Ending the Paycheck to Paycheck Life & Living Financially Free

Alright folks, let’s be honest; if you’re anything like my husband and myself, you have probably had your fair share of weeks just hoping you would make it by until payday and maybe even having to count your lose change just to scrape up some money for gas in your car. If we’re being totally honest and transparent, my husband and I have definitely been at that point at one time or another. After living paycheck to paycheck for a while, we both decided that enough was enough, and we sought out some wise council from some financially savvy friends of ours. They gave us some mind blowing information… It was then we discovered Financial Peace University and the beginning of financial freedom for us. Now FPU is not fool proof and it does take dedication and discipline. You have to live like no one else so that later you can live like no one else – Dave Ramsey.

So August of 2016 we began our journey to financial freedom. We used extra cash we earned towards paying off some smaller debts that we had. Since August 2016 we have paid off about $10,000 in debt. Now mind you, my husband and I aren’t rich and we don’t make a lot of money. In fact, we make combined what most people make on a single income. So how does the journey to financial peace and freedom work? By following the 7 baby steps. If you want to learn all of the baby steps and how to apply them, we highly recommend looking into taking a financial peace class of your own. It’s the best $100 investment we have ever made and will ever make. For now we are simply going to talk about what we have done so far.

As of right now, my husband and I are currently working on baby step 2: Debt Snowball. With the debt snowball, you pay your debts in order from smallest to largest. Start with your smallest and pay it off as fast as you can. Once you have it paid off, you take the monthly payment you were making and apply it to the monthly payment you are making on your next smallest debt.

Ex: medical – $389 – $25/mo
dental – $471 – $25/mo
credit card – $1,864 – $115/mo
car – $8,976 – $275/mo

Once you pay off the medical bill, then you apply $25/mo in addition to the $25 you are paying on the dental, thus paying $50/mo on your dental bill until it is completely gone. So on and so forth. You do this until all your debts are gone. The key to making this successful and work is to also do a monthly budget in addition to using an ‘envelope system’ things that we will only pay cash for such as groceries, gas in our car, tithing, a car repair fund, etc. We make up a budget based on the worst month we have had pay wise. If we create our budget and we have extra money left over at the end of the month, we decide at that point what to do with it, usually putting it towards debt. On payday, I sit down with my husband and I take the amount of each paycheck, add them together, and then look at our budget and see what things need taken care of before our next payday and then start deducting things from the total pay, until the amount reaches zero. In essence, my husband and I “TELL our money where to go instead of wondering where it went”. Using the envelope system is key because once the money is gone, that’s all there is, there is no more, unless we look and see where we can move money from one envelope to another. We don’t use credit cards and we don’t put bills off so we can do other things. We prioritize what is most important, and if we have something coming up like a wedding, birthday, etc., we budget for that as well, setting aside cash in an envelope just for that reason.

Like I said earlier, we have paid off about $10,000 since last August and about $6,500 of that was paid since we started and completed the class in February. By this time next year we will have paid off an additional $15,000 in debt and then we can tackle those pesky student loans, hopefully paying off about $100,000 in three years. Impossible? Not if you really dedicate yourself and work hard at becoming debt free. People have told us it’s impossible, and don’t get me wrong, we have had our set backs and things that we have had to work around, but it all breaks down to being dedicated, disciplined and working through whatever comes your way and always keeping the end goal in mind.

Check out the class for yourself! Visit http://www.daveramsey.com and check out ‘classes’ and then click ‘financial peace university’ and then click get started. There are classes everywhere happening all the time. It’s always a great time to get started!

Stay tuned for our blog post next week when we talk about Natural Family Planning, how we came to the decision to use it and how it has impacted our marriage so far.

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