Yes, we’re still hacking away at our debt, Dave Ramsey style! We’ve made a few small adjustments, though, so I figure it’s a good time for an update.
Here’s our working situation: JHubbs is a classroom teacher, and I am a freelance writer. I bring in the bulk of our income, but JHubbs provides us monthly stability and health benefits.
Since 2011, we’ve been aware of Dave Ramsey’s Financial Peace program. That turned us off credit cards (mostly) and gave us some principles to work with. We didn’t truly embrace it until 2013, when we facilitated our first class. We’ve been as hard core as we can since then, hoping to get to do our debt-free scream some day. And the next budget meeting we have, I want to set a debt-free date by doing some hardcore math.
- We have our Dave Ramsey-style $1000 emergency fund in cash (this is the longest we’ve had one without touching it!)
- We also set aside a $6,000 buffer because I am freelancing. This allows us even more security and a maternity leave if we were to be blessed with a baby.
- I tend to be a “hand in the cookie jar” saver, so we made the $6,000 account “invisible” on our mobile app and when we sign in. It’s there, but it is way out of sight and so it’s been safe for about a month.
- We also save a $1700 “Sarah’s Paycheck” each month so that my income covers what JHubb’s doesn’t each month. Now that we’re out of desperation mode from when I was first laid off and didn’t know freelancing would work out, we are going to up this to a normal paycheck and start being more regular about our house “income.” I’ll likely share another post about how I boosted that number and how it goes.
- A small victory I don’t give us enough credit for is that we stopped using credit cards a long time ago! So even though our balances are patiently waiting for us to snowball through, we are not digging the hole deeper.
- Our first five-figure month, we paid off one of our cars! It felt better than I ever thought it would, and we can’t wait to pay off the other one.
- We’re about to pay off our tax debt from last year, then we’ll tackle a $6,000 credit card, and then we’ll tackle this year’s taxes ($9,000+). (The FPU program goes down your debts smallest to largest, regardless of the payment/interest so that you get those quick wins and get empowered to keep going… that is DEFINITELY working for us!).
- Since we’ve been married (at that moment we combined all our debts and started the first attempt at Dave Ramsey’s method) we have paid off $44,423. That feels UNREAL! We have $75,000 to go, and hopefully it won’t take another four years….
- Let’s see… if we paid $2,000 to our debts every month, we’d still be in debt for 37 months, or three years…. Ow. Maybe I shouldn’t do that math just yet. Here’s a better one: if we pay $2,000 to our debt per month, we’ll be debt free (except for student loans) in 16 months!!!! Now that’s a number I can get excited about! Based on our income, this is a doable plan!
- I bet it’s the same for everyone in debt — spending has been causing us trouble lately! We’ve been in “emergency mode” for almost two years, even though I replaced my full-time income my first year freelancing. Only now are we starting to loosen our belts and get more comfortable with our income… and that’s leading to looser spending (no bueno).
- Trouble spots for spending include things we can’t/won’t cut out: my health stuff (supplements out the wazoo, homeopathic visits, counselors), and vacation/relaxation things to bring down stress levels around here. Granted, the vacations are in the $1,000 range, which could be high or low depending on what you’re used to (about half for lodging and half for travel/food for two people).
- I am proud that we’ve upped our tithing to more than we get for spending money. That might be my favorite expense each month because I’ve never been a really strong contributing member of a community like that.
- We also added a “Catholic Community” fund in addition to tithing so that we can support Catholic businesses, books, and authors, and gather copies of our favorite “share your faith” products (for me that’s Rediscover Catholicism and for Josh that’s Why Do Catholics Do That?). Soon we hope to purchase this Pork Kills Love shirt for Josh!
- The biggest problem we have is the “Murphy Fund,” where we have money in limbo and it just slowly dissolves over time with “legitimate expenses” that come up. For example, we had $1600 waiting for its next orders, but we still haven’t moved it out so it’s dwindled to $800 because of: extra groceries, new shoes, tea, Amazon supplements, Amazon food restocking, extra gas, Meet-Up renewal, etc. Things that are negotiable as necessary, but still not planned. But it always helps me to talk it out, so I have hope we’re going to put a stopper in this ASAP.