Well this otta be fun!! After several years of living paycheck to paycheck, my wife and I have resolved to get our finances under control and become completely debt free. We sincerely hope that by documenting the steps we take, we can help others with similar goals.
I remember my grandfather used to say “The more you make, the more you spend.” I guess he said it often enough that I subconsciously decided to prove him right. Not really, the quote just comes to mind now that we are trying to get our spending under control. The decisions we make are ours alone.
A little of the back story for you. My wife and I went to a little school in rural Ontario together through grades 2-5. I moved to a different city when my parents separated and I didn’t keep in touch with any of my friends from this period of my life. Jimmy and Jenny (Jennifer, she doesn’t like Jenny J) grew up, had kids and started families. After a couple decades, we both found ourselves single with kids. This was around the time I started my Facebook account in early 2008. We both started connecting with old school friends and found each other as well. We started dating and after a few months decided that we would create a new blended family. Jenny has 3 children and I have 2. All was well in the world.
In 2009 we had saved enough to buy a house together and we were completely debt free. It needed some work but it had 5 bedrooms and good guts. We would make it our home. With a few upgrades, very little money and a good market, we were able to increase the value of our home very quickly. That’s where the banks and bad decisions come into the story……
Two trips to Disney World, a trip to the east coast and Cuba for the whole family, a trip to Disney California and Europe for the 2 of us, several more upgrades to our home and an obscene amount of money spent of eating out has led us to today, $82,000 in credit debt and a mortgage that is $20,000 more than what we purchased for 8 years ago.
Well, where do we go from here? Even aside from the obvious spending issues outlined above, there were several holes in our financial bucket. Our first task was to really understand where all the money is going every month.
Wow, we are still paying $21 per month for that website we had such great ideas for a year ago! Well that really got the ball rolling. Cancelled GoDaddy and detailed every single penny coming out of our accounts. Made phone calls to insurance providers, cell phone, internet, Sirius, Visa and the bank. With a few hours of work, we reduced our monthly expenses by $230. Huh! Becoming completely debt free might be possible after all.
Step 1: Understand your expenses, what is coming out when and what are you paying for your services. Detail what you pay in interest for any loans/credit services. (oh, by the way, overdraft is likely the most expensive debt you have….)
Step 2: Call everyone on your expense list and see what they can do to reduce your bill. Don’t be rude (the person on the line is just doing their job) but do not take no for an answer.
Next time I will go into some thoughts about how to save money with money.