Friday, January 9, 2015

Financial Freedom: The First Step

If you're just tuning in, you can check out the first two posts about our financial history and how we acquired $34,000 worth of debt

Welcome back!  When we left off last time we were talking about how we'd racked up roughly $34,000 in debt.  A lot of money.  Like I said before, this was (within a couple hundred dollars) the equivalent of the salary of my first real job.  So, yeah, that was (and is) what I consider to be quite a bit of debt.

Despite being in a chunk of debt already, I'm very glad to be able to say that Neal and I still made some wise decisions regarding that debt.  First of all, I really only "allowed" debt because I thought we needed it.  But from the get-go, I was determined to pay our debt off early.  Neal on the other hand, could care less whether we paid 100 times what was due or whether we paid the minimum.  Can you tell who the free-spirit is?

Because of my determination to pay off debt early, I always paid $50 to $100 (the actual number eludes me but I know I'm close here) more than my actual student loan bill each month....from day one.  Also, to give you a true reference, my student loan bill was only like 90 something dollars each month.  So I was essentially doubling up on payments. 

After we got married in August 2012 I didn't work from August 2012 until November 2012...and even then it was minimal, part time work until February 2013.  We lived pretty comfortably on one income.  We continued to only use our credit cards to pay for gas, and we continued to pay them off each and every month.  We started to save some money each month (10% give or take) but we were only tithing intermittently.  I was doing a monthly budget, but Neal didn't really care to be included in that, and I was pretty good at managing things so we both just left the day-to-day money-matters up to me.  We stuck tight to our budget for a couple of reasons, but mostly because we had to. 

In February 2013 I went back to work full-time and Neal and I were both working 10-12+ hour days every day.  We really fell off the budget bandwagon from about February til April.  We ate out almost every single night (we seriously only cooked at home like one, maybe two nights a week).  Not only that, but I frequently ate both lunch and breakfast out and Neal spent a lot of money on gas station food.  It was bad....for our wallets and our waistlines.  There was one great thing we did during this time; we spent a big chunk of Neal's bonus in March 2013 to pay off my first student loan ($3000).  We then continued to pay the same amount on my remaining student loan. 

Up until this point we had been paying the minimum on our auto loan ($385.18) but once we paid off my first student loan, we increased that amount to $400 a month.  Yep, you read that right, we increased our payment by a whopping FIFTEEN DOLLARS a month.   Haha. I seriously can't help but laugh at that now because I remember, at the time, thinking it was kind of a big deal.  Honestly, the only reason we increased our payment, was because it was easier to keep track of in our check register.  If we were already paying $385, it just made sense to round it up to an even $400.

In April-ish 2013 we got our budget fairly back under control and started cooking and eating more meals at home.  (Side note: If you ever need a reality check, write down all of your expenses for the month.  We were appalled by how much money we were spending at restaurants in a single week, let alone an entire month!)  In May 2013, we made the decision for me to quit my job.  Our household and marriage were not being cared for as they should have been and we agreed that in order for those to be a priority, I couldn't continue working 12 hour days every day. At the time, with my job, not working 10-12 hour days was not an option.  We knew this was a sacrifice financially, but agreed it was 100% worth it for the well-being of our marriage.  I stayed home from about halfway through May 2013 until November 2013.  During this time we, once again, stuck especially close to our budget and we started making some bigger financial cuts.  We got rid of cable, cut back our food bill, ate out significantly less, shopped less, got rid of Neal's smartphone (he's never looked back, by the way. Have I mentioned how awesome he is?!) and enjoyed cheaper date nights (hellllloooo, Redbox!). These changes alone saved us a few hundred dollars each month. 

In October 2013, we joined a small group through our church.  At one of our first meetings, we started talking about Financial Peace University.  Half of our group had already gone through the class earlier in the year, half of us hadn't.  The first class had been held like the day before, so those of us who hadn't gone through it yet, agreed we were going to commit and take the 9-week class. 

FPU was a game-changer for Neal and I.  It did a great job of giving information in a variety of ways which helped Neal and I get on the same page and for the first time in our relationship, we were both excited about our financial goals and our family's financial future.  For the first time in our marriage, we were both 100% invested in our finances.  We had a focus and clear [and agreed on] goals.

Stay tuned for the next post as I walk you through our FPU journey and how that class rocked our world!

P.S. If you're even thinking about taking FPU.  Stop thinking.  GO SIGN UP!

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