We’ve been paying off debt for a long time, but did not get intentional about it until the new year. It was then that I actually came up with a plan and worked out all the numbers on a spreadsheet. (Fun fact: I love spreadsheets and use them for almost everything!) I finally saw the big number – I always had a ballpark idea – and decided that we needed to get rid of it. For good.
I started listening to Dave Ramsey podcasts, checking out money saving blogs and just doing a lot of research. (Note: I am not a strict Ramsey follower). I realized that we could have it all paid off (minus the mortgage) in about 16 months! There were some things we were willing to do (like reign in spending, sell tons of unused stuff, dine out less) and other things we were not willing to do (like cancel all travel plans, get an extra job that took us outside the home, put our son in daycare full time). We also have constraints when it comes to paying off debt. We have a child in daycare 3 days a week and cannot reduce this cost. We also cannot stop my mandatory contribution to my pension fund (7.5% of income required to go to pension fund).
Unlike many others, we did not have credit card debt. We use credit cards regularly but never carry a balance. Credit cards have just never been an issue for us when it comes to spending. Our debt is (I should say was because we have paid off the HELOC loan!) a HELOC loan for a bathroom remodel, two car payments and a school loan.
Next step was sharing all of this information, and my big plan, with my husband. I knew he wanted to pay off the debts. I knew he wanted to be able to tell our money what to do, instead of the loans telling our money what to do. But doing this is not easy. It is a lot of sacrifice, and just a big change in general. Change is scary and hard to handle at times. I showed my husband all the spreadsheets – all the spending spreadsheets for the next 16 months – and he didn’t run away! It definitely took a little to sink in and to wrap his head around it, but he’s on board and quite involved.
So far we have been spending some time every weekend decluttering and selling everything we no longer need. In fact, we sold a toilet paper holder this week! I think this is our weirdest sale yet. Some things sell for $3, but we’ve sold things for as much as $100 (our son’s crib that sat in the basement for a year). We’ve been very careful with our grocery and dining out budget – two areas we consistently went over before. We have been making more meals at home than ever. We are spending more time at home as a family. We are finding free things to do on the weekends and are going to the park quite regularly.
Is our budget perfect? No, not even close. But it works for our family and we now have a written down budget crushing plan. It gives me peace and a specific goal to look forward too. T-minus 10 months!