Wednesday, August 7, 2013

Budgeting Win.

I don't think I've talked about this on here yet, but a few months ago Sterling and I decided we needed a serious money reform in our household.

We have a pretty good amount of debt. Having Brynleigh racked up close to $6000 in medical bills (thanks, emergency c-section!), we have about $5000 left on our car loan, most of our down payment on the house was taken care of with our tax refund money, but we still had some left over that we owed, then I insisted on getting new carpet in the house, so that was another $1500, then together we have about $60,000 in student loans. That's a lot, right? It sounds pretty scary.

Until a few months ago, we just put the paychecks in our bank account, used our debit cards for anything and everything without really keeping track of our spending, and we only paid the minimums on our debts.

In May, Sterling finally convinced me to start the Dave Ramsey program. I was scared of it, because living on a strict budget just doesn't sound like fun. But I gave in. We ordered Dave's Starter Pack and began our budget the first of June.

In addition to only using cash for everything aside from bills, we're also using the Snowball Method to pay off our debt. Once we pay off our smallest debt, we roll what we were paying on that debt into our payment for the next smallest debt, and so on. So we make increasingly larger payments, and it helps us pay off things pretty quickly.

Last month we paid off our dental bill. And yesterday, I made a payment of $665 toward our loan for the down payment, which paid it off completely! And we paid it off earlier than we were expecting even. That was a pretty proud moment for us. We've been really frugal with our money, so that we're able to make big payments like that! Next month we'll be able to pay off one of our big medical bills, which will be earlier than planned, also.

According to our plan, we should have all our debts except for the student loans paid off by June. Really though, it should be a couple of months earlier, since we're paying off everything else early, and Sterling will have bonuses to put toward the debts that we haven't figured in. So that'll be over $12,000 paid off in less than a year. Can't wait for that.

Then we'll get to the serious stuff. With all the other debt out of the way, we'll be putting everything toward our student loans. Our goal is to have all our student loans paid off by the time Sterling turns 30, so five years. I can't even imagine how good that'll feel. We hope to never go into debt again after that.

Having a firm plan for our money has been such a great thing for us. And it's a safeguard for our marriage too, since most divorces these days are caused over money issues! It's hard living so frugal at times, but we know it'll pay off later. We see all these people our age going out and buying ridiculous things all the time, and now we just shake our heads and talk about how bad of a financial decision that is.

We still go out and have fun, of course, but we have an "Entertainment Budget" we use for that, so we're really choosey on what we do for fun. And I went to Nashville last week (more on that later), and for my spending money there, I just planned in advance and cut back on other budgets and put the remaining in my Nashville fund. I also sold things like clothes I don't wear anymore on a local Facebook virtual yard sale page.

Anyway, I just wanted to share what we've been doing lately, because it really has been working for us! Dave Ramsey is a lifesaver, check him out if you need money help, too! His starter pack is only $45 and is SO worth it.

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