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
