2016 commenced with an eye opener for my husband and I. To begin with we were getting further and further in debt and our kids were getting closer and closer to college. Second, we had become so stressed. God had blessed our lives in so many ways yet we seemed to stay stressed out 90% of the time.
We have both been amazing spenders, throughout our marriage; often arguing who exactly was the better spender (pointing the finger at each other). We both work fulltime and we both make a decent paycheck, yet before payday we always find ourselves pretty much broke. Though we could possibly win the Olympics in spending, we both fall way short when it comes to saving. I have often argued with my “financially wise” friends that we can’t take it with us when we die, why not spend it!
The beginning of the year was met with the usual resolutions: lose weight, spend more time with God, cook more, simplify my life, blah blah blah.
Then one day, as I was ready through my emails, I came across an article that was about the importance of teaching your kids financial responsibility. As I read through it, I realized that the life that they wanted the future generation to avoid was very similar to the life my husband and I were living, and the end result of that life was no retirement…EVER.
WHAT?!?! I had to retire…There were so many things that I wanted to do and how was I supposed to teach my kids about financial responsibility, if I was not practicing it.
I decided then and there that I did not want to live this way anymore, my husband agreed and I knew for sure this way of life was NOT pleasing God!!!
I sat down and began to do research on getting out of debt.
One of the coolest things I came across was Dave Ramsey’s debt snowball. Now I’m not going to lie. This was not the first time I had met Dave Ramsey. A similar proclamation had occurred several years before when we decided to buy a new house and we knew the only way we could afford it was if we paid some stuff off…and we did. We got our house and then our newfound financial wisdom was left in the dust…well I needed to decorate this new house!!! Didn’t I?!?!? <——excuses!!!
I entered all of our information into the debt snowball and realized that it was possible to pay off everything, except our house, in 2 years!!! And if I didn’t include our vehicles, it could be done in less than a year!!!! This was awesome!!! I was so excited to get started.
Next, I created a budget for the entire year…then I realized that there was a serious problem. Our expenses exceeded our income!!! Ok, so what was I supposed to do? I needed an extra $500-$1000 a month!!!
Luckily I have an AMAZING GOD that takes care of me regardless of my recklessness. He may have to use drastic measures to get my attention but He is there with me the whole time.
I knew there was a solution…
I had to figure something out, so we made a plan.
- Have a family meeting to get everyone on the same page. This was an important step for us because my kids had a false sense of reality when it comes to money. Apparently they thought we had an unending supply of it!
- Sign up for Dave Ramsey’s getting started guide…He will send you free resources including the debt snowball.
- Enter all bills into the debt snowball. This is a very inspiring step that allows you to see what is possible in a reasonable amount of time.
- Create a budget for an entire year. Here is my Yearly Budget if you would like to use it (be sure to include tithes, groceries, gas, kid expenses, and anything else that you sometimes forget about).
- Figure out ways to lower necessary bills and get rid of extras. I started by calling my auto insurance and I was able to get my policy reduced by about $40 a month. There are so many discounts available that people do not realize. I got a discount for being a member of the National Society of Collegiate Scholars!! Next, I called my electric company I went from paying an average of .21 cents per kilowatt to .11 cents!!! I also found out that leaving cell phone chargers plugged in cost money. We will see how this reflects on my bill. I did not have any luck with my cell phone company because we already receive an 18% employee discount from my husband’s company, but this is definitely a place where most people can save money considering the steep competitive market. We got our satellite bill cut in half by telling them we were going to go back to cable. So just by making a few phone calls, we knock about $200 off of our monthly bills. Keep an eye on your bills though…they like to sneak those prices right back up. We noticed that we had been paying for insurance on some of our bills (credit cards, cell phone, and a personal loan). We cancelled all of the extras like this on our bills.
- Sell everything we don’t need or love (1st step to my simplified life!!!) I sold our valuable items on eBay and made about $800 and the rest we sold in a garage sell and made about $500. Here is my Purging list of things that were easy to get rid of.
- Cancel extra subscriptions…This was a hard one for me. I had grown to LOVE my Stitch Fix (as I mentioned here) but this new lifestyle was about sacrifices and this was something that had to go (temporarily!!!). Our monthly subscriptions that were putting a huge dent in our budget consisted of…
Xbox Live <——- not sad about this one at all!!!
Netflix (Ok so I only got rid of part of this one)
This one step saved us over $500 a month and this will be my treat for getting out of debt
- Find ways to make a little extra cash!!! I did so well on eBay that I continued selling on there. Here is a LISTof things that sell good on eBay. I also signed up for Ebates and Bing rewards. Check out my post here for more details on how to make extra cash.
- Start a savings. Make a point to put a little into a savings account, even if it is only $10. We started by putting $20 each paycheck into an account that is not immediately accessible (They have to mail us a check if we want it).
- Set some reasonable goals. When I started thinking about my goals I pictured what I wanted to accomplish in 1 year. My goals at this point were
Build my savings account to $1000 (suggested by Mr. Ramsey)
Start both kids a savings account and start teaching them about financial responsibility
Figure out a way to tackle my grocery bill
Pay off and cancel ALL credit cards
Embrace a simpler lifestyle
Start a blog that will hopefully pay off my student loans when I graduate!
We had a long road ahead of us but it was going to be worth it!!!
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