It's so close, I can taste it!

Next Friday – May 13^th (oh crap, now that I wrote that I’m getting a little superstitious, but I digress…) Next Friday we will make the final payment on our taxes ($2472) and pay off one of our credit cards ($952) – I am so excited! We are finally moving in the right direction. It's such a great feeling!

As I shared before, I was slightly torn on paying the credit card with the highest interest first or this smaller one to get us going and I'm really glad I decided to pay this one. I NEED to cross something off of our list, even if it's relatively small, compared to the others. In this regard, I agree with Dave Ramsey's Snowball Theory. The interest that I will pay on the other card really isn't that much and the great feeling we'll get from knowing we're paying stuff OFF is going to be worth it!

Have a good weekend all :o)

Determined

First off, my apologies for not blogging much this week. I've been on a quest this week to find ways to lower our bills. I'm determined to find us less expensive housing and get my husband a new, better paying job. So, any downtime that I've had has been put towards those efforts. I think my eyes may fall out of my head! I've spent so many hours online searching and searching for housing and jobs.

The quest will continue into the weekend, as we tour local apartment complexes and search the want ads. Hopefully I'll have some good news to report next week! Have a great weekend everyone :)

So long cable bill!

We did it! We canceled our cable/internet. I'm still kind of in shock. Perhaps in denial too. I hate to admit it but we watch a lot of TV. Let me say that again... A LOT! I'm a bit confused, wondering what we are going to do with all that time!

Anyway, let me get to the story... My husband texted me on Friday saying that he thought we should get rid of our cable. I almost had a stroke! Although the idea was in the back of my mind, I never thought he'd go for it. So, I immediately agreed. I've been struggling with ways to reduce our monthly budget so that we could build up our emergency savings and start paying down our debt faster. Cable and internet are nice to have but definitely not necessities in life - especially when you're in debt like us. So, he made the call and canceled our service.

We went in to our local cable office on Saturday to drop off our cable boxes and internet stuff. While in the office, they had about 12 different TV's going at the same time and I could see my husband starting to second guess himself. Believe me, I was too! We stayed the course though and handed in our dusty old equipment.

I should explain that we are not going completely without some form of home and couch entertainment :) We have decided to still keep our Netflix account active. For about $10 a month, we do get a good amount of use out of it. Now, we're planning to get a lot more! There's got to be some old shows that we missed and good movies to catch up on. Also, I do get internet access on my work phone. Although the screen is tiny, it's still access! Lastly, I was able to score a wireless internet card for my work laptop, so I could use that at home as well. Although the speed it dreadfully slow, we're hoping it'll be sufficient to get us online as needed.

Yayyyy! So, that's my good - no, GREAT - news. It's only $120ish a month, but will certainly help us out. Oh yeah, one more bit of news - my hubby also willingly canceled his wrestling show account (about $4 per month). So, make that $125 going towards savings and debt. Today is a good day!

Question : Have you ever given up cable? If so, was it difficult? What did you end up doing instead to fill up all your spare time?

YNAB, Mvelopes and Dave Ramsey...

Until now, I've been using a simple budget that I created in Excel. However, lately I've been reading up more on budgeting ideas. I found Dave Ramsey and his baby steps interesting and have been considering following his approach and maybe even attending his classes. However, I've found some other budgeting software that sounds interesting. One program that caught my attention is called "Mvelopes." It seems to match up with Dave's philosophies (envelope budgeting) and makes it easy for people to track their envelopes electronically. Today I discovered You Need a Budget which seems to push the idea of not living paycheck to paycheck (our current problem) and makes it easy to track your money and get ahead. This also sounds interesting. My frustration is that as I'm trying to dig myself out of debt, I'm not interested in spending more money to buy a program to help me do it. I'm a smart girl and I think I can just use Excel and be fine... however, that approach hasn't worked great for me in the past. Right now I'm considering downloading a free trial version of YNAB to see what that's like. I'm hoping maybe I'll be able to get a few ideas for my spreadsheet which will help me along the way.

Question : Do you follow a certain system or philosophy in your get out of debt journey? How do you do your budget? Do you use any special software to track your budget? If so, have your experiences been positive or negative, it is worth it?

How large should your emergency fund be when you are broke?

Today I was reading an old posting on a blog called Wise Bread, about the size of your emergency fund. As you'll notice, my current savings is at zero ("...point zero" - for those Howard Stern or Animal House fans out there). Anyway, I'm smart enough to know that I need to start growing my emergency fund. What I'm unsure of is how big I should grow it. Since savings accounts are currently paying next to nothing in interest, any extra funds I have at the end of the month, I'd almost rather put right towards lowering our high interest debt.

I do plan to set aside $100 (or more) per month into savings, but at what point will my emergency fund be complete so that I can begin putting that $100 towards debt? I've read different theories on this one. Some say 3-6 months worth of expenses should be your target. That would take me a very long time to do and I think it's a bit more than I feel I want to do at this time. Others recommend $1000 as a good start. I'm worried that $1000 may not go far if I were to lose my job, especially given that our rent is currently at $1375.

I'm leaning towards my emergency savings goal being equal to one month of expenses - to start. I would like to increase that in time, but I think this is a realistic goal to shoot for. A quick analysis of my budget tells me that one month of expenses is about $4500. Wow. That's not rock bottom expenses though. It includes our current cable package, cell phones, NetFlix, paying a little extra on our debt, putting some in savings, etc. If I had to cut some things out and live on the bare necessities, I'm sure we could lower those expenses some. For now though, I'll think I'll target $4500 as our new emergency savings goal.

My current plan puts me meeting only half of that goal by the end of 2011. That would mean December 2012 is when we'd hit our emergency savings goal target. Hmmmm, kinda far off for my liking, but I guess some goals are a little harder to achieve to than others. I keep telling myself that it's a marathon, not a sprint and that we'll get there. We'll get there.

5 Year Plan

Okay... so I'm really anxious to get started on my official "get out of debt plan"! Before this weekend, I was toying with a pretty tight, but good, 3 year plan. Then, after getting the new car and engaged, it's now going to have to be pushed out to 5 years. As much as I don't like it, that's more realistic at this point and will give us a little more breathing room. Unless of course, I win the lottery. Which, I know some people don't like, but I do play! Someone has to win, right?!? Why can't it be me? :)

Luckily we'll probably plan a fairly inexpensive and simple wedding/elopement. We've both been married before and live across the country from our family and most of our friends, so this is the option that we are leaning towards. We both have fun in Vegas, so we're thinking of a quick elopement there. Not sure yet about a honeymoon. Wish we had a little more saved up so we could plan something nice, but it looks like that may have to wait...

This plan is important to me because I need to wrap my brain around how I'm going to get out of this situation. Dealing with debt is like a having huge weight on your shoulders. It's on my mind daily, often hourly, and it's mentally draining. Sometimes when I think about it all, I get really overwhelmed. It can feel as though you are drowning, in a way. Breaking it down into doable monthly payments, where there is at least a rough end date identified, helps me immensely. That's why I'm excited to get it all down on paper, to start the process and kind of in a way, to begin the healing.