Money Makeover Getting Results

Getting out of debt is not easy as our "Money Makeover" couple Tim and Nina Davis know. They started working with The Early Show's financial expert Dave Ramsey four months ago and are beginning to shave away their debt.

Just this week, the family hit a major financial milestone, paying off some back taxes.

"Well, it was our first goal since we started the 'Total Money Makeover' and it was hard because it was such a big number to start with. And it would have been a lot easier to pay some of our smaller credit cards first, but the importance of the real estate taxes made it the priority," says Nina. "And we had hoped we would be able to pay those out of our budget just excess monies from our budget.

"But after a couple months we could see it was taking all of our resources from income just to maintain our expenses. So about a month ago, we started thinking of other alternatives that we might come up with to pay those taxes and really get the debt snowball going. We cashed in a small whole life policy that brought us a little over $2,000. And then we sold a third vehicle. Yesterday, we wrote the check and mailed it and we are paid up on real estate taxes."

Ramsey had some great tips for the Davis family. They included cashing out their life policy, negotiating with credit companies and even selling the third family car, Tim's truck.

Tim says parting with his truck wasn't too bad. "I know it was something that needed to be done. It made it a little bit easier," he tells The Early Show co-anchor Hannah Storm.

Asked how it feels to have this $4,000 debt off his back, Tim says: "It feels great. I mean, it's something hanging over our heads for a while. We had big relief that we finally it taken care of."

When Dave Ramsey began working with Tim and Nina, they were in pretty bad financial shape.

"They were behind on a lot of things, credit cards and real estate taxes were behind. Just getting them up to current has been the first big step," Ramsey recalls. "You know, it's just a matter of doing the little things. We've talked — Tim and Nina and I have talked over the phone. It's a matter of incremental progress. My favorite book is the 'Tortoise and the Hare.' The tortoise always wins the race."

Tim got a higher paying job, while Nina got a second part-time job. In addition, the couple began selling off some of their antique glassware on eBay.

Nina says her new part-time job has made a big difference.

"It's been for a lot of reasons. The extra money is about $400 a month, but that's big," she says. "We decided ahead of time that we would take a hundred percent of that money and put it toward debt or else once we decided to sell the truck toward saving for another car. So that's been big. But it made our family work together. With me being gone on Friday evening and Saturday, the kids and Tim take care of the grocery shopping and the laundry and some other things so it's helped us as a family, too."

Meanwhile, the couple's teenage daughter Lacy got a summer job at a youth camp, and is now paying some of her own expenses.

Asked if the process of financial recovery is going slower than he thought or whether it is easy to stay motivated, Tim says: "Well, it is going slower than we thought it would. Sometimes it's been a little trouble to stay motivated but we've managed to keep it going."

Dave Ramsey says incremental changes, coupled with a game plan can get the job done.

"I like the theme of this whole discussion this morning … It's going to be incremental," Ramsey explains. "Develop a long-term game plan. Where do you want to be when you grow up? Where do you want to be five years, 20 years from now? It's a step-by-step thing. We want to microwave everything but personal finance is a crock pot."