Breathe in….breathe out….

Well today we took a leap…the first baby step in the “Total Money Makeover” is to build up a $1,000 emergency fund. We did that with the 401k money that all of a sudden had to be rolled over to a new IRA (which I don’t have) or cashed out. So we cashed it out and had the money for our starter emergency fund.

The second baby step is to start paying off debt by starting with your smallest debt and moving towards your largest. So we paid off our smallest debt this month, paying it off in 2weeks instead of the 5.5months it would have taken when we were paying our normal “minimum” payments.

So….today we took a big step. For me, at least, this was a very hard one. Like I said in my previous post I signed up for my credit cards my first week of college. Since then I have always seen them as a “safety net” if you will. Even knowing I have my $1,000 emergency fund doesn’t seem to help this fear. I still liked knowing that I had my trusty (SUPER high interest rate) card sitting in my wallet at all times. So, for instance, if I was at the grocery store and needed to put something on it, I could!!! Or, if I saw something I just HAD TO HAVE for my princess, it was there. I could always pay it off when the bill came in. Now granted I did not do the frivolous spending that often. More often than not the balance on my card was being steadily raised through the roof by my gas for my car, groceries, etc that are seen as necessities. However I always felt safer putting them on my card, so that the money in the bank was there if hubby needed it for gas, etc. It makes no sense really. In the last month I have not used my card once. Surprised?? So was I!!! Yes it took a lot of self control at times, when I would stand at the Walmart register and my fingers would graze it’s glossy front. I have the #s memorized, but just as the emergency fund $$$ became so easily available when we were ready to jump in with everything, my credit card company also helped me out. My old card expired 10/2011… I was sent a new card around the 1st of Oct, with a new expiration date and new security code that I had not yet had the time to memorize.

Anyway, hubby and I had talked about the fact that now we had our emergency fund set up we needed to shred the cards. I knew it was a necessary step. But it took me a month to actually do it. Yes it’s stupid that I had actually grown attached to something that is literally draining $$$ out of me every month…and, if I had allowed it to, would continue to do so for the rest of my life. So, we took charge. And today, we shredded our cards. Here is a picture of me shredding the one that was most difficult for me to do so (which also, ironically, we owe the most on, AND has the highest APR). In total we shredded 3 credit cards and 3 store cards (although the store cards were paid in full). I just got a little carried away 😛 I will admit….sitting here typing this out, my stomach feels a little uneasy. Basically because I feel like what I saw as my “security net” is gone. But I know this is what was best. Here is my picture of our great accomplishment today:


Our journey…

First off I would like to take a moment to apologize for not posting on this very often. Life has been very busy around here. Let me see if I can catch you up….

The princess: She is now 22 months old (or will be 22months in 2 days), she is a whirlwind of activity. She has learned some sign language, she can sign: friend, play, doll, train, hurt, bath, wash hands, please, bear, stop, go, your turn, my turn, and several more. She can say quite a few words now as well. We tried potty training but she isn’t quite there yet. She got moved to a toddler bed about 2 months ago and loves it!!! She is so big (she’s the height of a 3.5-4yr old) that she could no longer safely be in her crib. Her favorite stuffed animal is a monkey that I got her in Feb from “The Children’s Place”, I swear that monkey gets more hugs and kisses than anyone else ever has or will!!! 😛 She loves coloring, playing with playdoh, building with blocks, reading and watching TV. Her favorite favorite shows are Backyardigans, Blues Clues, Barney and Signing Time. Overall she is a very happy, spunky kid, but she has her moments too 🙂 We love her to death and are amazed everyday at the little girl she is so quickly becoming!!

Hubby: Hubby is teaching middle school and is loving it!!! He also runs the creative writing club as well as the Yearbook club. He thoroughly enjoys what he does and I am so glad he has a job where he can make a difference in the lives of so many.

Me: I am staying busy selling Scentsy ( and with my boutique Missy’s Musings (!!! Things are going well for both and I love the customers I have had a chance to meet and befriend over the last year or more. I feel blessed to be able to be a stay at home mom to my princess while still being able to do things I love!!!

New things going on in our lives…
Many of you know that we experienced a 16month unemployment stint before hubby was able to find a new job. During that time life was very difficult. To give you a perspective….on May 15 2009 we found out we were pregnant, the first week of June 2009 hubby lost his job. The princess was born in January 2010, I was laid off of my job in April 2010, and hubby found a job in Sept 2010. Soooo….that was life for us for 16months or so. It was very difficult but we feel lucky to have gotten through it without losing everything. Our families rallied around us and helped out more than we can ever thank them or pay back.

Present day…because of the unemployment we wracked up a lot of debt. Luckily we do not pay car payments, and we don’t spend frivolously…but the debt still snuck up on us. We were trying to figure out where all of our income goes when we finally sat down to do a written budget. We had never done this before, and I have to admit, it is daunting. Especially when at the end of it you see you are in a deficit. We found out we are roughly $800 in the hole every month. We also found out we pay roughly $500/month in credit card bills alone…and that is only making the minimum payments. So…we decided to take control of our lives and our finances and are on the road to becoming debt free.

The first thing we did was go to the library and get Dave Ramsey’s “Total Money Makeover” book. That book is a line by line instruction guide to get yourself debt-free. I love the way he writes and makes it something everyone can read and understand. The first part of becoming debt free for us was to see where we can save $$$. During unemployment and all we had scaled back our spending to practically nothing. Our “luxuries” were internet and Netflix, with occasional eating out. So we called around, switched car insurances (to a plan that was $80 cheaper a month for the same coverage), called credit card companies to negotiate lower interest rates, etc. We did know that to help make this work we would have to find additional income, it wasn’t a question. So….starting this Tuesday I will be working evenings to help make this plan work.

A lot of people give me a weird look when I talk about becoming debt free. Since our culture as Americans is spend, spend, spend. I remember being told that in order to have good credit you had to have debt. So in my first couple weeks of college I signed up for a couple of credit cards. Now I see how credit can be misused. We are sitting at around $20k in credit card debt (again not from frivolous spending, but still, $20k in debt is $20k in debt). Our goal is to make a better life for ourselves and get our money in order. We don’t want to live paycheck to paycheck for the rest of our lives. So right now we have LOTS of items we are trying to sell to earn extra $$$ to put towards our debt snowball (paying off debt quicker than just minimum payments). The money we get from selling items, in addition to the extra money from our jobs and other ventures will go to pay down our debt.

We just saw yesterday how exciting it is to pay off debt. We got our first, smallest debt paid off. I had still owed money from my hospital stay when I had the princess. When we did our budget we found that it would take 5.5 months to pay off our debt that we still owed from that if we continued to pay the smallest amount. Sooo…..we started selling items and putting that extra $$ towards it. In 2 weeks we paid off that debt. It was so nice to hang up the phone after making the last payment and hearing the phone representative say that she would be sending the “PAID IN FULL” letter through the mail!!! Sure it was a little debt, but we paid it off, and felt great for doing so!!

I am hoping to keep this blog more updated than I had been and chronicle our journey to get debt free. We aren’t rich, we are a normal lower-middle class family with a daughter and 2 dogs. We don’t have lots of money to throw around and buy all the fancy things we sometimes wish we could….but, we are going to do more with what we have. We are going to pull ourselves up by our boot straps and take charge of our financial future, and in doing so, be good role models for our daughter. I hope you will join me on this journey and perhaps our struggles and the reality of it all will inspire you to look at your financial situations and know that YES, YOU CAN DO IT TOO!!!