Once we had a plan in place, I immediately told my financial planner what our goals were. Not necessarily because he needed or wanted to know but because it made it official in my mind and gave us an unbiased person to help keep us accountable. I knew there would be lots of temptations along the way and I do much better at reaching my goals if I know there is someone to answer to (other than myself). We set dates for when we would complete each of the baby steps and got to work.
I am a spreadsheet junky so I set out to make a written budget. Every time we get a paycheck, I allocate every penny of it to the predetermined categories. Once I have put the budgeted amount in each category, any extra money goes into paying off our debts. I put our budget on Google Docs so that my husband and I could access it from anywhere that has internet (click here for a template complete with formulas – you’ll have to download it in order to be able to edit it). Anytime I make a payment or buy something, I record that in the spreadsheet so that I will know exactly how much money is left in that category for the month. For many people this would be way too much work but I actually look forward to sitting down and seeing where all of our money is and where it is going. I get the same enjoyment out of this as I did in spending money previously.
Where did all of this money come from? Its amazing where you can find money when you know what you are spending! I consider saving money kind of like a weight loss plan. Everyone knows you should do it but sticking to it is the real test. Any good weight loss plan allows for snacks – it keeps your metabolism going and just generally makes you feel better. The same is true with saving. While the ultimate goal is to pay off debts and not accumulate more debt in the process, we have to allow ourselves to spend some money. Otherwise we would quit before we ever reached our goal. My husband’s reservation in starting this process was that he wouldn’t be allowed to buy the things he wanted (music, work out supplements, video games, coffee, etc…) and that I would be nagging him about the things he was buying. The way we avoid this is to have “fun money.” Each month we budget a set amount of money as “fun money.” This is money that we both get in cash every month that we can spend any way we choose and the other person can’t say anything about it. This has really curbed our spending because now we both really think twice before spending our fun money – we know exactly how much we have and we don’t want to waste it! It has also helped us to avoid silly arguments. If he wants to buy a video game with his money – go for it! If I want to go get a pedicure – no problem! It also makes us both feel better about saving our money because we are still allowed to buy things that we want in the process.
We both really love traveling so this was an area that we weren’t willing to give up. Therefore, we have put it in our budget as a bill – each month we set aside a certain amount of money to use for travel. We really want to celebrate our anniversary each year with a trip instead of with gifts. Some years will be small trips and some years will be more extravagant trips but we will continue traveling even while we are paying off debts. Next weekend will be our first anniversary trip (although it is not quite our first anniversary yet – it was difficult to work around school and work schedules.)
In order to help meet all our financial goals we have both taken on extra jobs to bring in more income. I am tutoring at least once a week. During the school year, I took a position helping kids with homework after school. I have also signed up to teach 3 weeks worth of summer camps in addition to teaching professional development classes through the school district on technology. The professional development classes are way out of my comfort zone – teaching adults! Yikes! We’ll see how it goes – hopefully it will not be too scary. =) My husband sacrifices the most. He not only works a full-time job as a police officer, but also is taking a full load of college courses each semester, and works as much overtime as he can. I really admire his dedication and work ethic. I know it is not easy on him and it is definitely not easy on me . There are weeks where I hardly see him. There have also been months when he has worked for 3-4 weeks without a day off. I miss him when he is gone so much but I know that it will be worth it in the end.
We are already on a faster pace to get out of debt than originally planned. This weekend we sent in the final payment for my car! It felt so good to know that we are done with 2/3 of our debt snowball list! We only have one more debt to pay off – our truck! If we continue at this pace, we will get it paid off by the end of the year! At that point we will have paid off $21,000 of debt in about 10 months! It’s pretty amazing what you can accomplish with a plan and a little will power!
The hardest part so far has been saying no to some very tempting vacations. Since we started this process in March, we have been faced with a cruise to Cozumel, a trip to Thailand, Laos, and Cambodia, a trip to Costa Rica, and a trip to Las Vegas. We would have LOVED to go on any one of those trips but it wasn’t in the budget just yet. We agreed on doing a smaller trip this year and will hopefully get to do a bigger trip next summer.