Into the New Year!

Well 2017 is definitely gone, bringing all the dreams and promises of a new year.  Topping our list of goals this year is  getting out of consumer debt.  We didn’t hit our mark, to completely be out of debt by the new year, but we hope to hit it before my birthday!  We started this year with about 16,000 in student loan debt.  We have been pretty aggressive selling the boat and working a ton of overtime.  As of March 1st, we owe a little over 5,000.

The decision to sell the boat was a tough one!  We really enjoyed our weekends on the lake, and we know that we will want to replace it.  But stretching out Baby Step 2 another 6 months was not worth it to us.  We wanted something faster and bigger anyways, so that will be on the list in the next year or two to purchase.

Getting this close to being out of debt brings up so many fun ideas for the next year.  There are several improvements we need to make to the house, so after saving our 3-6 month emergency fund, we will cash flow those.  It is so unbelievably freeing to be this close to our goal.  I can’t explain the feeling, but I highly recommend it!

How is your debt journey going? I would love to hear from you!  What lessons have you learned along the way?  I know I have learned that sometimes we need to take a step down off the gazelle train and live a little. There were several times we just needed to breathe, to spend quality time together. As long as you budget and don’t increase your debt during those times you need a break,  you’ll be just fine!


Building Your Budget

Are you still with me?  It’s time to talk about baby step 2.  To begin, you’ll want to list your debts smallest to largest.  This includes all debt.  Even if  you owe it to your grandma.

Ok, did you do that?


Now you need to create your budget! Make a column for each payday, and then start listing things you need to pay out of that check.  Make sure you include things like groceries and gas, and spending money. These areas will take the most adjusting at first.  Because a lot of times we don’t realize how much we actually need for these categories.  Now if you have money left after everything is written down, send all that extra money to your smallest debt. This is called a zero-based budget. There are 0 dollars left. You told every dollar what to do.

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Envelopes.  Get some envelopes.  Now drive to the bank (please don’t drive to the bank while reading this). Write on the front of your first envelope, GAS.  Fill the envelope with your allotted gas money for that week. Then on envelope 2, write FOOD.  Fill this envelope with the money you plan to spend on food for this week. The same goes for spending, or anything else you can pay with cash. Dave actually recommends you pay everything this way.

Honestly, you probably should.

We pay all our bills online, and then draw out the rest and fill our envelopes. It does take time to get used to, but it really helps you stick to your budget.  Sometimes it is just too easy to swipe your card when you want to buy something, but when the cash is gone, it’s gone. So overspending isn’t an option. Swiper, noooo swiping!!!

Baby step 2 isn’t over until all the debts on your list are paid in full.  During this time you are making minimum payments to everything on the list, and paying extra to the smallest debt. Once it is paid in full, your debt snowball (the money you are paying towards debt) just grew!  You now have that original amount plus whatever your minimum payment on the first debt was. Now take that and apply it to the next thing on your list.

Dave recommends that this process should be completed within 2 years. If you calculate it out and it doesn’t look possible, it may be time to sell. For example, Dave recommends that all the things you own, that have a motor in them, when combined, should not exceed 50% of your annual income. This is because cars depreciate! Quickly! But cars aren’t the only things you can sell to get your snowball rolling.  Look around the house, what items do you have that you don’t need? Maybe you could have a yard sale!

The other thing that could hold you back is your house payment. Your house payment should be approximately 25% of your take home pay, or less. If your payment is higher, it could hold you back from effectively getting out of debt, or saving in the future.  If that is the case, your options would be to increase your income, or sell the house and get more affordable living accommodations.

This is a hard step, but it is the most important. It isn’t possible to save money, if all of it is going out in payments and interest.  Once the debt is gone, you can get serious about saving, and change your family tree!

Do you have questions? Email me or message me on Facebook! Hit the plus sign in the lower right corner to below to be notified when the next post in this series is published. Happy saving!

How do I start?

Are you considering starting your own debt free journey?

Keep reading!

Since many of you have expressed interest, I thought I would go into more detail on the steps you can take to become debt free. Maybe you have felt the struggle of making payments, and you’ve become really tired. Your tired of bills, tired of not getting ahead, and tired of working for “nothing”.

When you reach this point, that my friend, is when you have to make a decision. Do you want to continue living this way? Will you be happy in 10, 15, or 20 years down the road if nothing changes? If the answer is no, then you’re ready.  The very first step is drawing a line.  Committing yourself whole heartedly to not borrowing money, for anything, ever again.

The concept really sounds crazy at first, but it can be done. Millions of people have followed Dave’s program, and other similar programs and became debt free.  No matter the situation, it isn’t going to get better if you allow yourself to keep using those credit cards. So cut those suckers up, or put them in the freezer, in a bag of water.

If you have gotten this far, great! Now we are ready for the real baby step 1.  In Dave Ramsey’s program he lays out basic baby steps to follow. They are simple, and to the point.

Baby step 1 is saving 1000.00 for your emergency fund. This fund is to be in savings or cash in your house, to be used in true emergencies ( a flat tire, medical emergency, or preventing foreclosure, etc.).  This fund is not to be used when you need new shoes, or you want to go out to eat.

Dave recommends that if you have more savings than 1000.00 (in a checking or savings account) you should use all but 1000.00 to get  your debt paid down, then you will increase your savings again during baby step 3. This does not apply to retirement savings, do not cash out your retirement to pay off debt.

Stay tuned, Monday we will go over baby step 2 in detail.  Hit the follow button so you don’t miss it! If you have questions, please, feel free to get in touch with me via Facebook or the blog! Happy saving!

The Interview

I interviewed a woman on baby step 7, and this is what she had to say…

Tell me your story, how did you get out of debt and how much did you make at that time?

I got myself into significant debt before getting married. ($115,000 … student loan, car, credit cards) …. plus a mortgage on a condo. My salary ranged from $42,000 to about $52,000 while I tackled the credit cards (first) and then went to work on the car/student loans. When I got married, we sold my condo which let me finish paying off the car and made a sizable dent in the student loans. Just as soon as the student loans were paid off, then we could by a home together. (It took me years and years of pretty frugal living to get those credit cards paid off … after minimum payments and living expenses, there just wasn’t a whole lot left over for snowballing. Since I couldn’t get a second job, that meant slashing expenses. I didn’t spend any money on any extras for at least 3-4 years. No cell phone. No computer. No internet. No cable. No eating out.

What is the key to getting out of debt?

For me, the key to getting out of debt was the willingness to be as gazelle intense as possible, for as long as possible. (Short term sacrifice for long-term gain!) I hated that when my car needed a new battery, it was a crisis. When I needed to pay for a plumber, it was a crisis. I hated having to turn down all sorts of social events because they cost money … but I was also pretty desperate to escape the bondage of debt.
Paying off our house let me quit working at a high-stress job that I’d come to dread and gate. My wonderful husband is active duty military (and we’re stationed in fairly high cost of living California), but I no longer need to work for a salary just to help keep bills paid. This has allowed me to volunteer full-time for a local non-profit doing what I love without worrying about how we will pay the power bill or afford a car repair.

What has reaching baby step 7 afforded you to do, that you couldn’t have done otherwise?

We drive 2 cars we paid cash for … mine is 11 years old and my wonderful DH’s is 15 years old. We still follow a budget, and we’re socking away money for retirement as well as sinking funds for home/car repairs and the vet. We’re cash-flowing updates for our home. And we donate enough to charity that it makes itemizing our taxes worthwhile even without the mortgage interest deduction.

I absolutely love her story. She didn’t have a lot starting out, but through hard work and dedication, she made it to the other side.  To an amazing place without financial worries.  I absolutely can not wait to get there!

Bah humbug…

Tax season is upon us.  Dave Ramsey teaches that you should adjust your withholding so that you break even at the end of the year.  He says this, because otherwise you are giving the government an interest free loan. So we adjusted.  We broke close to even this year.  Ending up with a small refund.  I know this is beneficial because we are getting more in our checks per month, but I can’t help but feel disappointed after years of getting more.

It’s also a little painful because I know if we had been more on task last year, we could have paid a lot more off, with all that extra.  But this is a new year, and we can’t change the past, we can only learn from it.  So we  will be trucking along, on schedule to pay off this van by May.

Everyone is going to have weeks where they are less than inspired.  When these hit my house, I choose to try to let them pass with minimal decision-making.  Otherwise we may end up making emotional decisions that could drastically change our desired outcomes.  Just keep swimming, just keep swimming.  Because that island your swimming to, its desolate, there aren’t many people who have reached it, and its going to be a nice long vacation.

5 Easy Ways to Stay Motivated This Month

When you have committed to kicking debt out of your household, it’s almost inevitable that eventually you’ll be tempted to quit.  Don’t give up!  Listed below are some ways I stay encouraged..

Listen to Dave’s podcast

When I am feeling alone on the debt free train, there is no better place to turn.  It feels like coming home.  I love the way Dave gives advice, direct and to the point.  I am always learning new things and reinforcing that which I already know.  Also, he has what is known as “millionaire hour”, and sometimes it is REALLY inspirational.  I have listened to several people call in that have normal jobs, like teaching, or accounting.  People who make average pay, who have achieved “millionaire” status.

Read success stories

You can find success stories almost anywhere.  You can start on his website (, or just search the internet.  People are really doing this, everyday.  This is a movement, and trust me it’s one your want to join.

Read finance blogs

I didn’t grow up with a strong background in finance, I learned more of what not to do then what to do.  We didn’t have a class that taught us the dangers of debt, how to write a check, or how to do my own taxes. I definitely didn’t know squat about investing!  I am constantly learning new things and finding inspiration in other people’s financial blogs.  There are tons of options out there, here are a few you can try:

Watch budgeting vlogs

If you aren’t excited about all this reading, head on over to you tube and search Dave Ramsey.  There are plenty of vlogs featuring people who have followed this plan and been successful, I am telling you people, it’s a movement.

Plan your future

What does being debt free mean to you?  What will you be able to do then, that you aren’t able to do now? For me there are several things.  We would love to sell our house and buy a farm, paying at least half in cash. Then we want to save for our future and travel.  We will always live on a budget but our spending category will increase.  But more than all those things, we want to give. We want to be in the position to do what we feel God is calling us to do.  Help others without restraints.  There have been so many times that we have wanted to do more, and just haven’t had the resources.  Being debt free will afford us to follow where he leads.  And that is not just financial freedom, it’s just freedom.


Dear January. How did we do??

Since we have been budgeting a few years now, we have made many changes. But the biggest change this year is setting a monthly goal.  We had goals in the past but they were very generic.  For example, “Let’s try to put x amount per month towards debt!” Well like they say …

” A goal without a plan, is a wish.”-   Antoine de Saint-Exupéry

These vague goals always get thrown aside. Each month something would come up.  We would have an unexpected medical bill, or one of our kids would grow and need new clothes(Stinkin’ kids…). This year, to really keep us on track, I wrote out specific goals tailored to each month.  These goals would factor in activities, birthdays, and any extras that typically pop up that time of year.  I did set the bar high, to push us to pay off this debt as fast as possible.

January’s goal was 1000.00.  It was lower than usual, but I knew we needed to partially replenish the emergency fund, so we could start out the year with that in place.  If you aren’t familiar with Dave Ramsey’s program, the emergency fund is step one.  You save 1000.00 and keep it for true emergencies. This is to try to prevent you from slipping up and using the old credit card!  It has worked for us! We haven’t used a credit card in 2 years(Hallelujah!!)!

We did have things come up-as usual.  But all in all it was a good month. We ended up paying 1150.00 towards our debt! Praise Jesus!

I hope that in sharing our goals, we will inspire others to reach theirs.  We didn’t start out having much to put towards debt at all.  It took paying off some things to really see our debt snowball gain its momentum.  Have you started your budget? Are you working on your emergency fund?  What are your goals for February? Can’t wait to hear from you!