{Update} On Budgeting

It’s been a while since I’ve talked about our journey to becoming debt free and I’ve been thinking about what might be different, what I haven’t covered, what to tell you guys lately.

The beginning of the year I did a video and talked about how optimistic I was – that Aaron had taken over the budget and things were finally starting to feel possible. How excited I was for the cash envelopes and all that jazz.

A few weeks later I updated with how those envelopes were doing. A few were surprisingly pregnant. There had been some hanky panky. Naughty.

Now it’s almost April and I haven’t made a new video yet (about anything … {hangs head}). Where are things?

Some days it’s really confusing – because you think you have this untouchable idea, this rock solid plan to carry you through and then, oooops, you buy tickets for a plane ride.

Being busy and losing the communication it takes to keep our budget up to date is our worst enemy. We’re still on track to have our car paid off before summer and we just paid off a few small medical debts (large deductions for daughters tonsillectomy, left over debt from Aaron’s back situation, dentist bills).

We have a few things up in the air right now as well, which makes planning for anything a little difficult – so we’re doing the best we can.

I was reading through some of the Dave Ramsey calls (I have the iphone app, of course I do) and was struck by one of them that listed what they had “Bank rolled” while paying off debt … vacations, home upgrades, cars …

Which got me thinking … I’ve been tallying this number in my head for the day we call that show and scream we’re debt free!! (and yes, that will happen) and there are times when I think; Seriously? In all this time that’s it? Why does it feel like we work so hard then?

Here’s our rough to-date of what we’ve paid off in the last 2 1/2 years:

…….. $47,500 American Dollars ……..

In that total we have: The birth of our son, the loss we took when we sold our home, the above listed medical costs, and what we’ve paid off on the car loan so far. (I guess technically I could add the total cost of the mortgage in there but that hurts my head.)

That’s a big number when I see it like that. In order to accomplish that we built and sold another home, have no credit cards, became a one car family (sold a car for the cash) and are crazy serious about paying off our debt otherwise. Meaning when we make extra money or are given money as a gift or find extra money in our budget – it goes towards paying something off. We also no longer have a mortgage.

While paying off the debt we bank rolled:

# Five (or more) Vacations
# Numerous upgrades to our previous home
# The purchase of 2 used cars

This is not to brag but to let you guys know how possible this is when you have a plan. Our income changed only slightly for cost of living (actually just to cover the increase in our monthly health insurance deductible) and we’re not rich by any means. But we are focused.

I sold over $5,000 worth of STUFF on craigslist. For a while I was taking photos regularly for families and made extra money that way.

I’ve traded skills many times in order to get something that we need. So has Aaron.

We’re out of the box thinkers, and it’s not difficult. There are opportunities and ideas everywhere you look – but are you looking?

That’s what’s new for us: not much actually. Just keepin on keeping on.

How do you guys stay focused? What have you done that has helped your budget lately?

Like this kind of conversation? Me too. For more check out my series on becoming debt free.

{Disclaimer time! While this works for us we are not geniuses with money, we still run into issues with mismanagement no matter how hard we try – this has been a learning curve for us as well. So just because this is how we’ve decided to delegate and spend our money doesn’t mean you should too. Do I think being debt free is important? Um, yes. But that’s just us.}

2 thoughts on “{Update} On Budgeting

  1. While I haven’t paid interest on a CC account for years, I do use them regularly. I take advantage of their periodic specials that let you pay things off with zero percent for various periods of time, or just pay it off each month. this takes some restraint, and maybe a cushion in the bank, but doable.

    For major purchases, I wait for a zero percent offer. Home Depot supplied my cabinets and lots of other things for my remodel, and gave me a year to pay for it. My trip to Alaska, Discover gave me a year, no interest. Bought new windows and doors last year…12-months no interest. New washer/dryer from Best Buy, 24-months, no interest. I just got another one – no interest on purchases until next Feb…bought a new Nikon D7000 body, and paid for my upcoming trip to Germany to pick up a new car (which I’ve been saving for and am paying cash). So, I’ll have until next Feb to pay that off as if it was cash. The big, really big, thing on those is never be late, and pay it off before the (often deferred) interest starts becoming due, otherwise, the rates are truly horrible.

    I could just pay for these things, but why if they’ll loan it to me for no interest? I can keep that money in investments and make money rather than paying them off early. I don’t really consider this debt, since I can pay them all off, and there isn’t any interest. Where it gets to be nasty is if you are living paycheck to paycheck and your debt is increasing with no chance of ever getting out of it.

    And, now that I’m retired, I don’t have to worry about losing my job, as I’ve got a steady income, regardless (maybe one of the few that still had a ‘real’ pension), that will pay off those bills I do have before the interest would start. This gives me a lot more flexibility. I’ve been lucky and financially prudent, as I’ve got a big pile (at least to me!) sitting in a 401K that I funded at the max allowed for years. Running the numbers, I won’t need any of it even after I’ll be required to start taking money out…it’s there as a bonus cushion.

    I would focus on paying off any debts that have high interest rates, avoiding new ones, and trying to maximize any tax deferred savings plans you may have access to. The sooner you start, even with a little bit, the longer it can grow. Even $100/month started early, would have you be a millionaire in your 50’s. Now, no way to tell if that will be chump change by then, but hey, it’s got to be better than not having anything!

  2. Thanks Jim! Quite the information loaded comment – love it! Yup, we’re saving for “one day” too. And I think it’s great that you’ve figured out a way to make the deals and zero % financing work in your favor – I’m just not prepared to play the game.

    Can’t wait to hear about your trip to Germany for that car!

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