27 July 2010
Small expenses can add up. Right there that will be approx $175-200. Each by itself isn't much but combined it makes a big dent. We had many more crazy small expenses before we began budgeting 2 yrs ago. Over time we've found more & more that we need less & less!
21 July 2010
20 July 2010
We've become passionate about our desire to get out of debt and begin "Living like no one else"! If you recognize the quote, yes we are HUGE Dave Ramsey fans. There are no gimmicks to his thought process and his plan is just common sense chunked into "baby steps" that are easy to follow. We read his book Total Money Makeover 2 years ago this month! I read it in 1.5 days and DH read it in a few days too. We were sold out and addicted from that moment. The lightbulb had finally turned on!
The baby steps are:
Baby Step 0: Get current on all bills and live within your means (stop borrowing!)
Baby Step 1: Set up Baby Emergency Fund (BEF) of $1000
Baby Step 2: Pay off all non-mortgage debt
Baby Step 3: Save 3-6 months expenses aka Fully Funded Emergency Fund (FFEF)
Baby Step 4: 15% into Roth IRAs and pretax retirement
Baby Step 5: College Funding
Baby Step 6: Pay off home early
Baby Step 7: Build wealth & give!
The above is a simple plan but requires a lot of discipline and saying "NO" to everyone in your life!
We discovered this plan just before we would have nose-dived into a black abyss. When we did our first budget, we quickly realized why we had more month than money! The budget listed out all minimum payments and all bills we currently had. There was no wiggle room to save or go out! In order to get to baby step 1, we had to sell some stuff. We started putting stuff on ebay we no longer needed and saved up $800 between Aug-Sep 08. (Hooray!) We began cutting things that weren't necessary and paying attention to our money. We had finally gotten our $1K saved just in time for DH to lose his job.
That was God's first test of our maturity. We passed with flying colors! With that money saved, we didn't feel super-stressed and knew we'd find him something else. Sure, we cried for a moment to let the emotion out. He did find a job just as the money was running out and my income was sustaining us. There was no dining or fun during that time because we made up our minds not to fall back on credit cards. We replenished our BEF with his new job paying better and by January 09 we were moving on to Baby step 2! Along the way Murphy has popped up and slowed us down in paying off debt but as long as we breathe air, the unexpected will occur. In 2009, we paid off over $55K ($8k tax return, sold Volvo for $17k and only owed $9K so the rest paid off credit and all other debts paid were from our income and paying attention)!
January 2010, we dropped FIOS cable to get even crazier about getting out of debt. Hulu.com and Netflix provide a much cheaper form of entertainment. We had to save cash for a replacement to DH's Jeep and so we paused paying off debt to get him a newer vehicle. We've been cash-flowing a lot of things recently but our debt reduction is still in our sights. This month we've sat down and we've found more things we are willing to give up to become debt-free sooner. Our goal is to be out of debt by next summer! Our 10th anniversary is next spring and we hope to take the kids on a trip around the States in celebration before moving on to baby step 3!
But alas, I find that my personal thoughts get buried very quickly amongst everyone else's thoughts. So, here I shall journal mine/our thoughts. I've created this blog mainly to share our journey to becoming debt-free with everyone but who knows...it may have other random parts of our lives sprinkled in since finances affect so much of our lives in general!