Money

So a couple weeks ago I read Dave Ramsey's Total Money Makeover, and it was such a good book. Some of the things I had heard elsewhere, but the way he puts everything, and the step by step process makes me think that this could actually work for me. So we committed to follow his plan. Although right away there was a slight problem, you see we had already saved and budgeted for Disneyland, and there was no way we werent going to go- it being a family reunion and all, so we decided that we would still go, and as soon as we got back we would start implementing his plan. So we cut up all our credit cards- YIKES!!! Let me tell you that was hard for me! But it is a little ridiculous that we have paid off all of our credit cards 3 times. I am determined that we will never have to pay off a credit card again, because we wont have a balance on one. When we were first married, we were very good about only buying things we could pay cash for and it never even occured to us to get a card, but after we had the boys things were hard- You see, we were on birth control, so we werent even planning on getting pregnant, once we found out that I was, we figured that I would still work since I was a nanny, it would be fine to bring the baby, but then we found out it was twins and that changed everything. Jeremy was going to school full time and working 20 hours a week maximum at that time. I got put on bedrest 2 months early (as a precaution- not because I really needed to be) which meant I had to stop working. So since I was making more than him at the time this definately put a strain on us. He was bringing home about $900 a month and our rent was $600. Ouch! We went on housing assistance which helped us not have to move, but I think we still were paying like 400 month. Then we also had a $5000 maternity deductible for our insurance that we had to meet, which we couldn't, so we went on Medicaid. Well since we had insurance, medical bills kept going back and forth between the two, and things started to go to collections, so we opened a card and put it on there to stop it. Once we realized how easy it was to get stuff we needed- (and yes we did need diapers and food) by putting it on a credit card and being able to pay for it slowly- in payments we could afford, we kinda got hooked. Then once Jeremy got hired on at Novell and he was suddenly making all this money, instead of going back to paying cash for everything, we started to put stuff we didnt need on our cards- going out to dinner every night, fun toys, etc. We never had a problem paying way more than the monthly payment on the card, but we avoided it so we would have more money to spend.

Anyways, we decided that we are going to break the cycle. So we totaled up all of our debt- not counting our house, and have like 18000 to pay off. Wow that seems like a big number. But I guess when you factor in the fact that it includes our van, it doesnt seem as bad. Oh and we arent counting student loans either, since we pay less than 1% on those, we could put our money in any savings account and make more than that. So we have a check that we get once a month that is earmarked entirely for debt. This months payments are going to the $1000 for the emergency fund. Then for the debt snowball, we are paying off one of our cards, and making minimum payment on the other debts. We also have to get our garden in starting this month, so that we can save money this summer by not having to pay a premium for fresh produce (which we eat tons of). So a little detracted from paying off the debts now so we can pay on them more in a couple months. oh and back to being better at coupon shopping for me. Which up until now has really just been a hobby ( I love seeing how much I can save) I am going to actually have a budget for food, so that we can put even more to paying stuff off. If we are really good we can have everything paid off, a full emergency fund, pay more to our 401K, and pay off our house in less than 5 years. Although once we pay everything off and fill our emergency fund, we may want to pay cash for some fun things too, which will probably put off paying the house off as fast, but we will still make way more than the monthly payment. I will try to keep this up to date, and see how fast we can pay things off!