A Year of Financial Peace

Whew, it's been quite chaotic around here for a little while... lot's going on in life and mostly in very good ways. I told myself just a few months into doing Dave Ramsey's plan and seeing some results that I would share my journey after a year. I am so glad to say that I am as excited to do that now, after that year, as I was when we started. You may remember my post here about getting started Living Like No One Else. Well, here's what that has been like...

I remember so clearly a year ago and what a rude awakening it was to realize how little money we had left after our bills, and to realize that a third of our income was going out every month to debt that was NOT our house. I think the prayer and promise that came along with listening to Financial Peace University must have gone a long way because otherwise I probably would have just cried at the computer, not knowing how we would manage to make it all work. I prioritized food and our children, making sure we would be able to be fed and keep them diapered and clean. Then I allocated very modest amounts to envelopes. I was reasonable and did have an "entertainment" envelope and I can share with you all now that this envelope received a whopping $10 a month, yup that's right. We simply did not have anymore than that to put towards it. That gives you an idea of where we started, and I tried to be optimistic and move forward.

The first few months were pretty exciting, we were actually able to stick to the budget we made with a few adjustments we felt like we were doing great. We were also very blessed because our best friends started FPU last year and have been a HUGE support and partners in the "let's hang out, what do you have in your fridge for dinner tonight" kind of mentality. I know this has made the year considerable easier and more fun. Now, this year was relatively good to us but we also had our rough patches. My husband's job announced last summer that they no longer could afford to cover health insurance benefits at the same level, and that would add another $300 a month to our load. I admit, I cried quite a bit thinking "We finally got our act together and now this. We can't afford to go to out for a date, let alone another $300". Then I put my big girl panties on and got proactive. Dave mentioned in the class that a better route for a healthy family for health insurance was a High Deductible health insurance plan (cheaper per month) with an HSA. As a nurse, I thought this was brilliant, but high deductible means at least a few thousands bucks...a little scary for a young family just starting to get their finances together. So, when we started I thought "We'll look at that when we have our 3-6 month emergency fund in place"...but I am very thankful now that this info was in the back of our minds because when the shoe fell, I did some research. I did some internet searches, and then contacted one of the Endorsed Local Providers for Health Insurance to get some info and quotes, then Tim and I had a long talk. I can say that this process was pretty stressful and not super easy and that we have taken on a bigger risk than I would ideally like. That was our choice though, and when you weigh that risk against the extra $300 a month we would have paid anyways (and that's if rates wouldn't increase next year...yeah RIGHT) we basically took a risk that no major events (more expensive than our deductible) would occur more than once every 3 years. If this is true, than we still save money...which is actually pretty impressive. So, crisis averted and I put the money we saved every month (compared to our previous paychecks...not even the additional $300) towards an HSA and at this point already have $1200 in there. So thanks to Dave's info we are covered and in a BETTER place in that regard than before. We also had some surpise and not so surpise expenses that we were obligated to before Financial Peace, but those all got covered. All the while we worked off debt, by paying every bill, plus EVERY EXTRA PENNY we could squeeze from life in order to pay those off. We worked the HypnoBirthing, cakes, and overtime as much as possible and we sold stuff, not tons of stuff, but quite a bit of stuff to go toward that debt snowball.

When we started a year ago, I was hoping just to live successfully based on a plan, and if THAT could work than maybe to bring our bills down in a year to a place where we would at least break even every month and not have to rely on the "tax bonus". Well, this year has been more than I could even dream. We have lived successfully on this plan, and we've even lived well. We've found ways to still have fun, see movies, go out to eat occasionally, enjoy life. We had Christmas, and yes I spent almost every penny of that budget (just $4.50 left over), but I had NO GUILT after Christmas, I spent exactly what we had planned for Christmas this year. A big thing for me has been the actual Peace part of Financial Peace. I feel an incredible weight has lifted because I KNOW that we can manage our money and anything that comes our way from here on out. Also, it has been incredibly good for our marraige. We used to be stressed pretty regularly about money and maybe not have blow out fights, but definetely have arguments and I'd have the pit in my stomach feeling when it came to our finances. Now, I can remember the one "argument" we've had about money ALL YEAR, and it wasn't so much an argument, but me being upset that my husband had spent $30 while I was out of town that we hadn't planned on or talked about ahead of time. No biggie, we found another spot for that money to come out of, and it really was no big deal. The point is, that is the ONE AND ONLY time we've been in disagreement over money...all year...and we are in a better relationship because of this. It has become easy and important for us to communicate about where our money is going. There is enough in life to stress us out, it feels so good to not argue about money anymore.

The biggest news out of this entire year is where we are as of March. On March 11th I paid off our last credit card and our car loan, so as of last month we are now consumer debt free! (we still have student loans, which is why we are not yet debt free). I could not believe it, I literally cried because it felt so good. In just one year we have paid off  $18,532.69 in debt! It's crazy and if someone had told me last year that this is where we would be I probably would have laughed at them. This, also, more than covers our break even point as this reduces our monthly bills by about $475 A MONTH! I literally want to shout Dave Ramsey's name from the rooftops, because it IS WORKING, and I know that Living like no one else means that we WILL Live like no one else someday...and probably sooner than I imagined.

I got to sit down at the end of March and make our Monthly Cash Flow plan for April, and it was FUN. We decided to re-adjust our finances a little to make room in a few envelopes. We haven't had an envelope for adult clothes this year, and that worked while we needed to get intense and in control, but let's just say that I definetely wore through my jeans and a few other essenials. Not having a budget for clothes is just not sustainable, so now we do. Plus, we've budgeted more now so I can get my hair cut and colored regularly since I am supposed to be some what professional. We also increased a few other envelopes ($15 a month now for entertainment...wahoo!) just to give ourselves a little more breathing room as we keep working this plan and attacking our student loans. Tim has been fortunate enough to have quite a bit of overtime lately, and we are also rewarding ourselves with a bathroom mini-remodel...that story to come :) We'll still have a chunk of extra penny's, though, that I am excited to throw at his student loan.

It's only been a year and with Financial Peace, and we have not been able to call Dave yet for the DEBT FREEEEE!!!! scream, but I wanted to tell you all where we are because if we could do this ANYONE CAN. I want people to know and experience this amazing feeling of success and peace. So, think about it, what could you do with an extra $475 a month a year from now, or even better, what could you do if you had no debt? I'll let you know how it feels in a few years when we get there!