2016 will be THE year.
As God is my witness, it WILL be the year that we pay off the last of our non-mortgage debt.
It has been my
obsession goal since we found ourselves in a dicey situation back in August 2013. That was the month I didn’t know if we had enough funds to cover our expenses. I wouldn’t wish that feeling on my worst enemy.
Thankfully, we have worked through those trials and the experience actually made a positive impact on our finances. At the time, we had 4 business loans and 1 student loan that were weighing on us, so we created our Debt Freedom Plan. Between 2013 – 2015, we whittled that down and as of today we have just two loans left.
Finally, we are able to see the light at the end of the tunnel and are more motivated than ever to pay off these final two loans.
We have more important things to do with our money besides sending a large portion of it to the creditors every month. We have a retirement to plan, our daughters’ college to save for, and many places to visit.
SO THIS WILL BE THE YEAR…YAY….WOOHOO…
BUT……in order to reach our goal by the end of the year, we need to find/earn more money than we currently are able to come up with each month. In other words, I’m coming up short.
Guidelines for 2016:
1. Make it a Necessities Only Year
Non-necessities will take a back seat–for this year. I will focus on being content with what I have and I’m pretty sure I’ll survive. So those new boots I want will have to wait, and besides I have two pairs that will get me through another winter. I think I’ll survive.
2. Choose Thrift First
I have made a pact with myself that if I don’t already own something that I need, I will either: make do with what I have, find said item at a thrift store, borrow, or forget about it. And if forgetting about it isn’t an option, only then will I step foot into a store to purchase it. This will be a struggle and I’ll need to remind myself daily why I’m doing this.
3. Plan our Spending
We will control our money, rather than our money controlling us. By planning our expenses each month to predict purchases, I hope to avoid impulsive purchases.
4. Earn Additional Income
You can only cut so much from a budget, so to fill in our shortfall, we’ll need to also earn extra income by growing our small business and growing my blog income.
5. Apply any Found Money to Debt
This will also be the year that we clean out our clutter. I want to go through our basement, closets, and garage to look for unused items that we can sell. I’ll apply that money to the debt.
What We Won’t Give Up
While this is the year of dumping debt, we still want to enjoy our life. My motto has always been “living well on less” and now it will be “living well on (even) less”. However, there are a few things that we will not give up so I will need to add to our budget.
We work hard and really relish our time away. We have several weekend trips and a summer beach vacation planned for the year. We will continue to save for travel and it is already part of our budget.
2. Home Projects
Our house is in dire need of some TLC. We have some home projects that we need to do and we have already set aside the funds.
We will cut back, but it is unrealistic for me to say we won’t eat out at all this year. I’ll do my best to follow my own advice, 10 Ways to Save When Eating Out, and we will bring snacks, bag lunches, and drinks whenever we can to save money. We do budget for dining out and this year, we will need to be more diligent about staying within that budget.
4. The Girls’ Activities
Our kids are quite active with swim team, Girl Scouts, and school activities. As long as they enjoy these activities and do well in school, they can continue on with them and we will continue to keep them in the budget.
The Game Plan:
1. Before each month, we will plan our spending and try to prepare for out of the ordinary expenses that are outside our normal budget. Fortunately we have an emergency fund and a personal escrow account for our yearly and quarterly expenses to keep us stable, but we do need to be diligent at staying within our budget. The goal is to reduce our monthly spending where we can to find extra money to apply to our debt.
2. Keep receipts and tally up at the end of the month to review our spending. Did we stay on our plan?
3. Post our goal sheet in a very prominent spot, like the refrigerator, bedroom closet door, or bathroom mirror and update it as we make loan payments. I created a debt countdown goal sheet in excel to keep us motivated and have a constant reminder our our goal.
4. Plan all meals weekly or monthly to avoid impulsive meals out, drive thru stops. Restaurants are a budget buster for us, so I’ll need to be extra diligent at this.
5. Apply any found money, unspent money, and/or increased income to the debt.
Most importantly, we need to remember that the sacrifices that we make to achieve this goal are just for this year. If we’re successful, life WILL be different in January 2017…for the better.
What’s your financial goal for 2016? Do you want to eliminate debt too?
Join me: #crushingdebt2016