Shhh...It's a Secret!

I've had a few people suggest that I write about my adventure to becoming debt-free, and since managing finances is an important life skill, I have decided to oblige my readers. I hope this is helpful.

Honestly, I can't take all the credit here, but I'll accept most. Let's start off with the big BANG, the ultimate secret to saving money and getting out of debt:

The key to saving money (for anything, including debt) is to STOP SPENDING IT. That's it.

Here's the reason I'll accept most of the credit for our success thus far: I'm cheap. Some may call it "frugal," but I'm cheap--always have been. I've been a penny pincher my whole life, analyzing and reanalyzing almost every purchase I've ever made. Though my husband has given in to much of my brainwashing since we married almost two years ago, he spent most of his life as an impulse buyer. (More on stress-management later)

So there's Tip #1--stop spending your money. Obviously, this is harder for some than for others. I admit that this has not been as difficult for me as for my husband, but we agreed on a goal and have held each other tight during the moments when ice cream is so geographically close, yet financially out of reach. Sometimes you just have to say "no." Say "no" to those books on your list (my biggest problem, besides doughnuts and chicken nuggets). Say "no" to that fancy hotel and settle for the next best. Say "no" to a night at the clubs and enjoy an evening of games with friends. What I would recommend is to look at all of your spending for any given month; outside of bills and necessities, where does most of your money go--food? movies? music? books? Whatever it is, make a plan to decrease your spending on that vice for the next month. Think outside the box.

My next tip is to read Dave Ramsey's Total Money-Makeover. Not only is he logical and smart, but motivational too! That's the first thing we did before we started to make major contributions towards getting out of debt. We use his envelope system, emergency fund, savings depletion (mostly, anyway, and it was heart-breaking--I'm the saver, remember?), and we've constantly reminded ourselves that we're not even as debt-consumed as most others. Follow his tips, and you'll be on the road to freedom in no time.

 I think the most helpful tool during our journey has been our system of budgeting. I would post an example, but I'm getting hungry, and that would take too long, so I'll just try to explain it.

1. At the beginning of every month, we UNDER-estimate EVERY pay check and add them together (assuming we'll make less than we actually do--we rarely over-estimate, and yes, it's a little more than annoying when that happens). That's our estimated income. 
2. We then list EVERY bill we pay throughout the month, OVER-estimating for any bill that's not concrete, like utilities, gas, etc. This is our estimated costs.We leave a little room for miscellaneous, such as toll bills, oil changes, co-pays, and other stuff that we can still usually foresee. But we still estimate EVERY penny spent.
3. Then we subtract our estimated costs from our estimated income. Whatever is left over goes to debt. Ramsey advises this as well.

Throughout the month, I look in on our income/costs and update the spreadsheet. I have an estimated column and an actual column. We pay towards our debt at the end of the month, so we know exactly what we can afford. For a control-freak like me, this can greatly decrease stress over finances. I no longer freak out when something unexpected happens, because I know we can afford it, even if it means we have to decrease how much goes towards our debt. For an impulse buyer like my husband, having a certain amount of money designated to WHATEVER YOU WANT TO SPEND IT ON can help you gain control of your spending and teach you to be a little bit more conservative.

We've each had to make personal sacrifices, but we haven't had to say "no" to ALL fun. We budget ahead of time when we know friends will be in town or if we'll have a wedding to attend or special occasion coming up. If we have a really good month of income, we budget for date nights and other activities that may cost more than we're used to spending. If we have a less-than-really-good month, we budget for Red Box and gazing at the stars. We've gotten really good at finding deals and steals.

For those of you who are curious, when my husband and I married (again, just under 2 years ago), we were somewhere around $50k in the whole. We hope to be completely debt-free in just a few short months. We're middle class, average Americans. It CAN be done.

Discipline.

If you have any questions or would like some other pointers/advice or have any recommendations of your own, success stories, ANYTHING, please comment. I love getting mail (messages, whatever).