If you read my last post, you know that this year is all about simplifying for our family and one of the biggest ways we’re working towards that is through our finances. We are by no means starving, but it tends to be tighter than we like between paydays and we’re tired of living paycheck to paycheck. It’s exhausting and takes a toll on our marriage more often than not, so we’re determined to get a hold on our spending. This is how we’re doing just that:
- Organize Your Expenses
We’ve been doing this for a while now, but only recently have I perfected our method of budgeting. In the past, I used a spiral notebook and budgeted month to month. Phillip, my husband, couldn’t understand my logic in the way that it was organized, so I bought a pricey planner online that included a budgeting section to make it a bit easier to understand. The issue with that (aside from it’s $50+ price tag) was that it was my personal planner, so unless I was home, he still didn’t have access to it. Since I’m trying to do my best to save money and my free trial of Microsoft Office ran out on my new laptop, I had an aha moment that I wish would’ve happened sooner. Rather than spending money on unnecessary Microsoft software, I realized I could just use Google Docs for FREE and either of us could access it/change it from anywhere, anytime. Brilliant, right? I have a column for all of our monthly expenses, I added a note to each cell with our login info for each account, and then each month gets it’s own column for me to track which bills have been paid/still need to be paid.
- Dave Ramsey Method
Despite being loaned his Financial Peace book years ago, I didn’t learn about Dave’s methods until I got good and mad about our financial situation. Interestingly enough, this is something he explains is necessary to really have the motivation to get out of debt. We’ve compiled our debts into a spread sheet so we can track it and use as reference for our debt snowball and we’re working on getting our budget more organized so that there aren’t any surprises coming up. So far, we’re both on the same page with getting out of debt and that has NEVER happened in our nearly 5 years of marriage, so kudos, Dave, for doing in one week what we’ve been trying to do for half a decade. There is quite a bit more to his method, so I encourage you to look for one of his books at your local library. It’s a quick read and so worth the time!
- Graph Your Debt
In case you’ve not noticed, I like my spreadsheets. I’m very Type A and I like to have things organized neatly in front of me, so I thought I’d put this to use to give us a visual aid to show our progress in paying off debt. You can also do this through Google Docs (which operate exactly the same as Microsoft Word, Excel, Power Point, etc.). I have two tabs on our spreadsheet currently: 2018 budget & our debt. I printed off a bar graph with no fill on the bars so that I could go in with a highlighter each week and fill in our payment to show where we stood on paying off those debts. I’m pleased to say that we’ve filled in 2 entirely and are incredibly close to filling in another! Just in the last month and a half, we’ve paid $1689 towards a total of $20K in debt using the debt snowball method. If we continue at this rate, we should be able to pay off everything but the house within the next year AND WE ARE THRILLED!
I know I told you to read Dave’s book, but let me sum it up for you: you make a list of your debts in ascending order and pay them off smallest to largest (amount, don’t pay attention to the interest rate) by putting all extra funds towards the smallest bill and pay only minimum payments on all others. Once that one is paid, you pretend you still have that bill and put the same amount of money towards the next debt on your list, so on & so forth. Because we were fairly strapped with all the minimum payments, we’ve not been able to attack it with much force, but our income tax refund will be paying off a few others and I’m working on making extra money through my….
- Side Hustle
I’ve decided to buckle down more with my side ‘business’ this year to help come up with extra income to pay towards debt. I don’t have the time to create a full on second income with my embroidery (and now Cricut crafts!) but I can definitely make an extra $100 or so every month, which would help put a significant dent in some of our medical bills. Get creative! Dave suggests getting a second job, but we can’t make that work for us because of opposite full time work schedules and limited babysitting options because of my unique work arrangement. Instead, we’re already compiling stuff for a yard sale come spring (which also knocks out my de-cluttering goal for 2018!) to make a little extra.
- Cut Out the Extras
Lastly, we cut out most of our unnecessary expenses. We started by cancelling all streaming tv services except for Netflix and Prime (because we’d already paid for a year). This meant no more Hulu, no more HBO, and an additional $30 to put towards debt. We cancelled our membership at the local gym because we were paying $50 a month for something that rarely got used (I started out strong last summer by attending a twice weekly spinning class, but I lost momentum when I had no one to go with me and I started working full time again). There really wasn’t a ton of fat to trim, but we’re running this household extra lean these days because we’re sick of the added stress debt causes.
I’ve never been so excited about spending as little as possible, y’all!