Not sure I have ever been this "out there", but it's important we are honest about everything. It's a bit overwhelming, but we now have a great plan to deal with it and that feels really good.
I hope we can be an inspirtion to anyone who is reading this. Without asking, I would imagine our total debt is much more than the average family, so if we can accomplish getting out of debt, anyone should be able to.
When it comes right down to it, we have misused the gifts God has blessed us with. It was never our money to begin with, it was His. Now we have to make our selfish choices right.
I think it's very important to realize this process is so much more than just getting out of debt. It's a humbling experience that is teaching us both many things and those things have a value far greater than either of us ever realized. We may gain financial freedom through all this, but God has a bigger plan than just that. We are already starting to see that plan unfold.
Praise God from whom all blessings flow!!!
INCOME
Combined income.................................................$1,260 per/week
Rent from our condo.............................................$900 per/month
Dan's plasma.......................................................$120 avg. per/month
(one more $850 subsistence check in February)
Based on only 4 weeks each month
our monthly income (minus plasma income) ...............$5,940 per/month
BILLS
Mortgage............................................................$1,394 per/month......$151,000 balance
Condo dues ........................................................$99 per/month
Mobile home lot rent, taxes and garbage.................$277.50 per/month
Storage unit.........................................................$40.00 per/month
Mobil home loan....................................................$369 per/month.........$17,774.02 balance
Van loan..............................................................$167 per/month.........$6,723.86 balance
State bank loan (3 ccs consolidated last year)..........$607 per/month........$26,047.05 balance
Van insurance......................................................$62.71 per/month
Alero (car that is for sale) insurance .......................$24.75 per/month
Condo insurance...................................................$11.74
Mobile home insurance...........................................$48.16
Life insurance.......................................................$135.11
Excell energy........................................................$192.59 per/month
Water bill.............................................................$128 per/3 months
Charter (tv, Internet, phone)...................................$124.71 per/month
Chase card...........................................................$249 per/month..............$12,418 balance
Chase card...........................................................$195 per/month..............$6,587 balance
Discover card........................................................$104 per/month..............$5,182 balance
Citi bank card........................................................$333 per/month..............$22,085 balance
Kohl's card............................................................$25 per/month................$920 balance
Subsistence debt...................................................$10,200
(As of right now, Dan will forfeit any yearly bonus until this debt is paid off. We may have to make additional payments in the future.)
Family debt...........................................................$5,400
(This is an amount a family member lent us to pay off a loan with a very high payment right after Dan was laid off. It's not something that will need to be paid on until all our other debt is paid off.)
That brings our total debt (as of January) to...................................$113,282 (not including our condo mortgage)
Budget
Our monthly income is..............................................$5,940 (not including plasma)
Our monthly bills are................................................$4502.27 (not including money to live on)
That leaves us with.................................................$1,437.73
This budget may need to be tweaked a bit, but here is what we are going to start with.
Living expenses.......................................................$150 per/week
(food, diaper/wipes, toiletries)
Church offering........................................................$50 per/week
(we plan to increase this over time)
Gas.......................................................................plasma card
Misc. fund..............................................................$25 per/week
(house/car repairs, clothes, entertainment/vacation, charitable givings, birthday/Christmas fund)
Total expenses........................................................$900 per/month
Extra.....................................................................$537.73 per/month
There you have it. We will apply at least $500 extra each month to the first bill we tackle.
Goals
Since we have started this, we have paid down our total debt by almost $3,000. It's a great start, but we have a LONG way to go.
We are going to use the last subsistence check to pay off the Kohl's card. That will give us another $25 per/month. Our extra per month will then be $560. We should be able to apply all $560 extra (that's in addition to the regular payment we already make) to the next bill, but I need some room in case the budget is too tight, so I am just going to plan for $500.
Dave Ramsey talks about needing to have a log jam plan. Doing something somewhat drastic to really get things moving. Sometimes it can be really slow at first. Here is our log jam plan.
The Citibank card has a very high balance of $22,085. Normally it would not be the next debt to deal with, but as of April 1st, that card will go from 0% interest to 30%. We decided to take a penalty on one of Dan's 401ks. We will apply $10,400 to that loan from the 401k. It will bring that debt to about $11,685. I have already set up to make a $5,700 transfer to a different card with 0% until January of 2011. Once that is done, the debt will be down to $5,985. Our goal is to have most of that paid off by April 1st and here is where we plan to do it.
With everything that I have been selling and the extra jobs I have taken on, I have saved up another $700. $500 of that will be applied to the bill. If we apply the full $500 extra each month, we will have another $1500 which makes $2,000. We have a table saw, scrapbook supplies and anything else I can find that we plan to sell over the next couple months. We should be able to sell another $300, if not more. That makes $2,300. There is an extra week in the month of March, so Dan will receive one extra paycheck and so will I. That's another $1,260. That brings our total to $3560. We are not sure exactly what out tax return will be yet. Dan claimed more this year than he has in past years. We are hoping to get around $1500. That would bring the total to $5060. We are hpoing the Alero will sell as spring gets closer, and that sale will give us more than enough to pay off the remainder of the bill.
Are you wondering where the extra $200 from the $700 I have saved up is going? We decided to take advantage of the timeshares we own (which we rarely do), and take the kids to a waterpark for 2 nights in February. It will be a VERY cheap mini vacation. It's only a couple hours from where we live. The hotel and water park is included in the timeshare and the $200 is for food or extras that we might need. Our goal will be to spend very little of it and bring home the rest, but we wanted to budget for it in case we needed it. We are all looking forward to a few nights away. We decided it will be easier to stay on track with little mini rewards along the way. Ones that are budgeted for of course.
If you are wondering why we don't just sell our timeshare, we have tried. I had it listed with an agent and even had a buyer last year. The deal feel through and now we are still stuck with it. I guess other people are just smarter about buying these things than we were. ;)
We will list all of our loans and credit card payments each month and the amount we paid on them along with the new balance. It will so rewarding to see them decrease each month.I hope you all stick with us to see if we can accomplish our first big goal!!
love
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