Making the jump to debt-free living

McClatchy Newspapers (MCT) - Adam and Sandi Enzminger know the burden of debt and the freedom of living without it.

The Eagle, Idaho, couple at one time had debt equal to their annual incomes as a delivery driver and an accounting clerk. In 2001, when Sandi was laid off, they still had three years of $500-a-month payments on a pickup and were expecting their first child. Both became frustrated with the financial pressures and not knowing how they would survive on one salary of less than $40,000 a year.

Then Adam heard financial guru Dave Ramsey's national radio show on saving, spending and living debt-free. The family applied the principles from Ramsey's Financial Peace University, and within 18 months, they had saved enough for a small emergency fund. They'd paid off the pickup by selling excess belongings and taking on extra jobs, including pizza delivery and babysitting.

Like the Enzmingers, many Americans are taking a hard look at their finances as they've faced layoffs and wage or hour cuts in this down economy, according to financial experts.

"What I'm seeing now is more people are paying attention to how they're spending," said Robin Hollingsworth, financial educator with the National Financial Education Center at Debt Reduction Services in Boise. "They're having a little more buyers' remorse, and people are cutting back and paying attention to their spending plan, wanting to live within their means, below their means."

Some people may feel like they're circling the drain of financial ruin weighed down by high credit card balances, interest rates and mortgages. They may believe bankruptcy is the only option.

But they can find hope in following the advice of financial management programs and companies, Hollingsworth and others say.

"We help clients pay their debt dollar for dollar," Hollingsworth said. "We work with lenders to lower interest rates so money goes farther. The goal is to have your debt paid off in three to five years."

Financial Peace University takes a slightly different tack by encouraging participants to cut up credit cards, build a cash cushion and save for major purchases.

Salt Lake City-based Zions Bank, which has branches in Utah and Idaho, began promoting Financial Peace University through its Super Savers seminars six years ago after Utah ranked among states with the highest per-capita bankruptcies, said Don Milne, a coordinator with Zions' program to end debt.

Since then, 10,000 people in the two states _ 2,000 of whom were considering bankruptcy _ have graduated from the Zions programs and have saved an average of $14,000 and paid off an average of $20,000 in debt per person, he said.

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The bank also found that only about 20 percent of the attendees were in financial trouble. Half had manageable debt, and the rest had a home loan and a desire to do better.

The program is "very inexpensive and very effective," Milne said. "You can't necessarily fix the entire problem as an individual, but you can fix yourself." Milne wonders whether the nation's financial crisis might have been avoided if more people lived as Dave Ramsey recommends.

"If everybody had three to six months' salary saved up, they would not be freaking," Sandi Enzminger said.

"It seems that most Americans are going along with blinders on, and they don't realize what debt is doing to them," Adam Enzminger added.

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He said they would be sunk if they still had outstanding loans.

"The worry about paying debts is overwhelming," he said.

Sandi Enzminger said it was emotion that carried them through the 18 months it took to eliminate their debt.

"We had no idea how we would make ends meet on less than $40,000 a year, and I was very frightened and angry," she said. "So, we got fired up and started selling things, taking on extra jobs."

The Enzmingers, who have facilitated Financial Peace University at a couple of churches in their area, said saving and paying cash have allowed Sandi to be a stay-at-home mom, now to three children. It's helped the family manage crises _ floodwaters surrounding their home for two weeks and the injury and death of a horse _ without getting into debt or experiencing too much stress.

"It's something that everybody can do," Sandi Enzminger said. "It's scary, but doable." The couple also has the security of life insurance policies and paid $6,000 cash last year for a 2001 minivan with leather seats and a DVD player.

Financial Peace University has been great for their relationship, too, they said.

"It gives you this good feeling that everything is getting done in its proper time, proper way," Adam Enzminger said. "Just knowing about these programs _ knowledge is power."

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© 2008, The Idaho Statesman (Boise, Idaho).