We changed our plans, and decided to pay off our house.

So how have we been doing on our "Total Money Makeover"?  Well, I will tell you.  As we got to the end of Baby step 3,  my wife's car needed replaced.  It was at 200,000 miles and she needed something more reliable.  So we took money from our emergency fund and bought her an $8,000 car.  Since we were going to have to restart Step #3 again we stepped back and looked at our plan.

Our plan is to move to the country when the kids graduate.  To move we would need to sell our house, or save money for a down payment.  So we decided instead of saving for a down payment the first thing we should do is off our house.  So we decided instead of restarting Baby step #3, to jump to Baby step 6, and pay off our house.

We paused Baby Step 3 with our emergency fund at $2500.  We better knowing we had a little more to fall back on. 

The mortgage only had around $17,000 when we started focusing on it.  Now I am Proud to say we owe $4394.02 on our Mortgage.  When we pay this mortgage off we will then restart Baby Step #3 and save a fully funded emergency fund of $10000.

Baby Step 3 going slow.

August was a low income month.  The last budget we had with an income that was lower, was May of 2011.   We are used to having more money to save at the end of the month.  I find that it really bothered me that we could save very much. 

We did have one problem, the rear tires on my wifes SUV went flat.  The tires were wore through, and needed replaced.   So instead of saving for a vehicle we spent money on tires.

We were able to save for house insurance, a little for vacation, and gift giving.  We also saved $163.13 for emergencies, making a total of  $4,409.45 in our emergency fund. 

Back to 40 hour weeks.

I've worked 40 hours each week, these last couple weeks.  And it looks like there is more of them to come.  The extra money helps the budget, without it, money is more tight.  Being debt free, we can save for everything normal we save for and pay the bills, but that won't leave much for building the emergency fund.

July ended up pretty good, we started working on our house again.  I really do hate hanging trim.  I don't mind building something, but I hate the small details it takes to finish.  I have started a diet also, so far I have lost 9 pounds in the last month.  I started exercising almost everyday, and have decided to not be lazy and stay busy.  So working on the house in the evenings helps me stay busy.  I have been on blood pressure medication since January.  The doctor told me that exercise would help.  Since I have a check up with the doctor this month, the exercise and diet might help.

We managed to save $739.01 for our emergency fund in July.  That brings us to a total of 4,246.32.  We are almost halfway there.  We also have around $2,090 saved for a vehicle and $1,800 saved for home improvement.  The Vehicle we don't think we'll buy till next year, but the home improvement we are going to use to get the rest of our carpet.  There is still probably 500 square feet that isn't carpeted.  It's slow saving for 3 things at once, but we'll get there.

Back to work.....

Right when I got back from vacation, My job had 5 weeks of 10 hour days, six days a week, and option to work on 7 days a week.   The weather was extremely hot and dry, which made for long days outside working.   At least I didn't have to mow the lawn during those weeks, since my lawn is dead from the drought we are having this summer. 

It is property tax time again.  We saved for the last year for it.  My wife went and paid the first of two payments this month.  We could have paid both, but there was a miscommunication.  So we will pay the second payment next month. 

June ended up pretty good. We had a little over two thousand extra at the end of the month. We split it between emergency fund, car fund, and home improvement fund. This is what my wife wants. She wants to save for all 3 at the same time. Which is going to make baby step 3 take a little while. With the $710.63 we saved, the emergency fund now totals $3507.31. We are now a third of the way to our $10,000 goal.

Summer Vacation

We just got back from our summer vacation.  We have been saving for a vacation over the coarse of last year.  We were able to bring one of our son's friends with us.  It was a fun vacation filled with lots of activities.  It was all paid for in cash, and we actually still have some extra vacation money left over.   We haven't decided what to do with the extra vacation money yet.  Some idea have been discussed, but none are final.

May ended up to be a pretty good month.  We had 5 paychecks instead of the normal 4.  So we had some extra room in the budget.  So we saved some money toward home improvement and the car fund.  We also saved 902.38 toward our emergency fund goal.  We now have a total of $2,796.68 in our emergency fund.  We are one step closer to our goal of $10,000.

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!

Back on baby step 2

February is over and we have put the $550.85 we used out of our emergency fund back in, and we paid an extra $1000 on our debt this month also. We also started saving again for future expenses. We had to up our monthly savings for Property taxes and House insurance to make up for the months we missed. We ended up with 3 months we didn't pay extra on debt to save for a car. I feels good to get back to paying down our last debt.

I was hoping to have done our debt free scream by now, but the car breaking down slowed our progress. The next couple months should be good months for us. I am starting to work 20 hours of overtime a week for the next 4 weeks. I am hoping we will have some large payments toward our debt. If all goes well, we'll be screaming "I'm Debt free" in 2 to 3 more months.

Bought a car with cash.

On January 21, 2012, for the first time, we bought a car with cash. We didn't take out a loan, or get a lease, although the dealer tried hard to get us to borrow just a couple thousands so we didn't spend all our money. We shot him down immediately. We told him, it is just our lifestyle not to have debt, and we wouldn't even consider it.

We have been saving since November, and have been looking at cars almost every weekend since then. We did have to use our emergency fund, so our next task it to build back up our $1000 emergency fund.

2 years on the Total Money Makeover.

Well yesterday marked 2 years we have been following Dave Ramsey's "Total Money Makeover" plan. We have paid off 42,037.31 in consumer debt. That is not counting money we have been paying on our mortgage this whole time. I have been using Quicken track my spending for each transaction we make. And I have a spreadsheet which I keep our monthly budget on. These tools have helped me see the fruits of our labors. I have watched out debt go down and our net worth go up.

When we started we were not savers, but now we save for everything it seems. Right now we are saving for a vehicle since my car has died and is going to the junkyard probably. We still in emergency mode. Not paying extra on debt, and saving all our extra money. We were hoping do be done with baby step 2 by now, but we haven't paid off the debt as quickly as I would have hoped. Hopefully we will get a car this month and be back on the debt snowball.

We only have 7668.15 left to pay on consumer debt, then we will start saving our big emergency fund. Wish us luck, cause I want to scream "We're debt free!!!"

Stopping Debt snowball, Switch to emergency mode.

I was hoping that my car would make it till after we were done with baby step 3, but it has bit the dust. It had 217,000 miles and the transmission and clutch are not needing mechanical work. Rough trade in for my car is $250 - $600 dollars according to Kelly blue book. We have decided not to put any more money into the car and to junk it. The bad thing is we just put new tires on it over the last couple months. Luckily we have a spare vehicle, which is an old 1992 dodge Dakota. It runs and was our vehicle to pick up materials for our home improvement projects. I will be driving it until a new gas getter is found to drive to work.

So we have decided to put our debt snowball on hold and go into emergency mode. We are going to stop saving for everything, except Christmas. We are not going to pay extra on debt or do any home improvement. We will pile up some cash so we can pay cash for a car.

We have our $1000 dollar emergency fund, some vacation money saved up that we could use on a car. We have decided not to touch our savings that is allocated for property taxes and house insurance, since they are bills that need paid when they come. But the vacation fund is not a need.

This month with our savings and money we freed up in our budget we came up with around $3500 to pay for a car. We have been looking for 4 door, that gets around 30MPG and has less than 150,000 miles. But car with those qualities are not that cheap. So we have decided to wait till December, by then we may have enough to buy a $5000 - $6000 car. December is a 6 paycheck month for us instead of the usual 4. So we will have extra money in our budget in December that will help with a car purchase. As soon as we buy a car we will go back and built our emergency fund back up, and then start the debt snowball again.

Oct. 2011 summary

I had one week of vacation that I took in October. I used to do some needed clean up around the house. We had some money saved up in our home improvement fund, and used it to get a 15 yard dumpster. I spent a lot of my week off cleaning up all the material straps that we had piled up in the garage. Working on the house produced a lot of trash to big for regular trash pickup. So we had piled it up in the garage. Now we could finally get rid of all the trash.

We had the material already bought and laying around to replace the old galvanized water pipes with PEX tubing. It took me 2 days to replaced all the pipes, move the hot water heater to the garage(out of the cellar), and remove all the old pipes.

I also switched the remaining electrical circuits over to the new breaker box and removed the old breaker box. I also got the furnace in the garage ducted up to our new rooms upstairs so we will have heat upstairs in the new part this winter. The Garage is now clean. We will now be able pull our vehicles inside in the winter.

All and all a busy month with a lot of accomplishments. We ended up spending more that I would have like on home improvements but it needed done before winter. We had an extra $400 to pay on debt.

We're still working the plan.

I haven't wrote anything for a couple months, so I'll give a short recap.

August was a low income month. Not much overtime at all. Also the Wife and I took a short Camping trip out of state for about 5 days. We used money we had saved for vacation that we had left over. It was nice to be able to get away just me and her. After the month was over we only had an extra $400 to pay on our last debt.

September was a busy month. Lots of overtime, so we had some extra room in our budget. Good thing, cause the wife's back tire had a plug come out where I had repaired it. The hole was so big I couldn't even get two plugs to stop it from leaking. So we bought 2 new tires for her SUV. Also we used some the extra money to finish the upstairs bathroom. We bought the toilet, Vanity, and mirror, to finish the room. It is so nice having two bathroom now.

Still after September was over we still had an extra $1000 to pay toward our debt.

I was hoping to be done in two years. It is looking as if it will be more like 26 to 28 months. But we will make through baby step 2 on our Total Money Makeover.

Paid off Fourth Debt!!!

July had a lot happening with our budget. I Paid the Second and last payment for our property taxes and also paid our house insurance. We had saved all year for both and came in almost perfect. We were only $90 short, which we just added to July's budget.

We had the opportunity to work a lot of overtime which helped this months budget. At the end of the month we were only a few dollars short of paying off our fourth debt, the last 401K loan. So we moved some stuff around in our budget and saved a little less in a category and was able to pay off the 401K loan. We ended up paying 2193.75 extra on our debt in July.

It felt good to pay it off and only have one debt left. But if you look at our bank accounts they don't look too good right now. After spending all we had saved for taxes, insurance, and vacation this year. The bank accounts are look very small. Having money in the bank just makes you feel more secure. Oh well, that is was we saved it for, and the process of saving worked out great. Now it's time to start saving for next years Taxes.

The Last Couple months

May wasn't a good month. There hasn't been any overtime, so not extra money in the budget. It reminds me how tight our budget is without extra income. In May, the amount we spent on Gasoline was getting close to double. For the month of May was only made about $6 more than our lowest income month since we started the Dave Ramsey plan. Overall the budget didn't have much room, and we were only able to pay an extra $293.26 on our debt.

June was a little better. We didn't have any overtime either but, we ended up with 5 paychecks instead of 4. We also took our vacation, which was saved for. This let us have one week of the month where all our gas and dinners were paid with our vacation fund, and help ease our monthly budget. Everything was looking good for the month, till we got home from vacation. We had a tree next to the house loose a large section of limbs. When I was chain sawing it up. I noticed the tree was split down the trunk. The tree needed cut down before it fell on our house. So it ended up costing $800 to get the tree removed. There went some of the extra money we had in the budget. After it was all done and said, for the month of June we paid and extra $1200.79.

It looks like I'm going to get a little overtime next month. We'll need it to get us back on track to be debt free by the end of the year.

Aprils budget.

April was our highest income month this year. We were able to Cash flow some of the home improvements that we had done. That way, were use less of our money we had saved. So we still have money saved, which will hopefully buy carpet. Then the house should be mostly done.

Since it was a high income month we decided to budget ourselves a little more blow money. And we budgeted more for entertainment & dining.

Our automobile fuel costs were $150 extra dollars. Our phone expenses were higher because I added minutes to my Tracfone.

When the month was over we payed an extra 2101.42 on our debt.

We also had my Wife's and Son's birthday's this month. But with our Envelope system, we had been saving up money for Gift's every month. We had enough to buy all the presents and still had money left in the envelope. All in all a good month.

Gas Prices are bad for budget.

My wife and I both live about 30 miles from where we work. So in our normal monthly budget our automobile fuel is about 10% of our budget. The recent increase in gas prices is really hitting us. It will be closer to 15% of Aprils budget.

My Wife's vehicle gets around 15 MPG and my car gets around 30 MPG. The bad thing is, my wife's vehicle is the only one the whole family can fit in. So it is used for everything except me going to work. We are trying to minimize how much we use her vehicle, minimize number of trips in general. Hopefully the month of May won't be as bad on our budget.