One thing I blog about is about saving money. Whether it is through, coupons, freebies, or free subscriptions, I post about it. Today I’m taking the big step and going to post about how I’m getting out of debt.
Surprised are you? Sure- I got debt. Before my oldest son was born we were living debt free, both my husband and I worked. We bought a 2 family house and had a rental for extra income. I experienced some difficulty getting pregnant and my doctor suggested leaving my job if we could afford it. Well, we barely could, but we both wanted a baby so bad it was worth it. We had already made the decision that I would not go back to work when the baby came so after I was pregnant I just worked here and there on call. Flash forward a few years later with baby number two and our perfect tenant gave us notice. We made the choice to turn the house into a one family even though financially it would be a strain. So here is the debt part- Sound familiar. We ran up our credit cards while trying to make thing work.
So here we are today, and honestly we are okay. I just want to get out of debt and start enjoying myself a bit more. We tried doing it ourselves and it just hasn’t been working. Until- I started reading Dave Ramsey’s The Total Money Makeover. (which by the way I picked up for free in someones yard sale leftover pile!) Wow- It hit me like a pile of bricks. So I’ll let you know the first steps- that is as far as we have gotten.
1. Come up with $1000 cash. Store it someplace you can get to it at anytime. This is somewhat of an emergency fund. ( you know the car breaks, you need a filling, etc.) Most people when they set their minds to it can do this in a month. We did, but honestly we’ve already blown through it and just got it back. Glad we had it!
2. Start your credit card snowball- make a list of all your payments in order of smallest payment first ( yes, that’s what I said)
3. Pay as much as you can on the smallest balance due, and just the minimum payments on the other cards. It’s called a snowball because once you finish paying off the first card you take that payment and add it to what you are already paying on the next card.
4. Keep making deposits into your savings account to ultimately build up a “real” emergency fund- about 4 to 6 months of your income.
Now- I’m still on the snowball- so I haven’t read much more, but I have to tell you, for the first time I feel as if I’m actually making some progress. I was able to schedule all of my payments automatically which I haven’t been able to do before, and that feels good.
I have more on this topic and I’ll explore another step next week-The Budget-Yuck!
For now-keep living the good life for free or almost free!