How We Budget

Unlike alot of people who budget monthly, we budget weekly.  Brian and my pay schedules are staggered so we get paid every week.  It's nice to constantly have something to look forward to at each week, but it makes it more difficult to plan out our payments and we never truly have a big chunk of money to pay bills with.  With that in mind, I revised my budget plan that I've been using since I was in college.

I have a notebook calendar of the year that shows the big monthly calendar.  On each month, I indicate what our pay days are with circles and add to the days, what payments are due.  Some payments are on the same day each month (ie. car payments, mortgage, school loan etc.) and some are when we get the bill (ie. utilities, garbage disposal, etc.)  I usually indicate on the right column for notes, what the variable costs are. That way, when I plan out our weeks, I do not forget that the utitlity bill should be due around the 2nd week of the month.

About once a month I take a look at our monthly plan and make an excel spreadsheet to figure out what bills will be paid during each payperiod.  My monthly calendar makes this a great visual to see what needs to paid by what day and with what paycheck.   I indicate each payperiod and mark what bills will need to paid during that payperiod.  I also automatically take out $100 to put towards debt each payperiod, on top of our normal minimum payment. This gives us an additional $400 a month to put towards our debt.  Sometimes, if we are tight on money during a week, this is where the overflow would come from and we might only pay $300 or $350 additional to debt that month.  I also started a new automatic savings, which I will share later.

Since we get paid weekly and not with one pay period, we do need to set money aside for our bigger payments, such as our mortgage.  If I know our mortgage is due by the 1st of the month, usually the previous 2 payperiod each have a large chuck of money set aside, so it's saved throughout 2 paychecks and not with 1.

Also, my excel spreadsheet, I have tabs that are listed for each month, overall debt and our goals. On our debt spreadsheet, I mark each month as what our balance was and what our payments were. Once a debt is paid, it's highlighted and marked off. I love seeing that! By March, I hope to see one more line highlighted and marked off!

How It All Started

How does a newlywed couple get themselves into over $65,0000 worth of debt!?

When Brian and I first met, I carried a bit of credit card debt.  I have always been a hard worker and have worked two jobs since I was 17 years old.  I paid all of my own bills at 15, including a gym membership, car insurance, cell phone, etc. Whatever I wanted, I paid for.  My parents blessed me regularly and I never went without but they firmly believed in teaching me and my 4 other siblings responsibility.  Looking back on it, I'm so grateful they did and I'll be passing that along to my kids too.

Anywho, once I had a credit card, I was able to open up credit cards to all my favorite stores... Express, Victoria's Secret, American Eagle, etc.  Whatever I wanted, I got... just on credit.  I usually had low balances of under $100 on my store cards but my main credit card slowly crept up.  I thought I had a handle on things when tax season came and was one payment away from being credit debt free. And then....

we bought a house in 2009.  We bought a home that was foreclosed on and was vacant for over a year.  There were boards on the windows, mold on the walls, incredibly ugly wallpaper in the kitchen and bathroom, a huge rotted out hole in the kitchen floor... and we bought it, with absolutely NO renovating experience whatsoever.  Naturally, we financed alot of things. Our first plan of action was to take each room at a time and slowly work on renovating each one.  Well once one room looked semi-decent, it made the next one look even worse.  So we went all out and re-did our entire house.  Pictures to follow soon.  Not only did we finance new couches, new bathroom vanities and tubs, etc. but we had to decorate!  I fell into a horrible trap of buy it now and worry about it later.  I sure did have a beautifully decorated house with nice new furniture but with a hefty price tag to it.

That one payment away credit card, soon maxed out at $10,000.  In addition, Brian had a credit card, we had loans through Home Depot, Lowes, our local bank, car loans and now a mortgage. 

I thought we had a handle on our payments but things slowly spiraled out of control. We were drowning in minimum payments.  A came across Dave Ramsey and his Total Money Makeover and finished the book in just a few days.  As soon as I had read the book, I knew our lives would be changed forever.  I scheduled a garage sale and quickly made $1200 in one month.  Soon, we were really seeing the reality of how quickly we could fight our debt.   The story continues.....

2012 Goals

We are ready to take our finances to a new level in 2012!

Brian got some money for school and we are planning on using our tax refund in a big way.  Our goal for this spring is to use our tax refund and Brian's school money for 2 home projects that we have been planning for a while. 

1. New Countertops - we assume that the countertops in our house are the original from when the house was built.  They are an almond solid surface color that has been chipped, cracked and most agrivatingly, stains all the time.  You cannot even let a drop of jelly stay on the counter before it blends into the countertop.  We know that it was high time to buy new countertops.  We were originally going to install a patio in the backyard this year but since we use countertops 365 days a year and we believe it will be a better selling point one day, we have decided to go with the countertops.

2. Carpet - we have tossed around the idea of getting carpet since we bought the house.  We decided to stick with the hardwoods for a while and would buy rugs to suffice.  Well, once we started researching rug prices, we decided that carpet would be the most practical solution.  Plus, I am super happy that my feet will constantly be under carpet and not frantically searching for my slippers every morning.  In thinking of the future, my babies will be able to play around and crawl on the floor without hurting their precious knees and me worrying about every fall they take.

3. Pay $2000 towards our Credit #1. With our usual monthly payments, this will eliminate our Credit #1 debt.  By March, we should be putting our money towards Credit #2 which should be paid off by February 2013.

 I would say eliminating our two main credit cards is a HUGE step of progress for the year.  Once these debts are paid off, we can work with gazelle intensity to pay off our cars.  I cannot wait to be debt free!