KANSAS CITY, Mo. - The economy has many people heading into debt. Ironically, a man who lost millions is growing in popularity for teaching others to get out of debt.
Certified financial planners around the country are teaching this method on the radio. Turning the dial to one of these programs could turn around your finances.
It worked for Nate and Lori Zehr, whose debt began piling up when the housing market collapsed.
"It was over $60,000," Nate Zehr said.
Nate runs a construction company, and with fewer people buying homes there were fewer dollars coming in. That's not exactly easy to manage when you have two kids, a mortgage, and a car payment. So, the Zehr's used their credit card to pay bills.
"It got to the point where we weren't sure where to go. We just knew there had to be a way to pay it off," Lori Zehr said.
The Zehr's heard about the Dave Ramsey method of managing bills and put it to work. Ramsey is a radio financial expert who bases his method on real life experience. He lost $4 million in just four years.
"Getting out of debt is all about emotions, it is not about the math," Certified Financial Planner Stephen Stricklin said. Stricklin talks about the Ramsey method on the radio and as a certified planner.
Stricklin says to get started, you need to create a budget that includes only essentials like your car, home, food, and clothes.
Then use the money you're saving to set up an emergency fund with at least $1,000.
"The way people get a $1,000 in the bank is you get emotional about it. You either sell stuff, you have garage sales, take an extra job, you do what it takes," Stricklin said.
Finally list your debts in order from the smallest to the largest.
Once you pay off the first debt, you create a snowball effect. Apply the money paid toward the first debt, and combine it with the minimum payment for your next highest bill. Keep applying that method until you are debt free.
Nate and Lori Zehr say they hope to be debt free by the end of next year. They are doing it without using credit cards.
