It’s Makeover Time!

With the new year and our financial goals that Raymonn and I have set for our family we decided that we needed some help from people who know what they are talking about with this kind of stuff. And so we signed up for the 30 day trial of Dave Ramsey’s My Total Money Makeover. I am familiar with Dave’s philosophy through church, a couple of books I’ve read, his radio show, etc… he has some different ideas but I love them. They make sense to me. And guess what? I’m not doing such a hot job all by myself so why not try? He certainly is not going to get me into more debt.

There are a series of baby steps (I won’t go into them all – feel free to read about them on his site) one of which included taking first stab at a budget. Now I’ve always attempted my own budgets via excel spreadsheet. Mint.com has been fabulous to show me what I’m spending and where and the average of Nebraska, the U.S., etc… but I needed something more. And so I took a stab at it  and for the first time didn’t just guess based on bills and then forgot about it until the beginning of the next month. I actually tracked every penny that left our bank accounts. I categorized it into SOMETHING and if there was nothing I created a new line to explain that the purchase was. The vacuum for example was a big purchase, I wanted to know that is where the money went.

The term “enlightenment” doesn’t even begin to describe what I learned. I believe the exact words that went through my head were, “#*&@#%*” (Lord forgive me). Wow. It was such a good exercise and I am incredibly glad I did it. They tell you that the first three months everyone is way off, and we were. But now I know where we overspent. I know to the penny what our budget it and the areas we struggle. I also know that we somehow have to get that dollar figure that comprises our monthly budget down. I am only okay w/ keeping it as it is if we take money from some areas and increase savings and/or investments. There are things I AM PROUD OF US FOR though and it is important to share the successes:

• “Starbucks” no longer shows up multiple times on our bank statements. In fact, I don’t think it showed up anywhere in January.
• “Chipotle” did not show up in our bank statements.
• “Barnes & Noble” did not show up in our bank statements.
• One of our Mint.com weekly summaries showed our highest payee that week: it was for our car payment, NOT restaurants or clothing stores.
• We are packing our lunches almost every day and eating in instead of eating out at lunch – this was a huge source of spending for us. Raymonn has made some sacrifices as he helps me more getting Prayse ready in the morning. He often works really late on freelance projects and is incredibly tired in the mornings and throughout his days. By helping get P ready to go so she can be to school by 8:00 and have breakfast, I am able to pack us lunches. Thank you honey!
• I am cooking at night for dinner! My Crockpot has gotten a workout, that’s for sure. But no longer are we swinging by Runza on the way home, or McDonalds, or heading to Lazlo’s or Old Chicago… we are eating at home, as a family. We have a better schedule and we spend time together!

The next step is to start working on our debt snowball – knock those suckers down one at a time. A few will take a chunk of change, we can’t help that our Homeowners Association chose this month to reside all of the condos… and I’m not gonna lie I am freaked out a bit, but excited at the same time. On the website there are a ton of people all working toward the same goal and chatting, sharing ideas, asking questions, and being brutally honest with each other. There is a level of accountability there. I’m thinking of adding a page to this blog to have my own accountability. I just have to think through b/c obviously I am not comfortable sharing everything (i.e., $$ amounts we are spending) but it would be nice to have a level of accountability, especially if anyone was willing to share in the journey together with me. If so I would definitely password protect the entire page – I’ll do that anyway just so random lurkers don’t access that information. Anyway, that is me and my tangent-driven mind not able to stay on track.

I would encourage anyone to read Joel Maxwell. He’s in my blogroll over to the right. I put him there because I read his story and it encouraged me. He was in way over his head ($500k debt with an annual income of $50k), people were pushing him to file for bankruptcy and he said no. He is now succesfully climing out (almost $300k in three years if memory serves me correctly). For goals like this we all need inspiration, encouragement, and support.