January 2011--We had a goal to do something better with our money that year. (Before then it seemed that we would save up, then have an emergency and spend every penny--this was a vicious cycle.) We wanted to be more prepared for the future--for future emergencies and for retirement, college for the kids, mission funds, and fun stuff too.
February 2011--We read Dave Ramsey's Total Money Makeover (thanks to Dad and Mom). We got super pumped up about budgeting and preparing for the future. The whole point is to get out of debt, save for a rainy day, then save like crazy for retirement. "Live like no one else so later you can live like no one else." The reason we got so hooked on that book is because it's principles are the same that are taught by The Church of Jesus Christ of Latter-day Saints and the same principles that our grandparents lived by. AVOID DEBT(or get out of it), SAVE FOR A RAINY DAY, BE PREPARED FOR THE FUTURE.
March 2011--We cancelled our credit cards. (Since we don't want any debt, why would we want a credit card to tempt the fates?) We started living a strict budget. We prepared a spreadsheet that helped us plan all of our monthly bills along with other things that needed to be saved up for like car repairs, Christmas, school supplies, soccer lessons, etc. Once a month I would go to the bank and get out CASH for our monthly expenses and the other things that we'd save for. (I always feel like the bank tellers cringe when I walk in with my list of how I want the cash divied up). I put it in a small file with an envelope for each category. When the cash for groceries is gone, no more trips to the grocery store. No borrowing money from the birthday fund or oil change fund. Then every extra dollar gets put against debt. In March our debt consisted of a hospital bill, car loan, and student loans.
Progress--It is 14 months later and we have paid off the hospital bill, car loan, and are getting rid of student loans in September (cross your fingers)!
Next--After our student loans are paid off, we will save up a big EMERGENCY FUND that will cover at least 6 months of basic expenses. That will feel so good!
Proof--I keep a list of the "emergencies" we have paid for during this money makeover period--we were able to pay for these things with CASH and still work on getting out of debt. This is not to boast, but just to show that it is possible. It makes me feel good for what we've accomplished.
- New wheels and tires for the Odyssey $1600
- Tubes for Kate's ears $600
- Garage door repair $185
- New clothes dryer $360
- New dishwasher $350
- Bed and mattress for kids' room $250
- New mattress for Spencer and I $1300
- Laptop repair $180
- Lawn mower $380
- New clothes washer $550
- Having mad money/blow money--this keeps us sane. We can live tight on everything else, but Spencer and I each get a small amount of money that is no questions asked. Spencer saves his up, but I usually spend it on a good deal at the grocery store or on redoing something at home. It is so fun to have some money budgeted for us to use however we want!
- I hope we are teaching our kids good things about money! Spencer drills them:
- (Spencer) Are you ever going to get a credit card?
- (kids) NO!
- (Spencer) Are you ever going to get a loan for a car?
- (kids) NO!
- (Spencer) Do we borrow money?
- (kids) NO!
- Security! We are preparing for the future. We want to be able to retire with dignity, travel, and be able to do good things for other people. How good would it feel to be able to be ready to help out our parents or loved ones or friends.
