Our guest blogger today is Billy Richardson, a partner of CatalystVETS. Billy Richardson, DVM graduated from the Auburn University, College of Veterinary Medicine in 2005. He has practiced small animal medicine in Florida, California and North Carolina. He is an associate veterinarian at Preston Animal Hospital in Morrisville, NC.
I’m so tired of reading all the posts about rising student, debt load and low, starting salaries for new graduates. Every veterinary journal I pick up has at least one article referring to the “doom and gloom” of our profession and no real solution to the many problems. Shut-up!!! Quit whining and do something about it!
Like many of you in the veterinary profession, I was going to do whatever it took to go to vet school no matter what the costs. I remember thinking how I didn’t care how much money I would make as a veterinarian…I would do it for free. Then reality struck!
I graduated vet school in 2005 with a whopping $89,000 in student loans and it didn’t even bother me. I thought to myself – “No big deal everyone has student loans.” I remember someone telling me it was “free money” and to borrow as much as I needed because I would never get money that cheap again.
The reality is that it is NOT fee money, but rather, a boat anchor hanging around your neck. It is appalling to me that 7 out of 10 Americans are living paycheck to paycheck and these are the same people we are trying to be like and trusting with our financial future.
After graduation, my friends, family, and even my boss continued to give me bad financial advice. Three months into entering the work force, everyone was telling me how stupid it was for me to rent and throw money away. I remember everyone telling me how strong the Florida real estate market was, houses were appreciating at nearly 20% and it was such a “wise” investment. So what did I do? I bought a $175,000 house in Florida at the peak of the market! I put 0% down and took out an 80/20 loan with a 5-year ARM. Not once did anyone tell me this was a horrible idea (not even the bank!) or could they prepare me for what lied ahead!
Unfortunately, my bad habits continued because that is what everyone else was doing. Now, I’m a bachelor out of school with a new home and no furniture, so what do I NEED? – A 60” big screen TV for $2,500. I proceeded to buy a brand new sectional sofa, washer & dryer, lawn mower, bedroom suite with all the fixings, and newly installed hardwood floors. I became very familiar with phrase “No interest same as cash.” Remember, those student loans are “free money” and I’m a doctor so I deserve all this stuff.
A few months passed, and the engine blew on my 95 4-Runner. So what do I need….a new 4-Runner. I’m a doctor, right! I went to the dealer and financed a new 4-Runner.
By the time the smoke had cleared and the damage was done, I had amassed over $300,000 in total debt. I was clearly headed down a road marked for disaster. Funny thing is…I was so thankful vet school had given me that “free money” to attend, and I had just spent the last two years just doing what everyone else was doing….right?
In October 2007, I found something that changed my life forever…
At the time, I was engaged to my wife, Nikki, and as part of our pre-marital counseling our pastor advised us about a financial guy named Dave Ramsey. Our church was going to be leading Dave Ramsey’s course Financial Peace University (FPU) that would teach us how to be a better steward with our finances and save for retirement.
At first, we were a bit skeptic about attending a financial class and discussing finances with our peers. I mean we were “doing well” right? We didn’t need any help with our finances… We had a home, new car, new furniture and a big screen TV. Needless to say, I’m thankful we decided to sign up!
After the first class of FPU, we were hooked – we “shaved our head and drank the Kool-Aid!” Not only did this course help us get on the same page about money and unify our marriage, BUT most importantly it gave us a plan.
During this time, we learned to budget and vowed not to borrow money again! I cut up all my credit card- all 9 of them! I took extra emergency shifts, relief work and continued to grow my clients and my income. We did a budget every month and still continue doing one 7 years later. We even started facilitating FPU at our church so we could help others learn how to manage money and get out of debt or plan for retirement. By facilitating FPU, we remained accountable to complete the Baby Steps and stay consistent with what Dave teaches.
We started attacking our debt snowball with “gazelle intensity”. I sold my home in Florida June 2008 and was thankful just to break even on the house. Slowly I started paying off my small student loans one by one and the momentum started to build as the snowball rolled down the hill. This program was really working! I remember getting a letter from the Toyota finance department telling us to basically slow down on paying off our car – urging us to “take a vacation with the extra money.”
After our first year of marriage, we moved to Los Angeles and our cost of living sky -rocketed. We rented a 2-bedroom condo for $2,700/month. This year we didn’t make a lot of progress on our debt snowball but we continued to follow the plan we had in place and work through the baby steps. We stayed encouraged and continued to live the way Dave Ramsey teaches.
Four years after it all began, on January 1st 2012 we were completely DEBT-FREE – we actually eliminated $60,000 in debt the very last year!!!
There is nothing about getting out of debt that is easy. And FPU is definitely not a get rich quick kind of program –it is about the business of crock-pots and not microwaves. We had to make sacrifices along the way and had to say “No” to things we originally had been saying “Yes” too. Our friends and family teased us and poked fun, but we remained persistent to plan…now, they are asking us for financial advice. It was a major behavior change!
Nikki and I moved to Raleigh in the spring, 2013 to get back closer to friends and family. This past April, we just bought our first house together after 6 years of marriage and we continue to live the way Dave teaches. We don’t have any consumer debt and that is extremely freeing.
I don’t write this article to gloat about what we accomplished, but rather, to give you hope and encouragement that you don’t have to be like everyone else.
Could I have done things differently paying for vet school? Yes, absolutely! Are student loans “free money? “ Not exactly! Would I advise a student to borrow $200,000+ to go to vet school? No, I definitely would not even it crushed their dreams.
We must take responsibility for our financial misbehavior –and pull up our boot straps and go to work because no government program is going to bail us out! Check out an FPU course near you.
Our animal hospital just completed our first year of Dave Ramsey’s program CORE Financial Wellness in the work place. I would be happy to provide you with details to get your own course started at your hospital.
This stuff isn’t rocket science but it does require behavior change—BE WEIRD and GET that debt paid off!