The End is Nigh

Remember me?? I am sure if you are reading this (all 13 followers LOL) I most likely talk to you in everyday life, so you know that I have just been crazy as of late and neglected my poor, sad, little family blog. I don’t even know where to start on catching up. It is 2012 now and I have made my Resolutions, started a “lifestyle change” (it is not a diet  ) celebrated my baby girls ¼ year birthday and preparing for Porter to turn 2 (where the heck did that time go?) and returned back to work. Sigh. It has been hectic.

So, I decided, I will try and catch up my blog on our Resolutions and new pics and such but the place I really want to start is a place very near and dear to my heart (and my wallet). It is a new beginning of an entire different reality in Neil and I’s life, our marriage and our family in 2012. It has been 16 months in the making. I call it, Operation Smith family finance/budgeting. …… Here it is, within the next 30 days, we are going to be consumer debt free!! Can you hear me squealing through your computer…. Cause I am. 16 loooong, hard, hard months are finally paying off. The sacrifice was big but the reward is SO worth it.

Neil gave me permission to share our final pay off number, in hopes that it will inspire or encourage other families to stick with a commitment for a debt free life. What a guy huh?! He pulled his credit report this morning (which has gone up 50 pts or so) so we got the real digits as in how much debt we have paid down, as well as a current credit score. We have our tax return coming that will pay off the final bit. As I said before, we started 16 months ago and within 30 days from now, we will have paid off a whopping … drum roll please……$60,000 in consumer debt. Ugh. That hurts to see in black and white.

We started off what I thought to be a pretty typical American family. We had 2 car loans, we were paying off our wedding, we bought an appliance package, invested in a second home, etc. etc. We have never been the type of people to spend frivolously on credit cards. We always pay our bills, lived pretty comfortably. It was kind of a shock when we did the finally tally. How the heck did THAT happen?! How did we spend that much money and not put the big picture together?! Maybe because cars didn’t equal card card debt in our minds but it is still a monthly payment. Or maybe because we got 0% interest on lots of it, we never thought to question. I am not sure. All I know is….. we had a lot of leakage and something had to change STAT. With children in the mix it became pressing, we decided together on a debt free life (besides mortgages and student loans, that’s next!).

So, the lil accountant that I am, sought a system that would work for us and not allow us to “cheat” easily. I knew we would if we could. My friend Sarah introduced me to Dave Ramsey. I checked him out and for the most part I really liked his viewpoints and ideas. Some, I strongly disagree with but for the family finance stuff, it looked pretty good. I didn’t want to use his generic worksheets so I wrote one specifically for our family. I used his concept of a “0 balance budget” meaning at the end of every paycheck the final number is 0. Every dollar has a place. I created an Excel spreadsheet, wrote down every bill, looked at what we could afford each month as an “extra payment” and did the simple math. Whatever we had leftover each paycheck; we took out in cold, hard cash money, honey.  This was what we lived on. That money had to cover food, eating out, entertainment, clothes, haircuts, house stuff, Costco trips and the whole she bang. When it was gone, it was gone. Some pay cycles, not gonna lie, were really, really, really hard. Also, at the bottom of the spreadsheet, I tracked the balance of every credit card or loan and subtracted all the payments. This allowed us to see our monthly progress and always have a snapshot of what our total debt number was.

Sounds easy enough and on paper, it is. It is MUCH harder to put into action. But a modified cash system worked really well for us. We had to physically see the money leaving our hands. We thought twice about Starbucks, hated breaking $100 bills and sometimes would see how little we could get by on to roll over money for a present, a nice dinner out or a splurge. I sold things on Craigslist to fund things I wanted for the kids, we had a garage sale and we saved our change. It was sometimes tedious and frustrating. Did we slip up sometimes? Sure did. We are human. But not too often or so much we haven’t recovered. We took one vacation to San Diego and saved up to pay cash for that and we were so frugal while we were there, we came home with $200! Perhaps the biggest sacrifice was me continuing to work. It was really heartbreaking to put Porter in daycare. I had massive amounts of mommy guilt over it. But, when we started, we couldn’t make it work safely without my income. This was probably the biggest motivator to pay the MOST we could on each card every month. We had one (and along the way one became 2) HUGE reasons to stick with it. It was a 16 month sacrifice for my kids too. We spend pretty much every waking moment we are not working as a family, so in the end, it has worked out but it has been heartbreaking at times.

I really thought we would never get here. Stuff kept coming up. We had Scarlett, medical bills, car repairs, our water heater exploded and on and on and on. This was not without setback. Two steps forward and an inevitable step back. I couldn’t imagine the spot that we are at right now. I cannot tell you how freeing it feels. I am so grateful I could just burst. I am so thankful for our good jobs, good luck and willingness to both be on the same financial page and work like hell together. Debt free life is a reality that I have yet to live in, but I can’t wait. Before it has even begun, I think we both would tell you it is 100,000% worth it.

We are pretty committed to it now. We aren’t 100% out of the woods. We still have a mortgage and some student loans. We are so into it now, we want those gone too. Can you imagine living with NO mortgage?!?! When I started this, I could never conceive of such a thing. Now, I have seen what we did in 16 months and even if it takes 10-15 years, we will get there. Neil and I both crave the freedom of owning nothing to nobody. What different choices we would make if we could support our family on $1,000 a month?! Money compounds fast with no bills! I am hoping someday, that will be our reality.

Where do we go from here? Our debt goals now become savings goals. Save, save, save is the name of the game now. The economy scares me. I want an emergency fund saved. While we have paid of a lot, we have saved nothing. But first, we are rewarding ourselves (cash only though, tee he). We have decided to finally take a honeymoon and we are thinking of going to Spain. We have saved some cash back rewards on the credit card Neil uses for business travel and he won fantasy football last year and we saved that too, specifically for this very thing. We are going to use points, miles and discounts to do it, but it is our final reward and a send off into a new chapter in our life. It has been a dream of mine since I was little to travel to Europe and it is finally coming true! Neil and I are already brainstorming ideas and ways to be “cash only” in Europe too. I guess we are just used to it now. It is finally all compounding together and the results are becoming real.

So, this is where I end/begin this lengthy post! It is most certainly our biggest achievement other than getting married and having kids and a helluva way to start off 2012. This will be an amazing year. I cannot wait to give back some of our good fortune and I feel more blessed than I ever have in my life. Dave says “live like no one else so that you can live like no one else” and we are certainly gonna give it our best shot.