January 21, 2011

Debt Free Friday

Okay before you get excited and start screaming "I'm deeeeeeeeebt freeeeeeeeeeeeeeeeeeeeeeeee!" with me, I'm not debt free. 

If you and your family are, please write me a book down there in the comments section with pointers/encouragement as to how you got there.

But it is Debt Free Friday on the Dave Ramsey show.  I love listening to people calling in telling all about how they got out of debt.  It does make me a twinge jealous though. 

I want that.

But right now I'm not acting like it.  I'm going out to restaurants tonight too often. I'm slacking on my couponing.  I'm bumping the temperature up a few extra degrees when I get home from work. (In my defense on this one, I'm turning it up to 62* from 60*)  I need to refocus.

Right now we have 2 debts: our house and a stoopid piece of commercial property that Jay and his parents bought together before we were married and my "NO" vote counted.  I sort of feel like now that we're on baby step 6, my gazelle-ness has worn off. 

Just in case you haven't drank the Dave Ramsey kool-aid here are his baby steps to getting out of debt and building wealth:

1) $1,000 starter emergency fund
2) Debt snow ball (paying off the debts in order of smallest amount to largest)
3) 3-6 months of expenses emergency fund
4) 15% of income towards retirement*
5) Kids college fund
6) Pay off mortgage
7) Build wealth & give

*This one only applies if you have kids

As you can see, we're sorta, kinda, half way on #6.  Due to the amount of the investment property, Dave (as I've heard him relate to other people on the air) would classify it in step 6. 

Dave would also say "I told you so" on going into partnership with anyone (including family).  Even if Jay and I were in a position to pay off our portion of the land, we couldn't do it right now unless his parents were in agreement.  Since its a piece of vacant commercial land, the loan has to be resigned every 3 years. 

Jay and I have decided that we want to work our buns off to have that money in savings in 2013 so that we don't have to resign. When presented in that fashion, the monthly payment will be lowered by the amount paid in, leaving the payment amount exactly his parents portion. 

I guess part of the reason I'm writing this blog is because I want to get back into it.  I want to save and pay down my mortgage and celebrate that every month is one month closer to being done with BOA (and debt) forever!

Our goal is to have the commercial land paid off (or sold) in 3 years, and the house paid off in 5 4 years.  (5 years was last year's goal, but we didn't do much to pay it down.) 

We're certainly not going to do that unless we buckle down.  I can take my personal spending down from $125 to $100 a month.  That might sound high but remember hair cuts, dinner out with the girls, books, clothes all come out of that budget.  We need to get better about food - both eating out and shopping at the grocery store.

Other than those things (and traveling and remodeling) I don't know where else we could cut back.  What are some ways you save a little extra here and there?


  1. You are doing great! Being that close to paying off your house at your age is wonderful.
    I've been doing lots of couponing and am building a stockpile of great deal foods.

  2. Wow, it's so weird that you wrote this post today...as I planned on working on my budget today.

    Being a student living off of student loans really puts a strain on my purse strings...so that I don't end up running out of money before getting out of school (like I did last semester), I'm writing out a personal budget plan today.

    Sounds like you have some great goals - and you'd be so amazed at how quickly that extra $25 will accumulate. :)

  3. DH and I took a course a few years ago about living on a spending plan (budget word not allowed) and it was quite similar r to what is on your post. With a few differences...
    1. have an acct that will have all your direct payments drawn from it -- then you deposit what is needed in that acct each month (with a bit to spare just in case) These would be bills like electric, phone, mortgage..etc
    2. have a separate acct for savings
    3. the things that usually are cash or are necessities -- church ,groceries, gasoline, entertainment, clothing etc. gets divvied up each pay period into an envelope. This is so it is hard to use a credit card or even your bank card. After a few months of it you really become aware of where your money is going.And it is harder to make impulse purchases if you dont have hte envelope with you!
    Off course before you are to do any of this you need to sit down with all your bills and set out the amount you will need for each acct and envelope (i write the amount of $$ to go into each envelope on the outside so it is easier to remember!☺)
    This has really worked for us and we have found that we not only got a lot of debt under control but we also started actually saving money! Sometimes some envelopes are 'robbing Peter to pay Paul" but for the most part it works! And it shows our kids that we are working hard to manage money too!
    We arent debt free but we are working hard to live within our means.

  4. Girl, you're doing way better than I am! I could probably learn quite a bit from YOU!!

  5. Kyle and I accrued a lot of student loan debt (shocker, I know...), so that has been a big issue with us. However, we have found lots of little ways to cut back, other than just budgeting:

    1. Redbox movies and pizza -- cheap date. =)
    2. Buying gas in the middle of the week, when it's usually cheaper.
    3. For me, I dye my hair one time and then have it professionally colored the next to save.
    4. I also brew my own coffee; rarely will you see me at Starbucks.

    BTW, I haven't tried the dry shampoo with super drenched sweat hair, but I may one day just to see. It's definitely a keeper, though, for nights when I don't have time to take a full-blown shower.

  6. I'm impressed. We're working towards debt-free not including our mortgage and getting there slowly; but we're not as disciplined with our money.

  7. Translation? Roo likes to shop.

  8. Im going to the Financial Peace University classes starting in Feb over at the First Baptist Church in Dandridge! You should look into it too! I cant wait to get this load off of us and any help is appreciated ya know!

  9. sounds like youre doing better than most!

  10. YOU ROCK IT!!! We are baby stepping thru but are so far behind you. :) I can't wait to hear you yell "we are debt free"!!!

  11. i love that yall are getting back on track.
    our problem right now is that we are still trying to save save save.
    all o fthis stuff takes sooo long.

  12. I echo what everyone else has said. To be on Babystep $6 at your age? You are going to be living like noone else REALLY, REALLY soon. You have a great plan!!

  13. I agree - you're doing a great job! :) Won't it be great to be able to scream about being debt free in less than five years?

  14. Um, only $100 a month??? No, that does NOT sound like a lot! You rock!

  15. I love Dave Ramsey! He is amazing!

  16. Looks like you have a good plan. I do suffer from the going out to often and various other spendy stuff. Siiighhh LOL


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