11.05.2014

The cold hard truth-Our Debt

If you missed my post last week you missed the part where I declared boldly that I was obsessed with Dave Ramsey.

I plan to do monthly updates on our Baby Steps but I wanted to share with you some ugly numbers I discovered when embarking on this journey.


First a little back story. When Michael and I first got engaged I had a car loan, a small student loan (3,000) and he had a bike loan. We had no other expenses!!! He had $10,000 saved in an account for a house (from his grandpa).

We for sure got caught up in the hype of buying a home and that we had to do it sooner rather than later and that the only way to buy it was to take out a loan. Looking back if we would have found Dave earlier our lives would look very different but I know this is now our path to walk and we will do it together. 

Anyway we bought a house(used the $10,000 to update it since we bought a fixer upper), and then a lawn mower, and then a new car, and then we decided (when I lost my job) to consolidate some of our other loans into one payment. Then I went back to school while I was laid off and we took out student loans to do so. I graduated got a job and then got pregnant (very much planned) Then things just started adding up we didn't plan for the future (heat in the winter months we use oil which is super expensive) We didn't plan on Grayson going to daycare 3 days a week (a whole different story) and we made dumb selfish decisions.

So here we are and we are $62,353.99 in debt. Hold me sweet baby Jesus because that number scared the shit out of me. That does not include our house.


Once I picked my jaw up off the floor and got my blood pressure down. I decided to read the book before I went any farther. I went into this book thinking no way no how were we going to be able to get out of debt. 3 pages in and I knew we were going to do it. I don't want to get super specific with what we make but we make more than enough and now that we are taking control this debt is going to get a kick in the pants.

Michael is 1000% on board and even though I have been the one over reading about it and getting inspiration daily we sat down and did a full budget and have every dollar spent before the month even started. We also have envelopes for almost everything. Now there are certain things that we cannot envelope. Daycare, mortgage, car loan and other things because we have those on auto pay due to getting a savings because of that.

Now we have a unique situation where Michael has a set income but can (and most weeks/months does) make more than that. So we have decided to set our budget based on his guaranteed take home pay and then any extra goes to our emergency fund and then after that will go towards debt. Our first loan should be paid off by June if not sooner and I'm so excited.

I have decided to update once we complete baby step #1($1,000 Emergency Fund) and then after that am hoping to do monthly updates on our debt destruction. That's what we are calling it. I'm making a chart for our bedroom (because we don't want everyone seeing our income and debt when they come in our house) to show our progress. Listen anyone can do this. Let me take that back anyone who has the drive and determination can do this and will do it. And in the words of Dave Live like no else now so later you can live like no one else.

That's just what we plan to do.

Again I'm not an expert but I love talking about it with anyone!!!