I remember how it started. At the end of last year, a little voice in the back of my head suggested that I take time off from performing in 2011 so that I could work more and pay down debt. I had an easy plan, I said, to work 6 more hours per week, 6 hours that would hardly go noticed in our daily routine but would quickly add up to bigger bill payments. My husband agreed, but he (WE) had no idea what we were in for.
By Valentine's Day, we were halfway through Dave Ramsey's book, The Total Money Makeover. I was creating spreadsheets of budgets and debt repayment plans, and suddenly, our financial future had drastically changed. By the end of April, I had switched jobs, was making more per hour and working 9 more hours per week, and we had paid off three credit cards. For the first time in our marriage, we had an emergency fund ($1,000), a savings account for our taxes (we owe about $3,000 each year), and we were aggressively eliminating debt. And that was only THREE MONTHS after we started our plan!
Now, six months into our plan, we are still amazed at our financial situation. In the first place, we are more on the same page with our financial goals and outlook than we have EVER been in 11 years. Honestly, this has been the most important blessing. Finances are one of the top three reasons that marriages end in divorce, and though we were far from that, it has certainly been a hot button issue for us. It is so precious to start each month in agreement about how we are going to use our money and to be able to look at the big picture with hope!
Second, it is SO EXCITING to see our debt keep shrinking. Unfortunately, we have a ton of it and we will be working on this repayment plan for at least the next 3-5 years. But before this, we didn't have a plan (other than paying the minimum amounts). We were living paycheck to paycheck, getting discouraged any time an unexpected expense (usually cars!) came up that was put on a credit card, and feeling overwhelmed with our level of debt. Now, we have a solid cash-only budget that allows us to live simply each month, a $1,000 safety net to take care of unplanned emergencies, and we keep finding more money to throw at debt. By the end of 2011, we hope to be able to say that we've paid off almost $13,000 just this year! [that is ALOT for us, on our salary, at our level of debt]
One thing that has been (delightfully) surprising this year is the discovery that Murphy's Law works in reverse. If you are unfamiliar, Murphy's Law declares that "if anything can go wrong, it will." So, when one car breaks down, the other one will, too. This is one excuse for how our debt piled up in the first place. But low and behold, once we created an emergency fund that would prevent us from dipping into credit cards - this year has been surprisingly free of large, unexpected expenses. Once we started redirecting our money towards bigger debt payments, we were suddenly blessed with large amounts of unexpected money. Examples: we were given $6,000 this year. I got a second job working from home with extremely flexible hours. I got paid for some administrative work with my theatre company. ALL of that extra money has gone towards debt.
As I said, we still have a very long way to go. But now, we are going at the same speed, with the same mind, towards the same goal. We have peace and hope in this area of our marriage. And we are getting out of debt, freeing ourselves to give more and to control our money, rather than having it control us.
Our financial health improves every day!