It’s that time again for us to reevaluate our budget. As I had mentioned in an earlier post, we have decided to work hard to become completely debt free. We are following the 7 Baby Steps to Financial Freedom from Dave Ramsey and are in step 2 with a bit of step 4 & 5 mixed in.
Well November has come and gone and we had some interesting situations to deal with. Many of you may remember that one of our cars was in an accident. Thankfully everyone was okay but the car was not. When we purchased the car we took out a car loan like most people do. Well since we were fortunate enough to have Gap insurance on our car loan (I highly recommend it), when the car was totaled, the Gap covered anything that the insurance did not. So, our entire car loan was wiped out. But of course, we no longer had a car.
Now that we are on our debt free mission, we decided not to purchase a new vehicle but to find a vehicle that we could afford to just pay for in cash. You know it’s not like we are rolling in the dough so we really had to find something for a small amount of money. That is something we really had never done before. We always would go for the new car with the new car loan. But, after a month long search, I am happy to report that we have successfully purchased a car for cash and I have to say it is really not bad. Yes, it has a lot of miles on it but honestly it looks brand new, it runs great and we are quite happy with it.
So, having removed that car loan and paying our regular payments on our others bills, I am extremely happy to report that we have reduced our debt by 17% as of the end of November. At the end of October we were only at 4 1/2% so the removal of that car loan really took out a nice chunk.
Another thing that I am so happy about is we have gone without putting one single item on a credit card for 6 months. Before this, I don’t think I went any longer then a week without using my credit card. Listen, I’m not going to sit here and tell you that it’s been easy because it hasn’t. It has taken a lot of discipline, the willingness to work together on this from both my husband and I, and the cooperation of my kids to make it happen. And right now, having used up every penny I had to buy that car, well, let’s just say it’s tight. But, within a few months, getting ourselves caught back up and not having that monthly car payment will really pay off in the long run.
I’m happy where the six months have taken us. I am just starting to see a light flickering at the end of that tunnel. There were times that we had to say no to something because it was not in the budget and yes it bothered me, my husband and/or my kids but I always thought to myself how truly fortunate we are. We really have so much to be thankful for. I have a nice house, nice cars, clothes, coats and shoes, my kids are in nice schools, we have jobs, we have our health and most important we are happy. What more can you want in life.
My hope in posting my makeover progress is to inspire others to live below your means and live debt free.
“The amount of money you have has nothing to do with what you earn. People earning a million dollars a year can have no money and people earning $35,000 a year can be quite well off. It’s not what you earn, it’s what you spend.”
-Paul Clitheroe
Cindy Livesey is the force behind Living Rich With Coupons which provides its readers with all the resources they need to shop smart so they can get life’s luxuries for a lot less. Her family of 5 has saved over $11,000 a year in groceries. And you can too.
{ 2 comments… read them below or add one }
Cindy, I have a tip for you to buy a new car with low mileage and save from 10 to 15k on it. Rental companies typically renew the fleet every 6 months regardless of mileage. Ford is in bed with some of the rental companies and run the old rentals through the Ford Dealer only auctions that take place throughout the Country. These dealer only auctions deal with what are called "Program Cars" and that means a variety of things. One of the major suppliers of these auctions are the cars that Ford Motor Exec's drive and turn back in as well as demo's from car shows and a variety of other low mileage sources. Many dealers are big into these program cars and only buy the best condition low mileage cars available, but it takes a little bit of effort to find one. You can typically locate these dealers via ads in newspapers or on the internet. The dealers will have 6 or 7 same model year cars with between 10k to 15k miles on them and would rather sell you one of the program cars than a new car because they make more off the program car. You have to work to find the best deals and will pay more for the lower mileage ones. I just bought my 3rd "new" car and traveled 210 miles from my home to grab this deal. I've found that you get the best deal over the phone by explaining that you're far away and don't know if you want to make the drive and that if you do the car better be perfect. I think the dealers give you a better price because you are a customer that they normally do not have access to and these "program Cars" are pretty readily available to them.Back in the summer, I bought a 2009 Mercury Grand Marquis Ultimate for 16,000.00 with 8000 miles on it after a 3 day phone back and forth. This car retails new for about 28 or 29k and even the program dealers near my home were getting 19 or 20k for a like car. Contrary to popular belief these rental cars are rigorously maintained and the dealers will tell you were they got the car from. I've gotten 150k+ miles out of each of the 2 previous that I've owned without any major headaches. Good luck to all and sorry for the long post. Eric
love, love, LOVE reading about other moms that are changing their family trees by vowing to live a debt free life! Gotta love those baby steps!! keep plugging away….!
{ 1 trackback }