I’ve gotten so many requests to write a blog post about this. Numerous people have messaged me asking what we’re doing or for details on our Savings Road Map. So here we go, I’ll go into all the details below BUT I have to say up front, what we’re doing is nothing new. It’s a tried and true and a time-tested, fail-safe way of getting out of debt. Are you ready for it?! We work incredibly hard to live within our means. That’s the secret. I know it’s a shocker, and you may be saying “that’s it?” but, Friend, let me tell you: it is one of the hardest things I do on a daily basis. Like anything worth having (a healthy lifestyle, an amazing marriage, etc)- there is no magic formula. It requires hard work and dedication on a daily basis.
We are BIG Dave Ramsey fans. I mean, I’ve read all his books. We’ve done Financial Peace University at our church. I’ve even contemplated leading our own course for accountability at some points. I actually discovered Dave Ramsey when I was working at a law firm. One of my main responsibilities was preparing and filing bankruptcy paperwork for clients. When you file bankruptcy, before your case can be discharged from bankruptcy court, you are required to complete a Financial Management Course so that hopefully you don’t end up back where you started in the next eight years. We constantly got information from different companies wanting us to plug their courses and recommend them to our clients. Then Dave Ramsey’s course crossed my desk. Why I took the time to look into his course, I don’t know. Normally the pamphlets were just put in a Resources folder for later, but God had much different plans.
Now this isn’t a plug for Dave Ramsey (although he’s amazing and I think everyone should take the course or at the very least, read his book), but it’s important because it started us on this journey. I feel like at this point, I need to make one more caveat- we are NOT financial experts. Staying on track is extremely hard. The first time we did Financial Peace University (FPU), we killed it. All of our credit card debt got paid off. We were saving money left and right. We only had one child, and we were on a roll. Then life happened, more kids were added to the mix. We got lazy with our intensity, let instant gratification take over, and one thing led to another. How I wish we’d been smarter with some of our finances the last few years! How I wish we’d been more diligent with our budget when our income was substantially higher! But I think we all have those wishes, right? I mean, I’m assuming if you’re reading this, you’re likely looking for a way to save money and get out of debt. The point is, I’m right there with you, Sister (or Brother for my dude-friends). The point is, we’ve made mistakes, even after completing FPU. The bigger point is, we got back up. We’re still fighting. We’re still chasing our debt-free dream. And if that’s you right now, if you’re feeling awful about how you’ve handled your money in the past, then I’m reaching out to you right now, pulling you up off the ground, telling you to dust off your big-kid britches and run towards that goal with all that you are!
Ok, pep talk- check. Let’s do this! The very first thing you need to do is get a budget set in place. I’m a crazy Excel nerd so I actually have a spreadsheet with formulas and bells and whistles, but if that’s not you, don’t make it harder than it needs to be! You do you, Boo! Write it out on a piece of notebook paper, but write it all down! It needs to include: all your sources of income and all your monthly expenses. I’m not going to go into intricate details on budgeting here. (If you all really want to know how I write our budget, feel free to reach out!) A couple things I suggest adding to your budget though that likely aren’t already in there- a Christmas fund (because y’all, that happens every year! Put a little bit away each month all year long so that you don’t go into debt when it happens!), fun money (which I recommend taking out in cash) and a small misc category (for the unexpected doctor co-pay, school club money, etc.).
When we decided to get super serious about paying off our debt again at the end of last year, Greg and I were ready to make the changes. We went through our budget. Anything that wasn’t absolutely necessary was cut out, and we began working on our debt snowball again. We already had a small emergency fund in place for the unexpected, so we didn’t need to worry about that at the time. Next step, getting the kids onboard. Now, we don’t buy our kids everything they want. (In fact, they earn allowance and if they don’t do their share around the house, they don’t get their money…you know, like real life.) But they were used to getting to go out to eat on a regular basis or getting ice cream or going to the movies. And then an amazing friend of mine (and fellow Dave Ramsey lover) shared the brilliant thing she was doing with her family- the Savings Plan Road Map!
As much I love the Debt Snowball of Dave Ramsey…Friends, it can get tiring. You’re on fire and you go, go, go! and then…it feels like it’s taking forever. So we break it down a little more. We celebrate every $1,000 we pay off. This also helps keep the kids onboard too! Note that this $1,000 is principal only! It does not include the accrued interest every month! This is where the Road Map comes in. Our road map includes paying off all of our debt (other than our house) and an emergency fund that would cover four months of expenses if something should happen. So yes, it’s huge. Yes, it’s a lot of money. But, it’s also very, very possible! Each space is $1,000 and when we reach it, the boys get to pick out a small celebration prize. This could be going out for ice cream, going swimming at the local community center or a trip to Sky Zone. We try to keep the cost of the celebration under $50. This visual reminder is perfect for our kids! “Mom, can we get Happy Meals for dinner?” “Remember how we’re working towards our next goal on our road map? If we get Happy Meals today, it’ll take us longer to get there, but when we hit our next goal, maybe Happy Meals can be our celebration prize!” (Please note, when I say this, I’m also mentally praying that McDonald’s is NOT the prize they pick!) The last time we hit our goal, the boys chose to go bowling.
We have these little celebrations along the way, but we also celebrate big time when we pay off a debt! When we actually pay off something on our debt snowball, the boys get to pick a bigger prize! This might be a night at a hotel swimming or going on a weekend trip somewhere or going to the big waterpark in the summer. The point is- celebrate ALL the victories! The big and the small! Or you’ll quickly lose momentum.
Here’s the other, perhaps more important, thing about including our boys on this mission: they are learning the value of money, service and hard work. They are watching their parents save for the things we want instead of just going out and buying on credit. They are watching their parents persevere in the midst of frustration. They are watching their parents work hard, pick-up extra hours here and there or a side job every now and then to bring in a little extra money. They are learning how to manage money and be good stewards with it just by participating in this adventure. They are learning that when you create a situation you no longer like in your life, it’s your responsibility to get out of it, not anyone else’s. They are watching as we pray when something comes up we weren’t expecting and seeing God provide just as He promised. Yes, we’re working on becoming debt-free so we aren’t slaves to the lender and have financial freedom, but the journey will bring about so much more than that!
Some last minute tips and tricks I’ve found that have helped immensely when it comes to staying on track with our budget:
- As I mentioned above, start a Christmas fund right now! Figure out how much you usually spend at Christmas time on gifts, baking, etc. Divide it by the number of months left in the year, and start putting that much aside each month! Is the number too high that you can’t afford to set aside that much? Guess what- you won’t be able to afford it at Christmas time either. So maybe this Christmas, things need to be scaled back a little bit. (The fund method also works for any annual expenses- car registrations, vet appointments, dental cleanings, etc.) Our Christmas fund also has birthday gifts/parties figured into the amount so we’re ready for those special days too.
- Utilize a Grocery Pick-up service. This has been huge for us in keeping our grocery budget in check! By ordering my groceries online, I can see my total before I get to the check-out. If it’s too high, I can go through my cart and take out things that can wait until next week. By picking-up, I don’t go into the store so I’m not tempted to purchase things not on the list or in the budget that week!
- Fun money. Friends, you need to have some sort of fun money worked into your budget. Here’s what happens if you don’t- you’re working hard, throwing money at debt like it’s going to get you backstage passes to Justin Timberlake, and then something comes along that stalls your progress. Medical bills show up that have to take some of the money meant for debt. Your kid grows two sizes in a month and needs new clothes you weren’t ready to purchase yet. Your hours get cut back at work and your monthly income decreases. Something will happen, you’ll get resentful because you haven’t had any extra money to go to a new movie or buy a bottle of wine…and then you blow a crap ton of money on something frivolous and end up in an even worse situation. Work fun money into your budget! Greg and I alternate fun money. One week, he gets $25. The next week, I get $25. That’s our money to spend on whatever we’d like. When it’s gone, it’s gone (that’s why I recommend getting it in cash).
- Hang your road map in a place where you and your kids will see it every day! This keeps it at the forefront of everyone’s mind and is a daily reminder of what you’re working towards.
These are the basics, Friends. I could go into so much more detail on so many things, but then this blog post would become a novel. If you have specific questions about anything- our budget, how we handle allowance for our kids, etc., please don’t hesitate to reach out! If we get enough questions about a specific thing, I can definitely look into making another post about it!
Until then, welcome to the journey, my Friend! It’s hard and long and harrowing. It requires grit and perseverance and determination. But you’ve got this! I know you can do it! You know the destination is worth it! If you need a pep talk, hit me up! If you need accountability, let me know! From one financial freedom pursuer to another- don’t give up! There’s a literal pot of gold at the end of this rainbow.