After 10 years of living on credit cards, it was finally time to break free.
When my husband and I got married 10 years ago, we were both students initially living with his parents. As newly weds, we loved going out to eat, going to the movies and traveling. By the time my husband graduated, we were already on our way to becoming parents. Our expenses grew a lot faster than our income and we become dependent on our credit cards.
We used our credit cards for everything from groceries to paying bills. Rent was the only thing where cash was required so we saved our cash to make the rent and used the remainder of our monthly income to pay down our credit card. I was still in school and used student loans to fund my education.
Between my husband’s student loans, my student loans, groceries, rent and utilities, we had little or no money left at the end of the month. You would think we would realize the hole we were digging for ourselves. But no!
Our family grew and so we did what any growing family would do, we bought a house. The bank approved us for nearly twice the amount we actually spent on our home. We were overjoyed, because we thought this meant that we were being conservative. If our mortgage payment is half of what the bank thought we could afford then we should be able to save a ton of money every month. Somehow though that wasn’t true. Living beyond our means, we were drowning in debt.
It’s been five years now since we moved into our home, and recently we welcomed our fourth baby, making our family a party of 6. Our monthly income has nearly doubled yet our savings account is always empty. It made us question where our money went every month, and for the first time ever, we decided to make a change in our lives.
I stumbled upon a book written by Dave Ramsey, The Total Money Makeover.
In the book, Dave mentions the importance of tracking every single dollar. Although, I’ve known this for a very long time, some how reading it in the book, motivated me to finally sit down and take action. My brother, who is an accountant, had helped me a few years ago in creating a spreadsheet to track our financial ins and outs. Although, I used this spreadsheet heavily, I mainly focused on the monthly dollar amount to pay and the date in which the payment was due. After reading this book, I began focusing more on the column marked “Remaining Balance” in addition to the amount and payment date.
In the posts to follow I will be documenting my journey and sharing with you all the tools that I discover along the way.
