Tagged with: debt
We have a love/hate relationship with taxes. The first year we were married we came out about even. The second year we owed $7,000. The third we overcompensated for the prior year by paying in extra on every paycheck at every job (Zac averages four jobs at all times) and got a $7,000 return.
There always seems to be one expense that doesn't fit in any of our envelopes. At first we decided if it didn't fit in one of the envelope categories (Home, Auto, Entertainment, Personal Upkeep, Mika or Gifts) then it wasn't something we should be spending money on. That lasted about three days. There will always be expenses that don't fit in those categories, you just can't let them deter you from the ultimate goal of being debt free.
Less than 24 hours after I posted Using a Budget: Cutting Costs a suspiciously important looking envelope showed up in our mailbox. A recent article stated it will cost upwards of $400,000 to raise a child (before college!) and I had wondered how that was possible. Sure we have to buy diapers, bottles, baby food and some other items, but all in all we've only added about $200 per month to the budget since Finn arrived, which equals $43,200 over the course of 18 years. I knew that would increase as he started school, sports, and other activities, but how could it possibly creep up to $400,000?!
In my last post, Using a Budget to Get Out of Debt, I shared how we built our budget. However, I didn't share specifics on the amounts we spend because it is different for every family and if I shared those amounts right away you would have said, "there's no way we can live with an $80/week grocery budget" and quit reading. For this post I want to share the ways that we save money on everyday expenses like fuel, groceries, and insurance so we can keep our budget at a minimum and put the maximum amount of money possible toward debt.
Everything. It has everything to do with every decision you will make from now until it's paid off, at least that's what we're learning.
Zac and I were not totally honest with each other about our financial situations when we got married. A few months later when we started combining our bank accounts, the truth came out, and it wasn't pretty. Between the two of us we had upwards of $45,000 in debt. Two car loans, credit cards and student loans. Plus we had just bought a house ten months earlier. We were totally overwhelmed and had no idea what to do…so we just kept working, and living the same way we had been.