Month 1 of Our Journey to Become Debt Free {January 2013}

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This is the second post of the Becoming Debt-Free Series. If you’ve missed any of them, you can find them here.

I think people need goals in life. Our goal is for me to be a SAHM. After I finished reading [amazon-product text=”The Total Money Makeover” type=”text”]159555078X[/amazon-product], in December of 2012, Clint and I agreed to start Dave Ramsey’s program at the beginning of the new year.  At the end of 2012, we had $26,652.92 in debt, not including our mortgage.

That’s almost $30,000!

Here’s the breakdown:

2012

Dave Ramsey’s program is broken into Baby Steps. There are actually 7 primary Baby Steps, the first of which is to save and set aside a $1,000 Baby Emergency Fund. Before we could do that though, there were a few other things we had to tend to. The baby steps can be further expanded upon, and these are the pre-Step 1’s:

pre-step1

Most of these we already had covered before starting. We did lower our retirement contributions, but did not stop them and we did cut cable and have cut down on all of the extras like eating out and buying nice gifts for each other at holidays. Yes, I said it, we cut our cable off – and we love it!

We worked on completing Baby Step 1 in January so it wasn’t a big month in terms of paying down debt, but it was huge for us because it was the first month that we really and truly focused on where our money was going.  I’ve always been a budget fanatic and had a frugal mentality to some extent, but I’m also impulsive and impatient, as is Clint. When we want something, we get it. So in January, we really tried to not give in to those emotions and only spend the money we actually had and was budgeted.

We didn’t do great, we still created more debt. It’s really hard when you are used to spending money and living above your means, to just stop. We added another $595.30 in charges to our credit cards in January.

We definitely did not beat ourselves up, though. We were getting things in order, we were learning to live within our means, and it would take some time—we accepted that. Although we did charge some things to credit cards, we were busy busy making cash to fund our $1,000 Baby Emergency Fund, or BEF for short. Here’s what we did:

  • Set aside a measly $40 from the budget
  • Sold a name brand purse for $40
  • Sold a gaming system for $50
  • Sold our living room furniture for $600
  • Sold a dining room table for $30
  • Sold a wicker chair for $20

This brought our BEF to a total of $780, only $220 more to go.

At this point we had a bean bag and rocking chair in the living room as our furniture to watch our Netflix and Hulu since we had no cable. We were also going through the house rounding up anything and everything that we didn’t need or use to be sold in the Garage Sale we were having in February. Things were starting to get fun!

I hope you’ll be back each Wednesday to see the progress we’ve made this year. If you’re interested in learning more about Dave Ramsey’s Baby Steps, check out [amazon-product text=”The Total Money Makeover” type=”text”]159555078X[/amazon-product]. Are you ready to become debt free? What is your goal or motivation to do it?

 

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10 thoughts on “Month 1 of Our Journey to Become Debt Free {January 2013}

  1. We have a similar goal for me being a SAHM; and I’ve always wondered how Dave Ramsay’s system works. Thanks for sharing the details…I’ll definitely be following along.

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  2. I’m a big fan of Dave Ramsay and his programs. Without him, I think a lot of people in this country would be in dire straights. I immediately got 3 copies of the program, taped a $20 to each of them and gave them to my two sons and daughter-in-law. They couldn’t have the money until they completed the program. I think it has done all of us a lot of good and I’ve been faithfully doing my snowball for about 2 years now.

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    • Sara

      That’s great Adrian! And just think of the security you will have when you move further through the steps and have a fully funded emergency fund. Thanks for stopping by!

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  3. I bought this book and workbook awhile ago, but never made a serious commitment to take the challenge. I look forward to following you guys on your journey. So glad I found your blog at the SITS blog hop.

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