My uncle Denny stopped by my blog and said I should post about becoming debt free. The goal I have set is 2 years to no debt except the mortgage, and if the kids would just quit eating and growing out of their clothes I just might make it.
The biggest issue I am having is the budget, I just can't figure out how to get it all on paper and have it make sense. I was using an Excel spreadsheet years ago but I got lazy and now I can't seem to make that work. I am tracking the debt I am paying off but I feel I could pay a lot more to it each month if I would just pay attention. Any of you have easy budgeting tips I would love to know.
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The debt people on the radio tell you to pay off the smallest debt first. This will start you down the road to debt free with a good taste in your mouth. If you want to do two, go for it. Then build a nest egg of cash that will last you a month or two. (Savings not checking) Then build a nest egg that will last about six months in a vehicle where the money is available (Money Market) Then after you build a secure base start after the bigger debts. For a month or two, carry a notebook and write down expenditures not a budget. What are you spending your money on? Once you figure out that you can buy a thermos and take coffee to work you can stop buying take out coffee. Buy a lunch pail and start taking lunch instead of buying take out or fast food. I was in a gas station last week and I saw a guy buy two packs of cigarettes and a candy bar. He got back a few pennies from a $10 dollar bill. I found that when I stopped buying beer there was an extra $20.00 per week in my pocket. I know Kenny is no clothes horse so he isn't buying his clothes at Macy's. I would look for some used shirts for the boys. I find that WalMart jeans or those at Tractor Supply last the longest and cost less. Shoes cover the feet and do not make you jump higher. Buy good shoes but not the $100 a pair sneaks. Look at your food purchases and see if there are a lot of impulse items making their way into your basket. Eat prior to going to the store, do not take kids with you and buy what you need. In a few months when the spending is on record, then it will be time to build a budget. Then we'll talk about how to amortize and attack your house payment. What is your current interest rate? Is it time to talk to your local savings and loan about refinance? We got $60,000 this last summer for nothing down and better rates than those on-line finance companies offered. We will do away with our debt as soon as the Valley Brooke house is ready to sell. We'll put Dave and Barb into a loan for probably around $40,000 so their payment will be less than renting. MUD
Re tracking expenditures and writing down what is spent...I've been doing this for years...and highly recommend it. It takes a few months to figure out what yoru categories should be, and how much you spend in each...but then, like MUD said, you figure out what you can trim out. I have a system that I developed using my PDA such that I start each month w/ each category at 0, and I enter every receipt (rounding up or down, of course...the cents can be tedious). If I reach the limit in one category, I allocate the receipt to another category, and spend less in it. Any 'un-spent' dollars in a given monthly category get tracked in an 'overflow' line, and can be tapped into for unexpected expenditures. Oh...and developing that 6-month emergency fund is important, too. If any of this sounds of interest to you, Kimmy, I'd be happy to talk more....
BTW, I'm planning (weather permitting) to WALK the Olathe half-marathon on 3/29. Wanna join me? : )
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