Since I haven’t been blogging lately, I am writing this post as background to another post I plan to write soon.

For our wedding 4 years ago, a good friend gave us a copy of Dave Ramsey‘s Total Money Makeover audio CD set.  In the newness of marriage and our busy-ness with our jobs and all, it ended up sitting forgotten on a shelf.  Then, in the Fall of 2009, with debts mounting and income at a low point, my wife and I were packing for a long road trip and my wife had the foresight to bring it along.  “Might be interesting,” I thought.  But I had no idea who Dave Ramsey was.  He looked like yet another financial guru with yet another vague theory.  We listened (twice) and were blown away.  So much practical wisdom!  And from someone who’s been there, done that.  We immediately began trying to follow what he taught.  Our net worth was negative by about $130,000 at that point.  Most of this was a big consolidation loan from my Medical School days.

But TMMO was just an introduction.  We felt like we needed to learn more, so we signed up for Dave’s Financial Peace University starting in January 2010.  It’s a one-night-per-week course lasting for 13 weeks.  This course was exactly what we needed to fill in the picture and have confidence in making financial decisions. I’m soooooo glad we went.  The one-time $100 cost for the course materials pales in comparison to what we’ve saved since then.  It’s worth every penny.

Just as soon as FPU ended, we received a huge blessing.  April 2010, I was awarded the role of subcontractor and lead developer on a half-million dollar software development contract for a major government institution.  This was providential because it would pay me contractor’s rates (no small amount) to do what I love to do, but with almost zero overhead expense.  Financial peace, here we come!

Things were going well and we were pounding away at our debts like there was no tomorrow, until September of that year when we found out the wonderful news: we were pregnant!  That was great for just about every reason we care about, except financially.  This meant we’d have to pause our Debt Snowball and stockpile cash instead.  That’s because pregnancy can be financially unpredictable, and to avoid going back into debt due to buying all that baby gear or who knows what, it’s necessary to have a reserve to pull from.

So we stockpiled.  And stockpiled.  And stockpiled some more.  During that time, we went back to paying the minimum payments on our debts, which by that time included only one consolidation loan.  As we got nearer and nearer to the due date, my excitement about being able to return to paying down that student loan rekindled.

The delivery came and went.  Our beautiful baby Joshua was born in late May of this year.  He’s a happy, healthy baby who is the delight of our lives!

But now I am facing a new financial problem.  The money from the software contract is due to run out some time this winter.  What will I do for income after that?  Who knows?  I can count at least 6 different options, but nothing is certain at this point. I looked up one of Dave Ramsey’s Endorsed Local Provider investing advisors this summer and gave him the rundown of our situation.  He suggested that instead of using our leftover stockpile to pay down that student loan, that we should keep stockpiling cash.  He said that with such uncertainty about my job and with a new baby (which could accelerate our plans for buying a home), having a big cash cushion can really open up some options.  As excited I am about being debt free, I realized he had a point.  So reluctantly, we decided to keep stockpiling.

Sigh.  Well, at least our net worth is still improving.  As soon as another income stream starts coming in, look out student loan!  You’re outta here.