Sunday, February 21, 2010

Debt Repayment

When my husband and I decided in December to start paying back our debt, we had over $20,000 in consumer debt alone. Neither of us have student loans so that is our only debt not including our car lease and our mortgage.

How did we get there, you ask? We were very, very irresponsible. We wanted instant gratification. We didn't want to wait and save up for purchases. We wanted to live the way we wanted to live, and not the way we could afford to live. We were very stupid.

I get angry with myself frequently when I think back to how irresponsible we were. We knew we were living beyond our means. We thought if we didn't think about it, it wasn't real. I worked for almost a year before we had Pierce. And I knew I needed to do a budget and track our spending, but I honestly thought that if I did a budget and counted up all our expenses and subtracted them from our income, I would find that we couldn't afford to pay our bills. And I wanted to be in denial about that.

Finally, at the end of last year I decided that we needed to do a budget. I am on maternity leave now, making 55% of what I did when I was at work and I wasn't expecting it to be pretty. But it was. I found that with the money that we bring in, we can pay all our bills, have all our necessities, and still have approximately $600 left over to pay towards our debt! Just think how much more money we would've had to put towards debt if I had done a budget when I was still working.

I try not to get angry with myself for waiting so long to get real about the amount of debt we have and make a plan to get us out of it, but it's hard. Think about how much more we could have paid down by now if we had started living on this budget before I went on mat leave! But I can't dwell on that. It's in the past, I've learned from my mistakes, now it's time to reverse it.

What really motivated me to do this were the money management posts on Simple Mom. Simple Mom is another blog run by Tsh of Simple Living Media and offers "Life hacks for home managers." I love this site. So. much. Seriously, go check it out. But come back here when you're finished, okay? Okay.

Tsh posted in her blog about Dave Ramsey's baby steps and that's what we're using to pay off our debt.

I also frequent the Money Matters message board on The Nest. The ladies there are so knowledgeable. After we sat down and did our budget, I posted it there so that I could get some feedback on it. They're so helpful there, I would encourage anyone trying to get out of debt to post their budget there and see what the ladies have to say.

Anyway, I am very proud of us for the progress we've made in the past two months. And it feels good to make a decision not to buy something when I'm out shopping. Of course I don't always make that decision. But I am learning. And that's what's important.

2 comments:

  1. Good for you! Better late than never!

    ReplyDelete
  2. I like how you are getting on top of it, that's awesome.

    ReplyDelete