So, I've decided that I'm also going to write about our Debt Snowball here, so that I can look back for some encouragement whenever I need it.
For those of you that don't know, Phil and I are following Dave Ramsey's Baby Steps. We took his class, Financial Peace University, and graduated right before Thanksgiving. We haven't used any credit cards since Charlotte was born either!!!
Baby Step 1 is start a baby emergency fund with $1000. We completed this right before our class started, I believe in late August. We put the money in the savings account and its not attached to our checking account or anything. Thankfully, we haven't had to touch it.
Then, it just took us awhile to get going. We started FPU and that was great! It was nice to have a more concrete plan and someone to help us with our budget. There was a lot of good support there too.
In September we paid off my ring... it was on a credit card with 3 months, no interest. We paid it off in the 3 months and closed the account. That was during the beginning of our class, in September. There was $2000 on it (another $1000+ paid in cash to purchase it).
After that, it just took us a while to get our budget balanced. We decided that we really wanted to get married so we added in Baby Step 1b, and paid for our wedding with cash. We did not want to go into debt for it. We saved about $2000 in September-early December and paid for our wedding. The rest of December's extra money we used for gifts, because we hadn't planned very well (before September) for Christmas time.
Finally, this January we were able to start our Debt Snowball! In January, Phil got an extra check (he gets paid every two weeks, so two months a year he gets an extra check). We used it and more money that we had for our debt, to pay off the lowest student loan for $1500. It was our first thing and it felt so good to write the check. Since we paid it before February 1st, we didn't have to pay any interest on it! We then put just over $450 on his other student loan, the next smallest, which is just over $2500 with interest right now (before the $450). It looks like we're going to have another $700-800 this month to pay on it, thanks to mystery shopping, expense checks, and spending less than Phil makes.
I will be posting more documents, just outlining our debt snowball, different debts, and a few other forms that we received during FPU. They're more for me than anything for motivation... but feel free to look. I'll be updating them every few months too so that I can see the progress!
I encourage everyone to check out Dave's Radio Show. You have to put in your email, but that's so they can tell you what radio station it is on in your area. I also STRONGLY recommend Financial Peace University, it costs about $100 and its a lifetime membership (so you can go back again). It is good for all people in all different places in their life. It is often offered at a local church, but you do'nt need to be a member or anything to attend.
If you have ANY questions, don't hesitate to ask!