The Simple Steps We Are Taking To Pay Down Our Debt
We are paying off our debt!
Who the hell shouts that from the roof tops? And is excited to share something as personal as money woes? Me! Me! Me!
Let me preface this by saying I’ve never balanced a check book. I mean, I tried, maybe like twice, but it didn’t do it for me.
We never had a plan of attack. It seemed as if we always had a bill, a vacation, an occasion we had to expense.
It was exhausting to keep up.
It wasn’t until a dear friend, and mindset business coach, took me through a program she developed that got me uber focused. I was tired of not being in a position to live out my dream without my day job keeping me in the safety zone. So I started to take steps to get things under control and finances is where it started for me.
I’ll give you my tips to get started with paying down your debt and the resources to lean on during it all.
Fair warning…you will have all the emotions.
Overwhelm, fear, anger, excitement, impatience, anger again. But you will also be extra motivated to get out of the situation you’re in and stay out of it for good. You’ll be planning for the future more than you ever had before knowing you can invest, give and enjoy more than ever.
But it’s hard. Real hard to not splurge. Give up. Dive right back into our FOMO ways.
Pinterest is my guilty pleasure right now.
Pinning, planning, pinning. Look at my dream kitchen board! This is what keeps me focused.
Get your partner on board. Get your family and friends on board. Brag about it like it’s the newest pair of boots you you just got and everyone wants.
It’s a feel good addiction that you will want to share with people. Because guess what???? The statistics are likely the same for those you’re sharing it with!
Debt is normal. For most of the world, but not for us anymore. We want to…
“Live like no one else now so we can later live like no one else.” - Dave Ramsey
Here are the things you need to know about us:
I have a great paying salary job. I work in the tech industry and work hard to be a level that I’m at today. I get quarterly bonuses that help every step of the way. I’m truly blessed here. But you don’t need to have a high paying salary to make this work for you. There are countless single income success stories in Dave Ramsey’s book to give you hope and encouragement. This book has been my guiding light.
My husband is a PE teacher in the Catholic School system.
We started with a lot of debt. That’s credit cards we are paying interest on, a car payment, medical bills from the birth of our daughter, and a dumb, dumb, dumb timeshare we purchased about 4 years ago. I’m sure our debt is over this amount in the interest we are paying monthly. Insert angry face.
Neither of us have, or have ever had, any student loan debt. Hard working, athletic scholarships contributed for us both (he played hockey and I played softball) and loving and hard working parents and family who supported our education as well. Forever grateful.
Neither of us invest to our 401k right now. It helps bring in more income to pay down faster. This is temporary.
We’ve been married 5 years and are still not fully merged with our finances. This has been a process. If you have a partner, this needs to be a team-effort. If you are single, you can still do this!
We have FOMO. There’s a trip to take but we didn’t make a smart decision to pay in cash or just say no.
It takes work. It’s taken work for my husband and I to agree to do this as a partnership. We’ve had heated discussions throughout. Don’t give up on each other if you find resistance. It’s a change which is hard, but you both will be happier for it in the end.
Here’s how to get started:
Download Dave Ramsey’s Total Money Makeover and read it today. This is where I started.
Put together a spreadsheet of your finances. This took me a few hours to pull together. Remember, I didn’t track it all to begin with so I had to unlock passwords and review my bank statement to know what we were paying for month to month.
List out your debt from smallest to largest. List out your monthly minimums for each, and their due dates.
Save $1000 immediately in Emergency Funds. This will help when you have brakes that need replaced, a furnace that needs serviced, things that you don’t expect. The rule is, if you need to tap into it, you stop paying on the smallest debt (expect for the minimum) and build up the emergency fund again before you dive back in.
Set a zero dollar budget. I’ll admit, since I’m newish to budgeting, I’ve given myself a $150-$200 buffer just in case I miscalculate. It’s saved me a few times. If I don’t need it, it rolls over to pay off the smallest debt.
Only pay the minimum, except on the smallest debt.
Budget fun money. I feel super guilty purchasing anything that’s not a bill these days. I’ve walked into Target and out of there with just the things we’ve needed. I spend more time shopping online so I can see what my total is before and do curbside or in store pickups to avoid isle lurking. This is hard. REAL HARD. But persevere and it’s all worth it.
Stop investing in your 401k. At least for now. This gives you more income to pay down debt faster. It’s everything they tell you not to do, right?! But Dave Ramsey suggests to sacrifice putting this on hold for a short while while you get out of debt so you can maximize on it for decades following.
Pay in cash. No more credit cards. No more finance plan purchases. Pay for all things in cash!
Where we are headed:
Paying off our debt by June 2019! We started our pay down debt journey in March 2018 and will be finished in 15-months. I tell myself all the time that I wish I would have started this plan sooner. Like in my 20s sooner. That would have just allowed more freedom and less stress today but it’s not too late to start. So we just started where we were.
Saving up 3-6 months in emergency funds. I’m shooting for 6 months in savings.
Reinvest in our 401k. 15% each.
Invest in our home by getting our basement, gutters and exterior fencing fixed in the Summer. BUT, we will pay for it all in cash. It won’t all happen at once. It will be budgeted and phased in when we can make it work. None of these are an emergency but necessary to maintain our home and keep appeal.
Save for College. I want my baby to feel supported. I didn’t even think this was a possibility until much later in life. But, she’s growing so fast. It will be here before we know it! But not too soon I hope:)
Pay down our mortgage. I’ve never thought this would be a possibility. Like ever until we were older and just paid the monthly minimum. We have an 80/20 mortgage which I still don’t know much about but I do know that we make two payments a month. The 20 is our smallest amount, and just forecasting out, we can have this potentially paid off by Dec. 2019! It’s our highest interest rate mortgage too so getting that paid off will be the bees knees!
So, you down to pay off your debt?