conversations in the comments section of each post.? I welcome all comments, both positive and negative.  A good conversation from the weekend can be found on the post for “Make Saving a Way of Life.”

Selling something is not only the fourth key to step 2, dumping debt; it is also what got my whole blog started.? Commenting on this post?made me realize that a lot of people who I couldn’t talk into reading a book, or might be offended if I mailed them a book; would probably enjoy coming to a blog that talked about something that everyone goes through but no one talks about.? (By the way, the offline offer from my mother-in-law was way too low, so please let me know if you want my leather couch.)

Realizing that I have brought only enough stuff with me to fit into a motel room that I have been living in for almost six months now, I realize that I don’t miss anything from my house.? I could easily live without anything there.? In fact, I set around dreaming of how much certain things are going to bring on ebay when I get home next month.? I also dream of how much my house has gone up in value, making me love the idea of selling it.? I can easily live in a one bedroom apartment for the next four years until I am out of debt.? Even this motel room with all four of us isn’t bad.

Selling stuff is a great way to add what I call the multiplication factor to dumping debt.? If you amortize my current debt with what I budget each month on paying it, we are looking at about a fifteen year re-payment plan.? By selling stuff, and being more intense with our budget, I am confident we will be debt free by 2010.? The nice thing is when we get there, we won’t have so much clutter in our lives because we have sold all of our junk that we thought we had to have, but never needed.

On a side note, I did not intentionally?skip key number?3, prayer.? You can always go to Amy’s web site for plenty of posts on this topic.? I do want to ask that you please pray about our immediate future.? Everything that was so clear for so long has suddenly become unknown.? There are a lot of opportunities in a lot of directions, and I am out of time on picking a direction.? In addition,?at any moment I?could lose the opportunity to even choose, so please pray!?