Friday, January 3, 2014

Financial Freedom Friday

For me, having debt (and a lot of it) is much like being held captive (or at least house arrest) or perhaps treading water and being pulled under even though you are desperately trying to stay afloat.  I work full time, my husband works full time and then works part time for another job on top of that.  For what?  What do we have to show for it?  I'm tired of living paycheck to paycheck.  I want to be a good steward of what God has blessed us with and get away from this icky thing called debt. 

I think society has told us that debt it ok.  There are credit cards and payment plans and "90 days same as cash" deals promoted everywhere you turn.  We are so much about instant gratification that we can't spend a couple of months saving for something to pay cash for it so we choose to make payments and hope that we get it paid off before they slap us with back interest.  I'm not downing anyone that has had to do this.... we've done it before...several times.  I'm just saying, I don't want to live like that anymore.  I also don't want to live in a world where I feel like I have to keep up with everyone's "grand life" on Facebook.  So it's time for a change...mentally and emotionally.

I'm going to do a monthly post called Financial Freedom Friday to keep myself accountable for 2014.  I want to pay off a good chunk of debt this year.  My 2 main goals for this year are to pay off a credit card (that we unfortunately had to use when fixing up the house) and our car that we bought when Darren got a job 30 miles away...it was better on gas (We are so grateful for the job but I hate car payments and always will).  I'm going to use Dave Ramsey's debt snowball approach for the most part.  Unfortunately this will only touch the surface of our debt but hey...gotta start somewhere :)

I want to go see a financial adviser that uses Dave Ramsey's methods but I know they would tell us to put the money Darren makes from his second job toward debt and we would rather put that into savings.  We don't want to be relying on that money so I'd prefer if it just gets transferred straight into savings as soon as we get paid rather than make a payment towards something that's still going to take me years to pay off.  Does that make sense?

So my goals for January...
~I divided my credit card balance by 5 to see how much it will cost to pay it off by May.  It's a good chunk of money but I'm determined.  So I will start with that for January.
~I also want to make sure that the money that Darren makes actually goes into savings and we don't spend it on anything frivolous. 

Oh. And by the way...I'm a firm believer of "paying yourself" so after tithing, we are making sure to set aside a little bit of fun money each pay period.  We each get an amount so we can either save it or spend it on what we want.... individually.  It's nice to know that I have a little bit of money that I can do something with without feeling guilty for spending it.

Do you have financial goals this year?  Do you have the same views on debt as I do?  Let's get free from that together!  Have any advice you want to give to me or someone else trying to get out of debt... feel free to leave it in a comment.

Thanks for stopping by!

5 comments:

  1. First of all.... You should read some research (yes, it's been done) about the reality of fb and what people put on there. Don't believe everything that you see!! It's mostly what people WANT their life to be, so font use that as a measuring stick.
    Financial freedpm is awesome. I'm so glad you are working on it. For the savings... Maybe consider a number you want to get to.... Say three months of $(rent car food etc), once you are at that number - start moving the part time job wages to debt.
    However, much as you know from weight loss- not spending is easier than earning more. It's tough to tighten down, but as someone that has become debt free (apart from our mortgage). It was the best thing and fastest. Plus, I have 10 years on you - so good for you on doing this sooner!!!! :)

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    1. Oh I know that for sure....the whole Facebook thing. I remind myself of that often. That's a good idea to have a number in mind for savings. I'll do that. We are trying to not spend much (other than the little bit of fun money we give ourselves). That's the only way that I'll be able to work harder toward paying off the debt. Thanks for the advice! It's always nice to hear what has worked for others who have become debt free....and good for you for doing that! :)

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  2. love this! we've been debt free (except mortgage) a few times and it feels great then it creeps back up (ugh) we're in a creeped back up phase so we are also buckling down this year). One of the things we're going to do is no-spend February -- we are going to 'shop' our pantry, no extra spending, just bare minimum, we won't take the toll-roads, we will keep our heat down to 68 and wear sweaters etc....we have a couple gift certificates for SB and Olive Garden so we will keep those for February so Jason and I can have a date night -- found this idea on Pinterest -- I figured a couple of months of this for the year will net us some extra cash :D And teach the kids that we really are privileged - a month of not getting what they want all the time will be a good lesson for them too :D Anyhoo sorry, didn't mean to highjack, I do like tazmin's idea of having a goal for savings, and once that's to goal, use that money toward paying off debt faster -- I would add, 1. save up three months of expenses and then save up for a family getaway -- once you've saved that then pay off debt, once debt paid off use that savings to take that getaway as a celebration -- then back to savings in retirement and college funds etc....

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    1. No Spend February. That sounds interesting. I will think about doing that. You can do anything for a month, right? :) I also like your idea of saving for a getaway on top of my savings goal. I'm sure we'll definitely need a vacation by then. Thanks for commenting! :)

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  3. I haven't heard of Dave Ramsey, but I did a very, very quick read (mainly of his 7 steps) and thought it was quite interesting. I fully understand and support the idea of having an "emergency" fund, and have had one (of around $3000) since I was about 18 years old (I am now 40!). Interestingly, that "emergency" fund should probably now increase, what with two children etc, however, we have pretty good coverage through superannuation for personal emergencies, so I guess I kinda rely on that. Plus we have a reasonable amount in shares which I could access if required.

    I guess, being in Australia, we are lucky as our education expenses were paid back slowly via tax, and weren't too excessive, so I don't really understand the extend of your college expenses.

    Other than establishing an emergency fund, I would be throwing all extra money at debt, given the interest paid on it. And consolidating debt where possible. I haven't had credit card debt since I was about 27 (?) when I resolved to always pay off the balance. That was also when I sat down and did a detailed budget which I have kept up. It was through that careful budget that I managed to save $25,000 for a house deposit, so it can be done.

    Good luck with it all.

    Liz

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