Tagged with: debt snowball
Dave Ramsey talks about the basic 5 that you need to cover in your budget before anything else: food, clothing, shelter, transportation and utilities. We were so excited about being debt free that we talked about paying off the student loans with the funds from selling the big house before funding the tiny house project.
Our ultimate goal of being debt free has not changed. I've been avoiding writing about any of these topics for a few weeks because I didn't want to admit that we aren't following the program exactly... but the fact is, we're not, and I'm not being honest or transparent if I don't share that part with you.
I'm not saying be a minimalist, but seriously, we had so much stuff.
This past summer we decided to do a major de-cluttering of our house, and I was astonished at how much crap we had stored in places we forgot existed. I had an entire Rubbermaid bin full of purses stashed in the far corner of the crawl space. Upon opening this bin I was immediately reminded that I absolutely cannot live without these purses! (Even though I had been for two whole years... amazing how that happens.)
Since I posted What does debt have to do with it? I've gotten a lot of questions on how we were able to pay off $16,094 worth of debt in six months. The short answer: a lot of long hours, cheap dates, and no vacations or splurge spending. The long answer: we budget every week, use cash, cut expenses, and find ways to save on EVERYTHING.
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.