Welcome to the first month of mine and Andrew’s financial makeover! If you’re interested in learning how we decided to start budgeting to pay off our credit cards and loans, keep reading.
When Andrew and I met, our finances were in totally different states. I’d been living on my own for a couple of years, had a pretty good handle on my bills (I didn’t worry about things being cut off), and had started building a credit history (paying off my bill every month). I didn’t have a ton in savings, but I had a little for “just in case”. Andrew wasn’t working at the time (hard to find jobs in a small town; the site he works for isn’t big enough to pay wages), and had student loans from when he had attended college for a while (that were being deferred). As I said, totally different states.
Fast forward a year: Andrew had a part-time job in my town, had moved in with me, but still had no car. Then I had a sudden job change, which led to me working where I do now (~45 miles from where we were living). Now Andrew needed a car, so I pulled money out of savings to lend him for that. Then he also got a new job near my new job. We ended up making that drive every day for 7(?) months, through a really nasty winter.
During that winter, we began looking for a house closer to our jobs. (Andrew also totaled his car on one of those bad winter mornings, and ended up borrowing money from my parents for another car.) Rent was even more outrageous in the new town than what were were already paying, not to mention we had plans to get a cat, which added more to the bill (in places that even allowed animals). The obvious option was to just buy a house. I went through the process of mortgage application (Andrew’s credit was busted by those student loans), we found a house, and boom–30-year commitment to buying a home. Of course there were other expenses attached to the home-buying process, which were super easy to put on my credit card until we could get our finances better settled.
Guess what? In 19 months, we didn’t manage to get our finances “better settled”. Something would come up, or I’d just put it on the credit card (they kept raising my limit!), and pretty soon that started to accumulate because we couldn’t always afford to pay off the balance. Are you wondering about those student loans? They were still accruing interest, and no payments were being made. My savings? Pitiful. Andrew’s savings? Nonexistent. Don’t forget he was still paying back that family loan for the car. Thankfully “Murphy” did not visit us in this time.
In the last several weeks, I started watching some budgeting and debt-free living videos on YouTube (mostly GazelleInTents). I honestly can’t recall how I came across them, but I’m glad I did (along with all the other budgeting YouTubers). I’d heard of Dave Ramsey before, and the debt snowball, and played around with budgeting, but I never got really serious about it. But I’ve been tired lately: tired of running bank balances to the bottom, tired of needing to put things on the credit card because we don’t have the money now, tired of not “owning” all the things we have. (It used to be a point of pride for me to only be paying current bills.)
So starting in December, we’re following the Dave Ramsey plan. I put together a budget in Google Sheets in the style of GazelleInTents (they have a tutorial series). We’re lucky that this month Andrew gets 3 paychecks and in January, I do. If the rest of the month goes as planned, we will be able to complete Baby Step 1 ($1000 baby emergency fund) and work on Baby Step 2 (pay off all debt except the house). Baby Step 2 is where we’ll be for probably the next couple of years though. It could be much worse! The only debt we have besides the ones I’ve mentioned is the furniture we financed (at 0% at least) right after we moved in.
It’s going to take work to really get things under control. This month hasn’t been perfect (go me for picking a gift-giving month to start tightening our belts!). We are doing better than the past few months though, and more importantly, We Have A Plan. Andrew and I have had discussions about this (I really tried not to spring it on him) and hopefully that’s helped his anxiety about his student loans.
I’m not positive how I’m going to work this series into my blogging schedule yet, but I’m thinking a monthly update will suffice. In January, I will post some more specifics about where our balances started (Dec. 1st) and the progress we were able to make.
Are you on a journey to live debt-free? Do you have any tips for us on budgeting? Let me know in the comments!
Don’t forget to follow the blog, and find me on Instagram and Twitter for more content. I’m sharing recently liked YouTube videos in my Twitter feed, including many on budgeting and becoming debt free.
Thanks for reading!