Josh and I have made some significant strides with our Total Money Makeover. Since I last posted on this topic, we have funded our Baby Emergency Fund ($1000), paid off two (2!) credit cards, and made a significant payment on the third. If my calculations are correct, we should be credit card debt free by November of this year–at the very latest. Paying off our student loan debt will take a bit longer-okay, a LOT longer, but we’re determined to do it as quickly as possible. We’ve got plans for life, ya know?
One thing Dave Ramsey says to do is to make a budget, each month, that details where every penny is going to go. The budget can be tweaked during the month, if need be, as long as both partners agree to the changes. For us, this month’s budget looks a lot different than what a normal month’s will look like due to our upcoming trip to PA and a few little events that are in the works. Even so, it’s really gratifying to have a list of expenses and to tick them off as they’re paid. We’ve had a budget in place for a few years now, but it was stagnant. I didn’t update it each month to reflect special purchases or unexpected expenses. I think that reworking our budget before the first of each month is really going to help us stay on track.
Another thing that has been really gratifying/trying for Josh and me is using cash for most of our purchases. For us, it’s *much* harder to spend money on coffee at cafes or sandwiches on the run when we have to part with our hard-earned “fun money.” I think that’s the point, though. Having to give up this tangible thing, as opposed to swiping a card, makes you rethink your purchase. Sure, I really wanted that sweet treat from Charmers the other day, but I certainly didn’t need it. Because I had cash on me and had to really consider the consequences of my purchase, I chose not to spend my money. And I feel better for it. And thinner.
How are the rest of you TMM-ers doing? How about an update?
GREAT to hear about the emergency fund and paying off the credit cards. Its a great feeling to cut those things up and out of your life; ESPECIALLY now that they’re willy-nilly changing interest rates like crazy (18-30% interest!?)
We’re in the middle of baby step 2, but we’ve pushed the pause button while we both look for extra work to make up for some recent income loss. It sucks to see interest on student loan building, but we’ll be ready to attack again in no time (c’mon God…i said no time!!! how bout a job, eh?)
We’ve loved having the personal funds too – partly for the chance to really give to each other again. Like back in dating times, it meant something to buy her a drink or some flowers, and now that we have our own little fund, it means something to give each other gifts again. Very cool.
One thing I’ve been struggling with is – how to give while paying off debt. I believe that tithing isn’t some sort of law for us, but developing a spirit of generosity is important even for the most poor and debt-ridden. But I don’t know if I should throttle back during baby step 2, or what…thoughts?
Mark-I think that when funds are truly low, you look for other ways to be generous within your community. There are plenty of places where your time would be valued just as much as a monetary donation, and there are always friends who would benefit from a home cooked meal and the fellowship that accompanies it. You can be generous while aggressively paying down debt…you just need to get creative!
That’s a great idea–generosity is ultimately the point.
On another note, we went on a date night this past weekend, and it felt *great* to have budgeted for it. No guilt, no wondering if we’re spending too much–just dinner and a movie, no strings attached. Ahh.