Monday, January 25, 2010

Eye opening!

Mikie and I have been married for 6 years now. We've been through a lot in those 6 years! We got married, I moved from Va to Texas, we bought a house and had a baby all in the first year. It's amazing how much happened that first year together. We managed to do alright, but we did have to most of our first christmas on credit cards. That was a huge mistake, one of which we're probably still paying for, 5 years later!

We now have two kiddos, two cars, a house and a whole host of credit card debit. My parents introduced us to Dave Ramsey in the summer of 2009. We listened to him in the truck (mikie has xm radio) when we were running errands. We read up on him with his website and eventually got a hold of some of his books. We decided we were sick and tired of being sick and tired. We wanted better for ourselves and our family. We wanted to be debt-free and to be able to build a house. We got such a great deal on the current house but we knew it would be too small before too long.

It's amazing how real your situation becomes when you start to right it down on paper. We sat down together and got real with ourselves. We had more debt than I think we realized. We decided we no longer wanted to live that way. We started our debt snowball list and decided what we needed to do to start getting rid of it.

We currently have about $22,000 in credit card, student loan debts and mikie's truck. My car is at $11,500 and the house is about $43,000. Our goal is to have the $22,000 in credit card, student loan and mikie's truck paid for by December of 2011. That will leave us just my car (by then should be around $6-8,000) and the house. That means we need to pay off $11,000 this year and $11,000 next year to meet our goals.

Budgeting tends to be hard for us since Mikie works concrete and his actually pay check is dependent on the weather and work. He gets paid weekly and we sit down now on Sunday nights to work out the bills and budget. I have started to really work on being "frugal". I clip coupons, shop at multiple stores, buy what's on sale and price match as much as possible. I don't keep a running total of what we save, but I KNOW we're making a huge difference. I manage to spend about $100 a week on groceries (that includes baby stuff, dog food, toiletries, laundry, etc). For a family of 4, I feel that's very reasonable.

So! We've been working our tax refund and it seems we are going to get a nice refun (close to $6,000). We plan to pay off the care credit card ($979), Mikie's truck ($1400ish), Best Buy card (1,382), put $250 in the savings to have a $1000 in our emergency fund. Mikie is getting his crown put on at the end of February and we'll pay cash for it ($850). I am getting my cricut for my birthday and Mikie is getting is $100 that we used for pay bills last month (from his original christmas money). The rest will go towards the next debt to pay, which is the Capital One bill ($1800).

It's amazing how real it all becomes when it's all sitting in front of you. There's no way to hide or ignore the fact we've gotten so much debt. You can't erase it and you can't pretend it doesn't exist. So here it is. We are getting real with our debt. Just by paying those debts off, it will free up about $400-$450 a month to go towards other debt (hence the debt snowball theory).

Our "new years resolution" is to get out of debt. 2 years and then we'll have just my car and the house. After my car is paid off, then we can start to look for land. We want to build. Our goal is to be out of debt and into a new home in 4 years (our 10 year anniversary). Here's to the long road ahead of living like "no one else" so that we can LIVE like no one else!


Cash is King and being Frugal is cool!

1 comment:

mizmarple said...

Getting a tax refund of $6000 means that you have too much federal tax withheld. You are essentially lending that money to the government interest free, and it's money you can use during the year to pay down your debt.

Check you husband's payroll deductions, and recalculate how much you should be deducting.