As I hinted on Facebook the past two weeks have been so busy for us that we didn’t have time to post the Shaw’s or Market Basket coupon match-ups. Normally I would mention this at the time it was happening but things have been chaotic. After I came down with a cold which caused me to not do anything for a while we had an exciting and stressful goal we had to reach. But let me back up a bit.
Four weeks ago we started to take classes through Financial Peace University, a program designed and created by Dave Ramsey. These classes are to help individuals break the “normal” and become financially responsible and get out of debt. We have always thought we understood how to save money…put money away each month for emergencies but always used credit to get things we wanted or needed. The classes through Financial Peace University are showing us that we didn’t understand money at all. So as we go through this journey (we are only half way through) we had to make some tough decisions on how to tackle our debt. Since our debt is a combination of student loans (my undergraduate, his master’s), car and camper payments and of course the evil credit cards we needed to examine where we could make the quickest change in order to start getting rid of our debt. As Dave Ramsey says we may mosey into debt but we need to be a gazelle getting out of debt.
CUT LUXURIES (and the Cards)!
The first step for us was looking at our expenses each month and deciding what we could do without. After evaluating that we still had 4 more months on our cellphone contract we knew we couldn’t get rid of that yet (without fees) so we looked at cable. We needed high-speed internet for my job and of course the blog so that was staying but did we need cable? When we broke down what we actually watched and enjoyed it was only the local channels and USA. Since I’m an Amazon Prime member I knew we could get movies and some shows from Amazon and the three USA shows we watched were available for purchase. So after calculating the cost of paying for these shows it was still cheaper to cut the cord and pay as we go. Therefore a few weeks ago we cut out cable completely and downgraded our phone service to local calls only (since we have a cell). This meant we were saving $70 a month or $840 a year! We could get rid of the phone completely saving another $15 a month however, the phone number has been in our family since my great-grandparents got a phone…so until we can get out of our contract with our cellphone provider we needed to keep the house phone.
In addition to cutting cable we have also cut our credit cards up and except for our debit cards we are using an all cash system. This will help us reach the goal of being debt free. We now use our debit cards simply for pulling cash out each month for our expenses (food, laundry, gifts, spending money, etc.) and also for gas purchases. We pay our bills using checks and keep track of every cent we spend or use in our Budget.
SELL THE STUFF!
Previously I spoke about us”simplifying” our lives and selling all the stuff we inherited and purchased over the years. Well this was all for the purpose of getting cash and getting it quick. Some of the debt we owed was from being in the hospital with my youngest…two and a half years ago! So we sold things both in our yard sale this summer and also online through a Facebook yard sale group and Craigslist. This helped us get enough money to pay off the hospital bill AND a small credit card bill we had from my husband’s truck repairs. Overall the total amount was $1000 that was officially paid off last week.
SELL THE CAR!
We had actually begun to try to sell the car back in June on our own but it was not successful so we began to look at trading in our car for a car worth the value of the equity in the car. However we soon found that with the little amount in equity we would have to take a car that would not pass state inspection…and being a family with small children we could not justify this decision. When we soon realized that the safety of the car was just important as getting rid of the $300 car payment we decided to change our view and instead of getting rid of the complete car payment we would try to reduce it. So for the last two weeks we visited every car dealership we could in order to find the right car and right deal. We had three years still left on the loan so we looked at cars that we could easily get 36 months financing on AND reduce the payments. Finally…after two solid weeks of doing nothing but car shopping we found it. And we have reduced our payments to $125 a month AND eliminated $4000 in our debt list.
Our Next Goals
Now that we have eliminated $5000 in debt and $840 in bills each year we are working on our next goals. We have decided to try to sell our travel trailer which is like a car payment and instead look at a pop-up camper once it’s sold. This way we can continue to go camping as a family but not have the heavy weight a huge debt laying on our shoulders and will help get rid of another $300 a month.
After we sell the camper and work on selling more items in our home we will use the “Debt Snowball” effect Dave Ramsey recommends and take the money that would have been used on the car or camper and double up payments to our credit cards. This means that we will be able to tackle the evil credit card debt faster and be out of debt completely in gazelle fashion. Then when we are completely debt free…we can finally start feeling the financial peace and freedom that we are after.
Our “new” 2006 Ford Freestyle
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