Sunday, March 25, 2012

Finances

For the past 4 months my husband and I have been trying to work out a financial plan that will help us pay-down debt, do some things around the house, save some money for future situations, etc. Even though I work part-time, we have set up our finances in a way that we could be quite comfortable, but we have been pretty stressed because we really haven't had a good plan to balance all of our wants, needs, and future goals. Yesterday, crap hit the fan and we were no longer able to keep out stress from rising to the surface.
We decided to focus on paying off the car right about New Year's. The only problem, we took it extremely overboard. We made a budget that was not possible in the least and got frustrated every month. My husband handles the finances for the most part. I have tried to stay up-to-date, but I think we have been dealing with a lot of miss-communication. Every month since the 1st of the year, we have gone over our budget and added less to the bill than we planned. This was so irritating!
After reading a blog from a wonderful budget-er and friend, we decided to sit down and make a realistic budget that would give us a little extra per month for house stuff, and dare I say-food, and would also pay off the car almost two years early. We were so excited about our new found budget, that we took it even farther, and I made up a plan that will go until we are debt free.
I'm embarrassed to say this, but with the house, student loan debt, and the car (luckily we have no credit card debt) our debt lies at about $400 thousand (rough, rough estimate). When I added it all up, I just about had a heart attack! I haven't even told my hubby the actual number for fear he would get a second, third, or even fourth job! But we also already have a safety net in place, have paid off one student loan and a car in the past two years, so I think we are on the right track....it's just a very, very long one.
The new plan goes until every last cent is paid off and as of right now it will take us less than 20 years! I know that this is a very long time, but I also know we have a MOUNTAIN of debt and that 20 years is nothing, when it comes to having zero debt. I'm confident that this plan will actually work, because it doesn't expect that we put every cent toward debt, this way we will be able to stick to it, and we will also be able to save a bit every month so that we will have a good sized emergency fund just in case things come up. Another reason that I know this will work, is because the plan doesn't account for tax returns, raises, bonuses, etc which we hope are in our future.
We finally feel good about out plan and now we can relax!

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