Getting Out of Debt

Monday, February 13, 2017

When I shared my goals at the beginning of January, one of them was to have a no-spend year.  The point of the goal was to not spend money on stupid stuff that we don't need.  We majorly failed at this in January, but we're doing much better this month.   Anyway, the point of that goal is that Josh and I are trying really hard and being really intentional about paying off debt.  We hope to be debt free by time his enlistment is up (beginning of 2022).  We both really want to travel and since travel is a bit harder in the Army, we want to focus on getting out of debt now so that when he gets out, we can travel.

I'm not going to lie, we made a lot of stupid choices when we were both at our old jobs.  We could have really worked on our debt and had a lot paid off, but we didn't.  Now that we took a MAJOR pay cut we're really regretting it.  So, we want to take the next few years, where we know we'll have a steady paycheck and wont be worrying about things like buying a house, to focus on getting out of debt.

Most of our debt is my student loan debt.  This is why I take having a job so seriously.  I don't want Josh paying for my mistake (long story), I would feel like crap.  So, any money I make goes on those payments and my other bills.  All together we have approximately $57,000 to pay off.   After seeing a few blog posts and questioning people on Facebook, we decided to try to follow Dave Ramsey's methods.  I bought total money makeover and have been devouring it.

If you've read his book you know that there are seven steps in his method.   Since we are not planning to have kids, step 5 doesn't apply for us and since we don't own a home, neither does step 6.  So, once we make it to those steps we plan to save a 20% down payment for a house in a price range that we find reasonable.  Once we have a house (still a good 5-6 years away), hopefully we'll be at a place where we can make double payments.

Once we get our taxes back, that money is going straight into our savings account.  That should bring us to a little over the recommended $1000 emergency savings that Dave Ramsey recommends.  Then we will be jumping right into step 2 which is paying off all debts, starting with the lowest.   I just accepted a new full time job, and with Josh's upcoming rotation in Europe, we'll be making a bit more.  I'm hoping to have our lowest bill paid off by July.

Inspired by Bailey and her Bailey's Budget posts, I will be sharing my journey with you guys and updating you once per month.  I won't be going into as much detail as Bailey does but I will share the amount of the debt I'm currently paying off and how much progress we've made.   I also hope to share some tips and things that we've done to cut back on our spending and save money.

To start, our first bill amount is $1504.22

This means that in order to pay off this particular debt by July, I would need to pay about $300 per month, which I don't think will be in a issue (minimum payment is $35).  I don't think we'll make too much progress on this in February because I don't start my job until next week and my current job is giving me 10-15 hours per week (ugh).  But I do hope to make more than the minimum payment this month and make a little bit of progress.  I'm also really hoping that posting this helps me stay accountable.  I'm really over being in debt and this is something we both really want to do.

If you have any tips for me, please feel free to share!!

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