Goal: To be Debt free except for mortgage by the end of the year. This was established prior to our learning of the significant financial changes that are occurring so I am trusting God to provide direction in this area. Currently we are focused on meeting budget each month!

When establishing this goal last year there were two major problems. The first was that I honestly has no clue what amount that we had in debts. I was afraid to look at it. I did have to look in order to pay off the debt. The beginning number was close to 15,000.  The second problem was that I knew we would be losing the steady income. I was not sure exactly when but I knew it would happen. We did have some significant financial changes this year, the biggest of which is that Matt is no longer receiving a steady income. He has built several websites, with a couple more in the works so this has and is probably going to change more for the positive this year. So  this is not a goal we have been able to meet this year but we have made significant progress toward it. Currently we have around 7500 in outstanding debt other than our mortgage.  We have established a budget, started an emergency fund and are working steadily on playing off this remaining debt.

I am going to keep and update this goal for 2013. Our financial goal will contain 3 parts for 2013. First to pay off all outstanding debt except the mortgage by June, second to increase our Emergency fund to $2000 by December 2013 and most importantly to maintain a budget using a form of the envelope system where all events are planned for and we don’t end up “borrowing” to cover these expenses.  All envelopes will start at 0 at the beginning of the year because my first paycheck is Jan 3rd so this is an easy time to put this in motion.

This year has been a real struggle for us especially in the area of finances. It has brought many changes both expect and unexpected, however I can honestly report two things. First and foremost, we have experience and have no doubt that God is in control. Second, I have learned more about my spending habits then I thought was possible.

One of the goals that I set at the first of the year was to be debt free except for our mortgage by the end of December. My logic behind this was that I knew Matt would no longer be receiving a steady income and I wanted to adjust our budget so that we could keep even for at least the remaining two years that Matt will be at home full-time.  I  don’t expect that we will be meeting this goal this year. However I am not disappointed at all. During the month of December, we have made HUGE steps in this area!  I had previously mentioned that Matt would be receiving his pension from Ecolab this month. That has occurred. We decided to use this to get us set up on the Dave Ramsey- debt free plan. How this looks for our family may be different that what you expect but I am excited to see things moving in the right direction.

First, I can honestly say that we have a budget that is very specific and doable. I have added many categories to my previous budget to include things like car insurance, clothing, hair and gifts. I know that this is going to take work over the next year to first of all stick to the budget but I can see things starting to change! That feels so awesome that I want to continue on this path even if it means not going out to eat or spending  less on gifts!  Along the same lines, I have begun using the envelope system to track both our grocery budget and gas budgets. I had resisted this in the past due to using cash to pay for gas is now a big ole headache. I was able to find a free app on my IPhone that has made this a breeze!  I can easily add money and just as easily subtract with each transaction. At a glance, I can tell how much is left in each of these categories!  It also make spending the money more difficult for me because I have to decide where I am going to subtract from and seeing it in front of me makes this more difficult. Next, we are making progress on the “Baby Step” that Dave Ramsey uses.  Our Emergency Fund is considered fully funded with $1000. I do plan to make regular additions to this fund for the next several year until it reaches $10,000 but baby steps allows us to accomplish things quickly so we will want to continue. Baby Step #2 is to create a “Debt Snowball”.  I have created a list of all outstanding debt that we have except for our mortgage, currently that number stands at just over $8000 consisting of 12 items.  We have been able to pay off 3 of the smaller medical bills and see a blank hole is also very motivating as well.

My goal that I am working toward currently is to pay off 2 more items on  our debt snowball list. Due to our very tight budget for next year, it is not truly a debt snowball where elimination of each debt adds additional money to pay of the next debt. This simply does not work currently for us because we have not been making consistent payments on the majority of these debts but the idea of paying the smaller debt first is working and again very motivating.

I have been very honest and use real numbers for this update, I hope it helps encourage and/or motivate you!