Friday, November 4, 2011

Getting out of Debt

In honor of Dave Ramsey's Debt Free Friday, I thought I would talk about our debt.

As of today, we are $39k in debt. Two unplanned cesarean births, other medical expenses and "stupid tax" has led us to this place. Hubby and I started this journey together in April of 2010. Together since starting we have paid off OVER $26k in debts!

Well we must have an income greater than that? Yep, I think last year we made almost $35k. "Well thats impossible!" Not really. We settled accounts, sold a car (or two), worked (you know, that thing you do that makes you get up every morning and then they give you money?). We gave up things. Its not been an easy road to travel, but its been worth every step.

Just this last week we paid off my credit cards (the hubby has never had any). We have our starter emergency fund ($1k) and are working our debt snowball. I use envelopes for things. Actually we used to just take Jesse's tip money and spend it as needed. But now we are taking it and any other cash we end up with and splitting it between 8 envelopes.
  1. Food
  2. Extra Gas Money
  3. Giving
  4. Misc
  5. Clothes
  6. Repairs
  7. Gloves
  8. Christmas/Gifts
Let me explain a few of these. Number 1. Food. I try and grocery shop once a month to once every two months on $100. Every other month for sure we buy meat, so an extra $60. The food envelope is for that quick trip to the store, or for meals out. Number 2. Extra Gas Money. On payday, I take out $160 in gas for our two cars, $80 each. Well Jesse usually ends up needing 1-2 extra tanks of gas each 2 week period. So we put tip money into this one. The envelope also lets us know if we can afford to take a drive somewhere, just for fun.  Number 7. Gloves. Its an odd envelope, but Jesse buys gloves about once a week at work. At just under $5 a box, this adds up fast. He does it so his hands aren't all greasy and nasty when he comes home.

My envelopes

This is working for us. We have more money now, than when we were both working two jobs and didn't have kids! I will periodically keep you up to date on how this is all going for us. We start teaching a new Financial Peace University class in January.

Day 4 Thankfulness Challenge
Today I am thankful for my hardworking hubby
Without him, the things I am able to do would not be possible

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