Budgeting is such a vital part of running your household, and yet many of us don’t bother. Up until January of this year, we were very lackadaisical about our finances. Sure, our bills were paid, and our income was decent, but we had a fair amount of debt, and we weren’t making any progress on it at all. That all changed once we started our debt snowball!
HOW IT BEGAN
This January, Paul approached me about adding extra money to our mortgage payment every month in an effort to begin paying that down faster. I was all for it, and we were going to begin that plan.
After thinking about it for a while, Paul instead said we should revisit the Ramsey Baby Steps! YES!! I am all about that! And so we jumped right in.
So we downloaded the Ramsey budgeting app, called EveryDollar, and signed up for the premium plan. I really need that paycheck planning part! (click that link and you can save $10 off the premium version).
I am definitely the “nerd” in our relationship (LOVE a good spreadsheet!), so budgeting is right up my alley. It brings me joy to see these numbers every month, while Paul is less interested in the nuts and bolts of it all.
A LIST OF OUR DEBTS
When we listed our debts, it was very easy to get motivated. Here’s where we started:
- Apple Pencil – $1.50 a month financed, $1.50 remaining
- iPhone SE – $$23.24 payment, $481.80 remaining
- iPad – $49.99 payment, $49.99 remaining
- Court Judgement – $50 payment, $623.72 remaining
- BestBuy – $34.87 payment, $977.73 remaining
- Furniture – $57 payment, $3,991 remaining
- Student Loans – $188.99 payment, $8,857.94 remaining
- Tundra – $266.86 payment, $9,870.49 remaining
- Parent Plus Loan (didn’t know about this until June) – $101.63 payment, $8.735.25 remaining
- Wakefield – $150 payment, $13,908.05 remaining
You can see, our total monthly payments were: $924.08 when we started. Add in that extra $200 Paul was kicking in for debt payoff, and we had $1,124.08 available to kickstart that debt snowball.
WHERE WE ARE NOW
To date, we have paid off all but the Wakefield debt. That’s $33,589.42 completely paid off, on a household income that is just under $100K annually. How are we able to do this and still pay all of our bills?
The budget.
There is simply no other answer!
If it weren’t for our budget, we would not have made this progress, for sure.
Now, to be fair, I did receive a modest inheritance in March of this year that allowed us to add $8,000 to our debt snowball, AND when Paul started his lawn care business back up in March, we were able to transfer $4,700 of his business excess into our account to pay off some debt. Obviously, both of these things were a huge boost to our debt payoff. Even without that, we have paid off over $21,000 with just our monthly income.
However, if we didn’t have a budget in place and a very intentional debt payoff plan, we would most definitely have squandered that money, with nothing to show for it. Instead, we have a mere $12.795 remaining to pay off in our Wakefield Loan at this point!
Knowing where we started, how much we earn, and where we are now, just 10 months later, is VERY rewarding!
If we can do this on our average monthly income, so can you!
Be sure to follow my YouTube Channel for monthly budgeting videos, where I show you how to use the EveryDollar budget to plan your month before it begins. I will even share the adjustments we end up making as the month moves along and we have more realistic numbers to work with.