Celebrating that we're debt free.

This has been a fun month with our budget. First of all we worked a lot of over time and recieved an annual bonus. This made this months budget over twice the normal budget. So we first paid off our last debt. After that we had to decide what to do with extra money in our budget. We decided to put it in 3 major categories. They were, "The Emergency Fund", "Vacation Fund", and "Home Improvement".

Then we decided to live it up this month. We went and bought clothes for all of us, spending triple what we normally spend in a month. We decided to up our dinning out fund, about doubled it. It was fun live it up a little. It felt great having extra money to play with. I know next month will be back to the normal amount of income in our budget. But we won't have anymore payments except our house payment. It will be great seeing the extra money be put into our emergency fund, rather than being a payment toward our past mistakes. Now that is behind us, and we can start focusing toward our future.

Emergency Fund Goal

We have finnally decided on an emergency fund goal. We took our budget and stripped it down. We took out saving for vacation, new furniture, Gifts (christmas & birthdays), eating out, & home improvement. We came up with around $3300 a month in expenses. We didn't lower saving for Automobile service (fixing the car), pet care, & medical expenses, house insurance, property taxes & gasoline usage. This would still give us flexiblity in our budget.

We looked at what emergencies we might have that we could our incomes and how long they might effect us. We looked at our parents, and their health, their finacial situations. We looked at our jobs and their stablity. We tried to look at any situation that we might use our income and savings, or might cause one of us to take a leave of absence from our job.

We ended up taking the $3300 and multiplied it times 3 months, then rounded it up to $10,000. So we should be okay for 3 months with no income and good for close to 6 months on one persons income. So $10,000 is our goal.

Loosening up the budget.

Now that we are finished with step 2 in the Dave Ramsey plan, we going to loosen up a few dollars in our budget. First we are going to up our blow money by $80 a piece. That gives me and my wife $200 a piece each month. This month we are going to budget in some extra money for clothes. We also got out some extra money for eating out (still using envelope system), we'll see next month if want to leave it higher or not.

We are not making major changes, just a few hundred dollars this month. We'll still have enough to save toward full size emergency fund. We have had a couple discussions on how large an emergency fund we should have. We'll decide soon.

As for now it feels good to be debt free.

We're Debt Free!!!

Friday the 13th wasn't so bad after all.

Today my wife went to the bank today, to pay off our last debt. We have now paid off all our debt except our house. We paid off 49,705.46 in 28 months and 13 days.

It feels so good to finnally reach this goal. But it is isn't over yet, it will never be over, it is now a part of our everyday life. We will still use the envelope system and make a monthly budget. This way of life has helped me and wife communicate so well, our relationship is awesome!

Now it is time for baby step 3, building our full sized emergency fund.

We're Debt Free!!!

I can see the light at the end of the tunnel!

March is over and we are one step closer to being finished with baby step 2. We were able to pay and extra $2000 on out debt in March.

Comparing last years March to this years. We had lower utilities, telephone, and Satalite bills. We also spent about the same about on Automoble fuel. The car we just purchased, gets better mileage and the whole family fits in. So we use it instead out our gas guzzleing SUV. We have seen about $200 a month in savings the last couple months. The last time our monthly budget for Gasoline was so low was a year ago. The increased prices for gasoline was hurting our budget over the last few months, but the new car's fuel efficency has helped offset the fuel price increase.

We are hoping to be debt free soon. Our next paychecks should be our best yet this year. And we are also expecting an annual bonus. Together these should be enough to pay off our last debt!