We're Diving In!

That's how it feels at least--like a huge plunge into a financial whirlwind that feels really scary, uncertain, a little dangerous and risky. Although, I know once we take the plunge and are floating, even swimming in the new "normal" financial realm, we'll become quite used to the shifts and turns we'll be making and be satisfied and proud of our accomplishments and ability to "hold our own" in the mess! Yep, you guessed it we are going to go through The Total Money Makeover by D.R. Last night as we decided we really were going to go all in, I was starting to get a little panicky, but the quickly got SUPER excited about the possibility of being completely debt-free. Doesn't it just sound magical and peaceful. I can't wait!! :) So, here we are, taking one baby step at a time and walking into what will be a life changing, powerful adventure.

So for those of you who haven't heard all of the Dave Ramsey stuff, I'll give you the quick run down. First order of business is to get a budget and stick with it. You have to literally assign a place in your budget to EVERY dollar. Then, you leave the credit card option at home, cut up or hidden and pay cash for everything. This right here is going to be a challenge--keeping to a cash only budget without cheating. So, we have done a quick budget, mostly estimates right now, but it gave us a good idea of where we have a little extra to work with. Throughout the process you revisit the budget every month to make changes that may be necessary, so as we move through this we'll have a better feel for the real situation. Once you have the budget in place, you move onto the first baby step: start up your emergency fund.

The start up emergency fund is $1,000. The exciting news is that we can already cross that one off our list! :) YAY!! One down, six more to go.

Next, you hit your debt hard. Baby step #2: The debt snowball is going to be the most challenging of all. This is when you start getting a little "crazy" about pulling every penny from every where to put toward debt. Sacrifices are inevitable, changes are likely and selling things is a must! So, this is where we are. Getting serious about cutting back any where we can and adding extra income any way we can. We'll be  paying extra payments every month until we can declare freedom from all and any creditors! :) Hallelujah! I'll explain the other baby steps later.

Let me explain a little better the "snowball" analogy a little better to give you a feel for how it really works. You first list out every debt you have from the smallest balance to the largest balance, except for your mortgage. Then, you take the first one and you add every bit of extra money toward it every month until it's paid off. Then you take all the money you were paying toward that bill and the extra every month and put it toward the next largest and so on. In the end you're putting large amounts each month toward the last bill and paying it off quickly.

Our current game plan:
1. Move to the cash budget ASAP and stink to it!
2. Set $1,000 emergency fund aside for EMERGENCIES
3. Make a goals chart and reward system for each $1,000 mark of debt paid off
4. Pay off the first amount in full with remaining savings and extra money from this month
5. Have a garage sale
6. Sell larger items with value on online sales websites
7. Put extra income raises and extra shift income toward debt
8. Lower our contributions to our retirement and put that amount toward debt
9. Pick up odds and ends jobs to help bring in extra income to pay things off faster
10. Make sacrifices along the way to find "extra" in the budget
11. Save for all large purchases to pay with cash.

It's gonna kick our butt a little...maybe a lot, but I can't wait to cross off our first $1,000 off and watch as it snowballs it's way out of our life!! :)

If you have other ideas or cool ways that you've paid off debt let us know--we are always open to hearing other success stories and maybe giving them a try too!