Latest posts by Ellen McLaughlin (see all)
- The Journey to Financial Freedom: Ellen McLaughlin’s Story - September 7, 2015
Hello! My name is Ellen McLaughlin. I’m 55 and work in Tech Support in the Financial Software Industry. My husband is 53 and is self-employed with his own home repair business. We’ve been married for 27 years. We have 2 adult children.
Growing up, I cannot remember my parents ever talking about money or finances with me. It was just not discussed. We were lower to middle class and were comfortable but never lived a lavish life. I had to buy most of my clothes and any extras that I wanted. My husband comes from a family of 6 children and things were very tight in their home growing up. He moved out of the house as soon as he turned 18 and never went back.
When we first got married, we were lucky if we made together over $20,000 a year. What did we do? Well, I was in my first job out of college and he was working as a cook. We found someplace that we could afford. We did what most newlywed couples do. We scraped together some furniture and household items. I don’t recall ever saving or even thinking of saving. We just spent everything we made. The paycheck came in and after paying bills we spent it all. Soon I started signing up for more credit cards for what we could not buy with cash. We didn’t live a life of luxury and certainly didn’t buy a lot of expensive things. Still, we did not pay too much attention to what we were spending and had no real plan for our finances.
Bought Our Home & Got a HELOC
Our income continued to increase and we eventually bought a house. We still live in this house today. We could not afford much at the time we bought the house. So it is very modest and on the smaller side. A few years later, it needed some attention and repairs so we decided to take out a Home Equity Line of Credit. This is commonly referred to a HELOC for short. This was at the height of the real estate boom in Florida so our house we were told was “worth more” and we were given a generous line of credit by our bank.
What did we do with the money? We bought a small flats fishing boat. This had always been a dream of my husband to own a boat. We did a lot of remodeling on the house and paid off some of the credit cards we had accumulated over the years. We still had available credit on our HELOC. So what did I do? I paid off more credit cards under my name and other credit cards in both our names. By then we owed about $50,000 on this HELOC.
At the time, we were still not putting anything into savings. I was putting the minimum in my 401k at 6% to get the 3% company match. My husband became self-employed and was not putting anything in retirement. I really don’t know what we were thinking all those years!
Recent Years & The Plan
Fast forward to 2014: A friend posted something on Facebook that eventually lead me to Dave Ramsey. I was so fed up! I was scared as retirement age is approaching. I was ready to do something but instead I played around with budgeting in my head for about 6 months. I was not really following any plan much less following Dave’s advice.
In April 2015 I decided I was ready. Enough was enough! I was sick and tired of being sick and tired. I say “I” because my husband is not completely on board at this time with The Total Money Makeover plan and the 7 baby steps. Thankfully he lets me do whatever I want regarding finances since I manage the bills in our family. Just when I’m ready to do it for real, Every Dollar comes out. I did a budget for the very first time in my life in April 2015, at the age of 55! So it’s never too late to start!
We had a few thousand in our savings account when we first started getting serious about our finances. Please don’t ask me how! We had two zero interest loans that I was going to keep paying monthly and pretend that we were on baby step 3 – saving 3 to 6 months in our emergency fund. After careful consideration I quickly decided to pay them off in full and tackle baby step 3 head on for real. It felt absolutely GREAT! We are now one month away from completing baby step 3! We will then move onto working on baby steps 4 and 6 at the same time by October.
We plan to be in baby step 7 by December 2017 – COMPLETELY debt free!
You might wonder about that great HELOC the bank offered us right? We’re paying it off with our mortgage in baby step 6 because of the size but also because we are in our 50’s and don’t have nearly enough for retirement. We need to be in baby step 4 as soon as possible!
Jonathan Key asked me a few questions relating to my journey and so here is some of my advice.
Jonathan: 1. What were one or two of your greatest struggles before finding Dave Ramsey?
Ellen: Not saving for sure! We were just going through life without a care in the world! Everything was going to be okay! If something happened we had our credit cards to fall back on. Also retirement was and is a big struggle. We did not realize how much we would need at retirement and did not make plans until recently. We went from feeling helpless about it to feeling empowered with a game plan!
Jonathan: 2. How did you overcome them?
Ellen: I very quickly found places that we could cut expenses. We have been paying off the remaining debts with the debt snowball as quickly as possible to get our baby step 3 fully funded emergency fund complete. Now that I’m actually paying attention to where the money goes, it’s amazing how much I can get out the budget each month to put towards savings and debt.
Jonathan: 3. What are some of the greatest things you’ve learned?
Ellen: I’m surprisingly becoming a minimalist. I don’t want “stuff” anymore so it’s easier to follow the plan when you really don’t want the things you used to buy. I believe I’m more content as well. I have given up the idea of needing a bigger house and realize now that is a want. I think I was really wanting to buy a house in order to “keep up with the Joneses” as the saying goes. I don’t want to be the Jones’s! They’re broke and in debt to their ears!
Jonathan: 4. What advice would you give to someone starting out?
Ellen: This is especially for younger people. Don’t get into debt to begin with! But if you are, follow the 7 baby steps and get out as soon as you can! And remember three words: save, save, save! Save for emergencies, save for purchases to buy with stuff cash, and save for retirement!
Jonathan: 5. What advice would you give to someone struggling?
Ellen: Keep going, no matter what! Be proud that you have started turning your life around and know that it will get so much better! Keep up the gazelle intensity and remember each day is a new day. It may be hard to give up things that you want but you may find that you no longer want them!
Ellen: If I can help give hope to anyone to get on track early in life, then it would make me so happy! I’d also like to encourage those in the later seasons of life to get started and keeping moving forward. I’m still hoping that my dear husband will see what I’m doing and get on board so we can really knock this debt out of the park! I’ve always been the spender but it would really be great for him to see what I’m seeing in the Dave Ramsey plan!
Check out my friends Jenn Custer and Rachel Gause‘s Journeys to Financial Freedom too!
If you are interested in learning more about the 7 Baby Steps we have a Facebook group with about 5000 people going through the book Total Money Makeover by Dave Ramsey this month. We are on chapter two! So join in today if you would like to turn your finances around!