Everything's Coming Up Green

Archive for the ‘Debt’ Category

Here we go people-2010. It is January 14^th and we have an entire year ahead of us. Joel and I had our discussion at the beginning of December, and since then we went from strong plans to things looking like they were going to all fall apart to just this weekend finally finding resolution with the changes in circumstances. The last couple of weeks before the new year I was less than excited about the upcoming year. Save the joy of a new baby girl, it felt as though it was going to be another year of dreams and desires left unfulfilled. But God always has something up His sleeve. We have our plans, God has His. And somehow, if we are willing to, God reconciles the two and we can walk forward with confidence. So looking forward to the New Year here are our financial goals. Some of them are drastic, some are ambitious, but I am confident that with the Lord’s help we can accomplish every one of them.

Goal #1

Transfer credit debt to a 0% interest card.

We did this last year and were quite happy with having our entire payment go toward the principal. It enabled us to pay almost $2,000 on our principal. We have received several offers for 0% interest for 12 months, so we won’t need to track one down. This will be completed in January.

Goal #2

Save $5,000 to buy a new car.

We bought a car last summer for $700. We have had to put in $250, so $950 total. We were able to pay cash for all of it. That, my friends, was a wonderful feeling. It has served its purpose and we have for sure gotten our money’s worth out of it, but with kiddo #2 coming we need a more reliable car that has better storage. Our plan is to be able to purchase a car by May at the latest. My car hasn’t been doing so hot so we may end up taking out a small loan in order to purchase the car early and then pay it off as soon as the money comes in. I hate to do this, but with the heat only working when you go over 45 mph and having a baby in the back with another due in just a few short weeks we may not have a choice. Especially if the weather continues in the mid west as they say it will. We shall see. The Lord loves to work in mysterious ways!

Goal #3

Sell our house in the spring.

This is one of those big, crazy goals. We are planning to sell the house as is. It needs some work, but we/I (I because Joel was ready to get rid of the house as is and cut our losses long before I was. I felt like it was a reflection on us, when really is not. Life happens and we move on) have come to the conclusion that we do not have the time, resources or money to fix it up the rest of the way. It has great potential though and we are praying that God brings us the right person with a vision for the house. After we sell the house we will then move in with my parents in order to save money and pay off debt. This also allows us to help my parents and grandparents with “the farm” (really its 5 acres with two cats and a dog, but there is a lot of property to keep up with). I am actually really excited about this transition. Though I enjoy having my own space, my family lived with my mother’s parents on two separate occasions when I was a child. It was a wonderful experience having my grandparents so involved in my life. I will also confess that I am not a city girl. I loved living out in the country and am excited for our girls to experience that even if they are really young. We are choosing to “live like no one else so that later we can live like no one else”.

Goal #4

Pay off our $8,000 in debt.

 After the setback last year in our debt reduction due to having a child, getting pregnant again, and Joel switching careers, we are ready to knock this debt out of the park. Achieving this goal goes hand in hand with two of our other goals-Goal #1 and Goal #3. Being able to put everything towards the principal is huge, so obviously a 0% interest card really helps with that.  Also selling our house will allow us to sock a large chunk each month towards debt. Our goal is to be completely debt free by the end of 2010, and that is after we save for a “new” car. I think we can do it though! We sooo badly want to be debt free and start fresh sticking everything extra into savings.

“What’s the big deal about budgets?” “Budgets are so restricting.” “I don’t like feeling like I’m poor.”

     These are common responses to the mention of creating a budget. A big misconception is that budgets are for poor people when in fact it is quite the opposite. Ask any wealthy person if they have a budget and you will get a resounding yes, because budgets are for people who like their money. Poor people don’t budget. It’s all about stewardship. Do you know where your money is going? If not, then do you really have control of your money or is it aimlessly flying out of your checking account going wherever it feels like. Even the very wealthy, who seem to throw money around, have a budgeted amount to spend on whatever they want. Every penny has a place. This is just common sense. And I’ll let you in on a little secret- having a budget and sticking to it is quite freeing. There are no worries about whether or not there is enough money in the account to cover the gas you just put in your car or juggling when to pay what bill so you don’t overdraw you account. In the next few weeks I will be sharing with you basics and tips for a successful budget.

     Joel and I started budgeting (and sticking to it) about four years ago. Let me tell you it has been life changing. In the first three years we paid $10,000 on $25,000 worth in school and credit card debt. You better believe that felt good. We saved $1,000 for an emergency fund and we quit paying overdraft charges which had become a regular occurrence. Then we found out I was pregnant-Surprise! At first there was some stress in the house because, well, as far as we knew Joel was not bringing in enough to cover all of our bills and minimum payments. Finally we sat down to widdle down the budget and lo and behold we could make it happen. I could stay home with our new bundle of joy without any stress or worry about how to make ends meet. If we had not started budgeting and paying down debt three years previously there would have been no way we could have fulfilled our desire for me to stay home with our children.

     Budgets have other benefits too. Like less stress at Christmas, a sigh of relief knowing there is money set aside to replace the tire you just blew, the little happy dance you do when you came in under budget and you get to pay extra on debt or stash it in savings towards whatever you are planning for. If you didn’t have a budget you wouldn’t know you had extra at the end of the month.

     Joel and I started using the debt snowball method by Dave Ramsey. You can check out https://www.mytotalmoneymakeover.com/for inspiration and/or signing up for his extensive online budget program or you can search to see if a church in your area is offering Financial Peace University classes. Joel and I used Dave’s online budgeting program for a year and it was a great jump start to our debt reduction. It was encouraging to see our debt get smaller and smaller. Dave has a wealth of knowledge when it comes to money and personal finances and he has made it his business to help people get on track and become wise stewards of the money and assets God has given them.

      If you are in debt like we were/are the key is baby steps or crawl if you have to. Look at what you can do without, what you can sell, what you can do to bring in extra money. You have to get fierce on your debt. You are now the master and your money is slave to you not the other way around. You can do it. It does get better. The more you pay down the faster it becomes. Just four years later Joel and I have less than $9,000 left in debt except for our house! And you better believe that I sleep better at night. No more laying in bed awake at night trying to figure out how to make it all fit into what little money was coming in. God is faithful to get us out of the financial messes we get ourselves into if we are willing to sacrifice and be diligent to climb back out of the debt hole. Living within a budget is not about going without; it’s about knowing where your money is going. Often we don’t realize how much money we are spending and a budget is a great reality check. Next week I’ll share the basics of building a budget.

Are you on a budget? What has been your experience thus far?