Thursday, June 2, 2016

Destination Debt Free: Month 1

This marks the first month of our family being "gazelle intense" with our debt. We're looking at a pretty big mountain and, quite frankly, it's overwhelming! When we look at Dave's Baby Steps, all I can really focus in on is Baby Step 2 ("Pay off All Debt but the House") - Because we're gonna be there for a very long time! Paying off all debt is just one giant goal, but there are going to be dozens if not hundreds of little goals that will have to happen along the way. 

Since Blake is still in graduate school and we aren't both working true full-time jobs (even though Blake puts in more hours than most full-time employees!), our Baby Steps are going to have to look a little different for now. We are going to first have to really hone in on our budget in order to reduce (or eliminate) future debt. We are looking very closely at ways to make our budget work for us so that we don't need a loan for the upcoming school year. That's a big task, but we're up for it! 

On or around the first of each month, I'll post a snapshot of our "itty bitty Baby Steps" on Instagram so that you are able to see what we are doing, little by little, to take on this debt. And, on the blog, I'll write a little more in detail about those monthly goals and also re-cap the previous month's goals and share how we did.

I'm a really goal-oriented person, can you tell? 

Still not ready to share the big number, but now you know it's somewhere between $10,000 and $99,999! As Dave's Baby Steps recommend, we will be making our minimum payments on all of our current debts until we have completed Baby Step 1

1. List out all debts and post at home
Pretty self-explanatory, right? It sounds like a silly goal, but if you are in debt you know how hard it is to look at those very real numbers. It hurts! But this is necessary to remind ourselves of what we are facing. Seeing those numbers every day is a great way to stay motivated. 

2. Unsubscribe to YNAB, Ipsy & Hulu
These are just three subscriptions we have that aren't really necessary. YNAB is actually a great budgeting tool, but I found a site I like better (see goal 5!) so there's no need to keep paying. All in all, this will save us $25.99 a month. That's not a lot, I know. But every little bit helps! And while Ipsy & Hulu are both great, they just aren't really necessary. And now we have $25.99 more a month to put towards Baby Step 1!

3. Save toward Emergency Fund
This is Baby Step 1! We currently have over half of the $1,000 in our emergency fund. We actually have more than that in savings, but that money is "ear marked" for future expenses. Since Blake's stipend is only ten months out of the year, we have other savings that we use for those months when he doesn't get paid. So, we aren't going to consider that part of our $1,000 emergency fund.

4. Decrease grocery spending
I love buying groceries. Love, love, love! So this is a hard area for me. I'll write a more detailed post about how I'm doing this, but for now... just know that I've cut my grocery budget by $200 and I'm terrified!!!!! 

5. Track budget diligently
We are using Dave Ramsey's to track our budget and his We are using zero-based budgeting plan. We've tried other sites in the past (including YNAB, as mentioned above) but, so far, Every Dollar is working the best for us, especially for zero-based budgeting. We know it will take about three months to get our budget "right," so I know it will be a learning curve, but I'm up for the challenge! By tracking it regularly (as in, daily) we can hopefully better adhere to the limits we've set for ourselves. 

Follow along with us and join in on the journey!!!! We're gonna be DEBT FREE.... one day!!!

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