Thursday, February 4, 2016

why I budget... and a financial milestone!

For about a year and a half, I've been on a budget. A real, written, $0 based budget a la Dave Ramsey.

Like most people, I used to wing it with money. I was normal. I had a car payment. I carried a credit card balance month to month. I was putting some money away for retirement, but not a lot. As my income increased, I got better at avoiding debt and no longer carried a balance on my credit cards from month to month, but did still use them regularly. I paid off my Jeep and wasn't looking for an upgrade anytime soon. I sort of kept track of where my money was going, but too often I was a little surprised at my credit card balance each month when I went to pay it off. I really spent that much?? I was putting money in savings, but not always as much as I should have been able to. I was doing better... but it wan't enough. Then in October, 2013... I bought a house.

I started listening to Dave's radio show about a year after buying my house. I would stream an hour a day through a podcast app. (Now, all 3 hours are available as a podcast to stream or download.) I had already been paying extra on the mortgage so I could drop the PMI (private mortgage insurance) I was forced to pay because I hadn't had a 20% down payment, but I realized I could be doing so much more! Then I checked out The Total Money Makeover from my local library. Mistakes had been made that I didn't even know I was making. If I'd only had this great advice sooner! Since we don't have access to time machines yet, all I could do was work to remedy my past mistakes and move forward. Thanks to working massive amounts of overtime, I was able to refinance last February with no PMI and a lower interest rate (not to mention the new 15-yr loan term).

These days, I have no credit cards at all -- yes, I had that irrational momentary panic when I closed the last account over a year ago, but now? I don't miss them one little bit! There are no surprises! If there's no cash in my wallet? I don't spend anything. =) I'm still driving that paid for Jeep and I use cash for most things (aside from mortgage and utilities paid online). I built up an emergency fund and have other savings for non-emergencies that come up. Those unexpected expenses? They may be a little annoying, but they aren't crises anymore. No need for a credit card when you're prepared!

Thanks to the changes I've made this year, buying only secondhand and shopping without waste, I've been able to cut my spending even further which works well with my much more relaxed work schedule. In the past, I'd worked overtime whenever possible and too-often, as much as allowed. Now, I work a nice 40-hr week and have time to enjoy life again. I get to enjoy my down time because I'm prepared, I'm not stressed and I actually like the people I work with. And that overtime? I don't miss that either. Sure, overtime would mean a bigger check and quicker progress, but is it worth it to give up all my time?

And thanks to sticking to a budget, look what I got to do this week!

Woo hoo! I've officially paid off 1/4 of my original mortgage total! And... my next payment will leave me with less than 6 figures in debt which makes me even happier! Progress may have slowed a bit since reorganizing my priorities and making time for a life again, but it's all good. I'm still on track to pay off my home in only 10 years (versus the 30! I originally signed up for) and that is enough. Debt is bad, but so is not having time to relax and enjoy life. =)

If you're looking for a plan to get out (and/or stay out) of debt, I can definitely recommend Dave's plan. He's full of common sense advice. There are no quick-fix promises. It takes work and time, but becoming debt free is definitely possible! And absolutely worth it. I'll get there and so can you!

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