Our Plan

 I’ve got all my Financial Documents together and am now ready to get our plan underway.

1. Take all of our savings and investment account (excluding 401k) down to a $1000 cash emergency fund and a $1000 extra emergency fund.  I put my extra emergency into an Emigrant Direct savings account.  The savings account can easily be moved to the bank account for use.  The cash fund will be used for immediate emergencies and built back up quickly when used.  These will be used to fight Murphy and to pay off property tax at the end of the year.

2. With $2000 set aside the rest is put towards debt, starting smallest to largest from the debt snowball.  This helped us pay off Lowes, Chase, Furniture and Student Loan #1.

3. If we didn’t already have a few 0% credit cards then at this step I would have begun looking for some to transfer current cards to.  You want cards that have no transfer fee if possible.

4. Use our Spending Plan to spend every dollar on paper for the next month before actually spending it.  Some of the expenses we’re trying to plan for are Christmas, school supplies and drum lessons.  Make sure that each debt has the minimum payment applied.

This is exciting to finally feel in control and have a plan of attack to eliminate our debt.  I can’t wait to be in complete control of our money, have it work for us instead of us working for it.

Getting out of debt confession

 

I realized that I hadn’t been completely honest about why my wife and I are trying to get out of debt.  Yes, we did get on the same page and that has helped a LOT but there is more to it.

For a couple years I would say she has been bringing up going to Disney World with the kids.  After I read a couple books and we started talking about them I asked if she still wanted to do this.  Of course her response was, YES!  Well I think I finally found a way her getting what she wants, Disney Land, and me getting what I want, debt free, could work together.

I said we could go there but it couldn’t be put on any cards and had to be paid for.  She agreed with this, even though initial response was we have to live our life and you never know what tomorrow can bring.  While I agree with that I just couldn’t handle our finances anymore.  This compromise seems to be good for both of us, even though we stumble along the way.

Sometimes finding a motivation idea for each other can really help move things along.

Communication

This is where Dave Ramsey helped me the most.  My wife and I had tried to get out of debt a couple times but the communication just wasn’t there, we talked different languages.

I started calling a budget a spending plan.  Took her hands in mine and told her my feelings about how stressed I was and felt so overwhelmed.  Those two very simple things really turned things around for us.  Sure it was more than that but her having the same feelings and not wanting to be like this forever changed our life.  Only a few short months later I feel like we’re more connected than we’ve ever been and while we aren’t always on the same page there is the willingness to listen and understand that wasn’t there as much before.

The actual spending plan started in June but the talking started in May.  Most of the month of May was just spent getting on the same page and understanding where each of us wanted to be.  I’m the natural nerd between the two of us so I spent the time getting documents and numbers together, she is the free spirit.

Wanting to be out of debt is a changing of behaviour and it took us time to want this.  We’re still in the process of changing and have set backs but overall this is something we both want and can only be accomplished by the two of us working together.

The Journey Begins

My wife and I tried a budget several times but it never worked for one reason or another.  Shortly after I got a new boss he started talking about finances and investing, mentioning Dave Ramsey several times.  Finally around March I decided to read the Total Money Makeover,  which I got from the library.  Also got the Financial Peace University CDs from the library.  If I’m trying to get out of debt I couldn’t justify buying these tools, though sometimes to make things better in the end spending some up front money isn’t always a bad thing.

 I’ll be the first to tell you that I don’t agree with everything Dave Ramsey teaches, we’ll get into that as we go.

There were a few steps that I did next, in no certain order.  I also did this as I was reading the book and listening to the CD’s.

– I started looking around for different sheets that I could use for a budget.  First created my own and then looked on the web to find some others were using.  Then began to play around with them.

– Got some basic utility costs together from the past year or so.  Mortgage, electricity, water, waste, trash, cable, phone, cell phone, car payments, car insurance and whatever was easily accessible.

– Talk to the wife about a spending plan, our future and just our finances in general.  I had to adjust my thought patterns from what made sense to me and make sure that I listened to what she was saying.  This is the toughest part to get on the same page and because of this requires patience from both people.

 I don’t work on Wednesday afternoon through Sunday so my posting won’t be as good during my off days, however trying to post each day is what I’m striving to accomplish.  Next step is about how my wife and I got on the same page.