Like millions of people in the country my husband and I have
debt. We both have student loans, credit cards, care loans, etc. WE HATE IT, we
don’t want to owe people money. Over the last year we have been making sense of
all our debt and coming up with a plan on how to pay it all off, not just the
minimums and then some. This is a big adjustment for our family because we are used
to eating out, driving new cars, buying things we want over just the stuff we
need, ok really we live beyond our means. It is time to change this because we are in
our early 30’s, we have a family, and we want to teach our children that they
can have the better things in life if they save for it and pay cash.
We started the Dave Ramsey program last year and I was not a
big fan of the whole program, but we did take a few good things away from it.
The biggest thing we took away from it is the need to budget our monthly
expenses, as well as some yearly expenses and pay cash for most expenses. For
example, we have budgeted $450 a month towards our groceries. We will take $450
cash at the beginning of the month and place it in an envelope. When we run out
of cash in that envelope we are done for the month. That sure does put the
pressure on to make sure you plan things out and stay within a budget. But, if
we do well at budgeting and planning things out and we have extra money left in
the envelope we can choose to keep the money in that envelope to make things
easier the next month, we can put it in the savings account, or take the few
extra dollars and place it towards the debt we have to pay off.
Some expenses we have each year that we
usually don’t plan out or save for until the end of the year are Christmas
gifts, holiday dinners, and even car repairs.
We know it will be about $500 to get new tires on our car and that will
need to happen in the next year or so. So we have a sinking fund for this, we
took the $500 and divided it by 12 and each month we will put that amount ($42)
in an envelope. This way we have the money and there will not be an issue or
freaking out about where the money will come from when we need new tires. We
will use this same method for Christmas gifts and such for next year. Again,
this way when it comes time to buy gifts for everyone the money (and budget) is
there and there is NO STRESS. We use this same method to plan a vacation a few
years in advance, this way our family makes awesome memories and see the world
but the stress of finances are not there and when we are done we will not have
any more debt from that vacation. In 2012 we took an AMAZING vacation to
Florida and then a cruise to the Bahamas. We visited Clearwater to see Winter
the Dolphin, and a few days at Universal Studios before and after the cruise.
It was amazing and completely paid for before we even left home.
Another important thing we took from our brief jump into the
Dave Ramsey world is an emergency fund. We all have emergencies that come up,
but as soon as we have an emergency fund this emergencies won’t be as
stressful.
I am so excited to make these changes. I think by cutting
out the debit cards and having cash on hand for things we need to buy will keep
us in line. It is so easy to swipe a card and $5 here and $3 there really do
add up before you even realize what is going on.
Our goal for 2015 is to save approx. $10,000 and pay off
about $10,000 in debt. I will keep you updated on how this is going during the
year and some of the things we have done to help meet this goal. I hope you all
can keep me in line.
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