Budgets, budgets, budgets!
I've been taking Dave Ramsey's Finical Peace University class offered through my school district for some time now. We started in January of this year and it seems perfect timing, if you ask me. Our credit seems like it was at its highest in January. I can't say that it was because of the holidays-- this year, I budgeted and used ONLY cash. This was a first for me and I loved it! I was able to bargin shop much more than I thought and I always remembered that "once the cash is gone-- it's gone!" Interstingly enough, we had $70 left over... I took $50 and gave Whit $20. :) (That seemed only right, since I did all the shopping, wrapping and idea processing ALONE!)
So, dirty laundry? I dare share...
Here are snapshots of our debt (as best to my record keeping...)
January 2010
Credit 1-- $871.23
Credit 2-- $1430.12
Credit 3-- $1828.31
Credit 4-- $729.96
Student Loan-- $11,659.29
Credit 5-- 0
Department Credit-- $2600.00
Toyota Car-- $4086.19
(Van Loan)-- non-existent
TOTAL DEBT: $23,205.10
July 2010
Credit 1-- $2790.96
Credit 2-- $1309.61
Credit 3-- $1623.40
Credit 4-- 0
Student Loan-- $10, 854.23
Credit 5-- 0
Department Credit-- $1842.00
Toyota Car-- $2,687.54
(Van Loan)-- non-existent
TOTAL DEBT: $21,107.74
January 2011 (start of Dave Ramsey's program)
Credit 1-- $2980.49
Credit 2-- $2187.28
Credit 3-- $1757.75
Credit 4-- 0
Student Loan-- $10,111.36
Credit 5-- $144.09
Department Credit-- $1218.00
Toyota Car-- $960.86
(Van Loan)-- $5300.00
TOTAL DEBT: $24,659.83
April 2011 (shortly after learning about Debt Snowball and Budgeting our brains out...)
Credit 1-- $2802.97
Credit 2-- $3153.96
Credit 3-- 0
Credit 4-- 0
Student Loan-- $9,749.73
Credit 5-- 0
Department Credit-- 0
Toyota Car-- 0
(Van Loan)-- $5100.00
TOTAL DEBT: $20,806.66
Oh my goodness! Would you take a look at that!? In just four months (really just three), we were able to dwindle away $4,000 in debt?! How in the world? I'll tell you how....
First of all, I sat down with Whit (unwillingly), and we made ourselves a budget. There was some discussions made and blood boiling... the smartest choice I ever made that night was to make sure McCoy was asleep before we began! Not only did I have Whit's attention, but we both couldn't raise our voices too loudly... Great move, Tenessa!
We made a budget-- I had NO idea where the money was going. I was paying a fair amount more on my minimum balances. $100 here and $100 here. I wrote down everything (something I've had in place for a while now), but I was merely watching my money after it left the house. I never understood or followed through with an actual budget. So, we guessed, a lot on the things that we needed to spend money on. The hardest areas for me were clothing (I just shop when I feel like it, not when I need clothes...) and food was another hard one for me. I had no idea what I was spending on food each week. I didn't go shopping every week, more like every 6 weeks or worse, everyday.... yeah, it was hard to budget. So I looked online, to my fellow bloggers, and guessed $100 per week. WAY TOO MUCH-- which we found out after a couple of weeks. So, we went to $100 every two weeks. That's more like it.
The other thing I did was the TRUE debt snowball. I went to minimum payments for all the credit cards and focused on the lowest amount. Then applied the rules of "Snowballing" to the other credit cards.
I know that my debt snowball will lose momentum next month. We were very lucky this last couple of months for several reasons. Whit got an unexpected bonus check from work, which we applied immediately to pay off the car loan. We also ran into some settlement money from our insurance company, which we applied to our lowest credit card statement. Then we decided to refinance our house (in such, saving $373 a month!!). In doing that, we were able to save our April's mortgage payment and apply all that money to one of the credit cards. So in the last month, we were able to pay off about $4,000 in debt! And it felt great. It's just too bad that it won't be continuing to snowball like that for awhile.
Nonetheless, this helps out soooo much. Not only were we able to get our debt down, it gave us some insight on how we can budget and actually see the program work for itself.
I also put my "extra" spending money in an ING Direct account (for Christmas, Lasik eye surgery, and HOA dues that are due in July). This was we have budgeted for it and it won't surprise us when the bill is due. And Lasik... well that's my wishful thinking!!
And just so you know, I care about our budget and finances for these reasons:
1. I feel like I've lost control of my money-- I want to regain my control and power over money.
2. I hate the feeling that I'm spending unnecessary money and then freak out when I don't know where it went.
3. I want all the money we earn to pay for the bare esstentials... food, clothing, transportation, shelter. And then I want to spend the rest of it on fun stuff!
4. I love the idea of saving up for stuff. I did that with my new cell phone and I swear I already treat it better!
5. I'm merely entertained with keeping a budget and plugging in numbers.
Credit 1-- $2,802.97
