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Friday, April 30, 2010

Debt-Free Journey

Michael, the boys, and I just got back from Mijo’s to celebrate our DEBT-FREE DAY!!!  We are out of all debt except for the house, and it feels SOOO good!  We drove around a little bit on the way home to get the kids to fall asleep, and we talked about all the changes in our lives in the past six months.  This is our little timeline:

September - Michael succeeded in convincing me to try for a third baby.  His two hard-hitting points were a) we would make things a little easier by not co-sleeping after 4 or 5 months and by giving the occasional bottle, and b) having a relationship with a daughter is way different than sons and very special in a different way.  

October - We decided to get Levi out of our room, so we rearranged the house.  We reestablished occupancy in the master bedroom and moved both the boys and the bunk-bed into the front room.  After a fresh coat of paint for both rooms, everyone was happy.  We also decided to make our room more romantic in order to feel like a married couple and not just parents.  So we redecorated the room and remodeled the bathroom, going way into debt over it.  Prior to this we only had student-loan debt (and the house), but we justified the debt since it was a 0% credit card.  

November - The remodel was complete, but we over-drafted our checking account for the first time in our marriage.  Michael was freaking out over this and started looking into new budgeting software.  

December - We used out 0% credit card to get us out of the mess we created.  Oh, and we got iPhones.  :-/

January - Michael went on a spiritual retreat and read Financial Peace by Dave Ramsey cover to cover.  We also started implementing the new budgeting software that Michael bought called YNAB (You Need A Budget).  

February - Michael was geared up about FP, but I just thought it was another of his perfectionism things and I didn’t want to support that.  At his request I did, however, take over the finances this month.  This was so that I could get an idea for where our money goes, what maintaining it entailed, and so that I could offer educated advice when we made financial decisions together.  At the same time, I was reading Dare to Discipline by James Dobson and getting my mind blown!  Michael read it, too, and our parenting confidence SKYROCKETED!!!  

March - Michael succeeded in convincing me to go to Dave Ramsey’s Financial Peace University, even though I really didn’t think we’d get much out of it.  After we watched the introductory lesson (you know you want to watch it!) at home online, I was totally on board.  We continued slimming down our budget, saving and selling whatever we could.  

April - We made our final debt payment (student loans) hopefully ever!  We were paying toward our debt the whole time, but the last four months we got way intense about it.  It was totally worth all the effort, too.  Now we’re on to baby step #3!

Today Michael and I recounted all of the silly (let's just say it...stupid) financial decisions we have made since turning 18.  There were A LOT!!!  If we had the benefit of hindsight, then we would have done a lot of things differently.  But, as my mother-in-law says, "It is what it is."  Indeed...

Monday, April 12, 2010

Savin' Money

"Live like no one else, so that later you can live like no one else." - Dave Ramsey

As you may know, Michael and I have been going through Dave Ramsey’s Financial Peace University. Seriously, most of you know because we talk about it ALL the time.  I used to be annoyed at the Dave Ramsey evangelists, and now we are them.  We are pretty driven to get out of debt pretty soon.  We will be out of debt except for our house on May 1st!

We’ve realized that while we’ve made some very wise financial decisions, many of them have been negated by the really stupid ones we’ve made.  We did well on the big stuff like buying a cheaper/smaller house with a 15 year mortgage, buying a car for cash (almost), living on a budget, etc.  But then, because we felt that earned the right because of our wise choices, we nickeled and dimed ourselves to death with a bunch of stupid purchases that seemed really necessary at the time, like: 2 new computer systems, music recording software and equipment, 2 different lawn services, expensive groceries, a grill we used about 4 times, a new TV, a bunch of unnecessary furniture, and I won’t even list all of the ridiculous baby stuff we bought that we never used or just used once or twice before we realized that they were totally pointless.  A common phrase we’ve been saying lately in reference to stuff we see around the house is, “Stupid purchase number --...”  All that money could have been going to pay off our debt, and we really should have been out of debt a long time ago and well on our way to having our house paid off.

So we’ve gotten pretty fired up and intense about it lately and have come up with a lot of new ways to save money.  Maybe you already do a lot of these things, but they’re new for us.  I'm open to more ideas, too!

  • I’ve been saving a ton on groceries by:
    • making a lot of stuff from scratch, including
      • whole wheat flour
      • whole wheat bread (my favorite - there’s nothing better)
      • yogurt
      • bread crumbs (granted I don’t use a ton of them)
      • beans
      • anything for which you could buy a mix (pancakes, cornbread, etc.)
      • not buying much processed
      • using fresh veggies and fruits instead of canned or jarred
      • no more chicken nuggets, chips, or granola bars - sorry kids
        • I do still buy Smucker’s Natural Peanut Butter and Simply Fruit Jelly.
    • potty training Levi (we're getting close, but he's not there yet)
    • shopping at ALDI and not Whole Foods :(
      • I really miss Whole Foods, and I can totally tell the difference between organic and conventional fruits and veggies, but the savings is pretty great.
      • What I can’t get at ALDI I get at Walmart Neighborhood Market.
    • getting our meat when it goes on sale at Tom Thumb and stocking up on it
  • We’ve sold a ton of stuff that we didn’t need anymore.  And trust me, it adds up!  You can get WAY more from selling on Craig’s List than you can at a garage sale.  So far we’ve sold:
    • a bass that needed electrical work with its hard case
    • a thing to record music on the computer
    • a dresser that wasn’t being used
    • a computer desk that we didn’t need anymore because we sold the...
    • computer
    • our GPS that was becoming unnecessary since we have iPhones
    • a changing table that I probably won’t need for the next kid since we change diapers pretty much anywhere 
    • a toddler bed that I may or may not want again for the next one, but I know I can find them cheap on Craig’s List if I do
    • a condenser microphone that Michael may have used once or twice to record on
    • the aforementioned grill
  • We canceled the lawn services.  One was for mowing, edging, etc., and the other was for fertilizing.  Turns out we have arms and legs and can do it ourselves.  Go figure. 
  • We’ve decided not to make any improvements on the house (that cost more than $100) until the house is paid off.  But when it’s paid off we’ll have the cash to do all that we want to do, like getting the floors refinished, retiling the kitchen, painting the outside, getting a sprinkler system, expanding the driveway, etc.  There’s no sense in going into debt over that stuff, though, because none of them are emergencies. 
  • I figured out how to save money on makeup and hair products in order to lower my monthly budget for that.  I mentioned that on Facebook a while back.   

Those are the major things that we’ve changed.  We’ve also done little things here and there, like getting the kids (well, Samuel at least) involved in the budgeting process.  He likes to help us type the numbers into the computer, and we explain what it all means to him.  He knows to stop asking for something when we tell him that it’s not in the budget.  We’ve also lowered the budgeted amounts for some of our categories in our budget, like allowances, clothing, etc.

I think the biggest change, though, is that we got fired up about it.  We couldn’t have done it if both of us weren’t on board and if we both weren't really riled up and bothered by our debt.  We needed to get mad at it enough to actually change our lives.  We have been SOOO happy in our marriage, family, and lives lately, too.  It’s crazy because we’re spending less money than we probably ever have, but we’re the happiest than we have ever been.  I love it.


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