The start of a new year is when a lot of people resolve to get their financial houses in order. And we can certainly be counted among them.
Not that we’re just tackling this now. Over the past few months we’ve been working on sorting out our exact financial situation and trying out different budgeting strategies to figure out what we can stick with for the next year.
Our goal: eliminate all consumer debt by the end of 2009.
I debated a lot in my head about sharing hard numbers here on the internets. Finances are an inherently personal thing, and everyone has their own idea of what is a little, or a lot, or anything in between. Eventually I figured out what I’m comfortable sharing, and had a chat with Neil to make sure he’s on the same page.
In the end, I decided that sharing real numbers makes this all more real – both to you, gentle readers, and to me, since I’m partly using this year of blogging the budget to keep me accountable while I share what works for us, and any tricks and tips we learn along the way. I’m not going to go posting our bank records or anything, but a few numbers are key here.
Let’s start with the big one: Twenty Thousand Dollars. That’s what we started 2009 owing in consumer debt.
We haven’t actually added to that in the last 6 months or so. A lot of it is from old credit cards that had carried balances for too long, some is from wedding expenses, and a big chunk is from moving expenses a year ago. There is no “one big thing” we can point at as the root of the debt, and that’s part of the problem. It was always something we figured we could easily take care of in the next month or two. And then didn’t. Until we consolidated all of those lingering accounts and came out with the somewhat heart-stopping number above.
We’ve been saving up and paying cash for most everything we’ve bought since the wedding, kept up just fine with our other bills, but haven’t been so good at making any sort of substantial progress in paying down that existing debt.
Until now – and we’re going to do it by the end of the calendar year.
So now we’re paying down that debt first every month (a no-brainer, but surprisingly hard to realize sometimes) and our other fixed expenses, then only spending what’s truly left for discretionary things.
And how did we figure out what’s left? That’s for the next post.