Wouldn’t you love to be debt free? You would no longer have to pay for medical bills, credit cards, retail bills, student loans, car payments, or a mortgage.
In January, my husband and I have decided to make a goal to live debt free. It may seem impossible, but over time we are going to do it. Our goal in the next year or two is to have most of our debt paid off.
We started off by watching few of the Financial Peace University videos to help us in the process. Dave Ramsey has many steps to go through to get to your goal.
We are also watching Andy Stanley’s series titled ‘Ask it.’ The series talk about what is the wise thing to do in your situation right now.
I had already had a budget set up, but we weren’t following it as well as we should have. We were eating out way too much. We decided to go cold turkey on that. We really haven’t missed it. It’s amazing how much money you can save by not eating out.
So after all the main bills are subtracted away from our income for a month, the remaining amount is for groceries, gas, and any other items we need. We now have a limit each week when we go shopping.
We are first working at putting money towards an emergency fund. We will be putting it in a money market account, so we are less likely to touch it. The money is meant for an emergency not a splurge purchase.
We made several financial goals that we want to save up for, such as, house repairs, vacation, birthdays/anniversary, and Christmas. Each month we are putting money into our saving for each goal. By the time we need the money for each goal, we will have it. We won’t feel stressed out during that time since we are saving up for it.
Next we will be paying off our debt by the lowest bill amount first. When that bill is paid off, we will take that minimum payment amount and add it to the next bill needed to be paid. Then when the second one is paid off, we will add the first and second minimum payment amount and add it to the next. It is called the snowball effect. The debt will be paid off faster since we will be paying more than the minimum.
I challenge you to make the goal with me to live debt free. I know you can do it. Will you take the challenge?