1. Make the Resolution: Spend less than you make. This is a tough one. Spending more money than you earn is common practice in the U.S., and increasingly in other countries around the world.
Spending less than I make is something that i'm definitely taking note of at this time.
2. e have been debt free since the summer of 2011! A) Have you considered taking DR’s Financial Peace University course? The new FPU course is only 9 weeks (1.5 hour sessions) long now instead of 13 weeks (2 hours sessions).
Congrats to you and your family on getting out of debt. No I haven't considered the financial peace university course. I'll take a look into it.
3.B) How are you and/or your wife motivated? [/b]
My wife and I have talked about the finances before where we both sat down and went through line by line to understand why we don't have money for this and that. So we pretty much motivate each other, but we started back sliding a bit and it started getting out of hand. So for the past week i've come on here looking for assistance as I can see that we cannot do this alone.
4. Organize Yourself: Create a balance sheet. This helped us a lot when looking seriously at getting out of debt. C) What is your total debt? How much is the interest rate associated with each debt? What is the total pay off? What is your total Net Worth?
Assets(stuff you own) – Liabilities(debts) = Net Worth
I'll have to get back to you on this one.
5. Choose: D) How are you going to get out of debt? – Lowest balance (Debt snowball) or highest interest.
I'm planning to do a debt snowball starting on the lowest balance.
6. Cut Expenses:
Sell something. Create a budget. Cut. Cut. Cut. E) What are some ways you can cut expenses out of your budget?
See this thread
. Once you’ve created your budget evaluate it periodically but most importantly - Stick to it!
I've just completed my financial tracking starting with this months bank statement. After doing an assessment, I realize that I could've saved about $700 by doing more grocery shopping and cooking. Instead of eating out as well as the money I spent at the movies.
7. Spouses get on Same Page: F) Have you considered how much your wife is actually bringing home each month? How much are you paying for childcare? Is it possibly worth it for her to stay at home and take care of the kids while you all seek to get out of debt? [/b]
I haven't looked into this, but i'm pretty sure that it's more beneficial to us for her to work. Will definitely take a look into this further.
8. Get an Accountability Partner/Coach:
I have a pretty good accountability partner.
9. Save up for an Emergency Fund: $300 (if you make less than $15,000 a year), $500 (if you make more than $15,000 and less than $24,000 a year), or $1000 (if you make more than than $24,001 a year) respectively. Emergencies can and always will happen – car repairs, hospital bills, etc. It is better to be prepared for when the emergencies happen. With your income getting $1000 should be easy. Looks like you have some cash in your checking account. That is a good place to start. I’d say a good goal would be an E-fund with 3-6 months of household expenses. We have 9 savings accounts we use to save for emergencies and expenses we know will happen – car repairs, new car, new computer, medical bills, baby related, purchases, vacation, etc. We don’t even touch our E-fund anymore for most emergencies. H) What system do you think would work best for you?
I'm working toward the 3 month goal right now. With some luck I should be able to get this by early September. Having different accounts for particular expenses I think is a great idea. I'll try that.
10. Increase Your Income: You mentioned you will be seeking a raise.
Yep, I have a good feeling about it at the end of this fiscal year.
11. Set Financial Goals: I) What goals do you want to establish for 2012?
I want to be able to pay the first car down to at least 10K by December of this year.
I'd like to say thanks Eagle for your awesome input. I hope to post here by this time next year with awesome results that I paid off both cars and that we are working towards paying down are mortgage. Until that time I'm going to update this thread with as much info as I can to keep me on the right track. There is an awesome community here with people that really care about one another. That's the place where I want to be. Offline as I mentioned, I have an accountability partner, but I will continue to surround myself with others who are like minded so that I will not backslide.