As I Sat On The Beach Reflecting On The Journey,
we took to arrive at our dream vacation in Hawaii, I realized the road previously had a lot of twists and turns. We were drowning in debt, house poor, and just trying to stay above water before getting serious about our debt. Now we are sitting on one of the most beautiful beaches we could ever imagine. It started with a budget and quickly morphed into the new spending plan.
However, what we learned on our journey was living within our means, paying down debt and learning to save for rainy days was key to our financial success. It started with a budget and quickly morphed into the new spending plan.
We were drowning in debt, house poor, and just trying to stay above water before getting serious about our debt.
budgeting with the New Spending Plan
Over time obtaining better jobs, learning to make our money and investments work for us we were able to climb out of debt. The most important thing we learned was never to go into debt again. Everything you buy now you will pay for later. Living just for today can enslave all your tomorrows. Using the new spending plan, we were able to track every penny spent. This ensured that our budget would work for us.
Credit Card Debt is Big Business
Credit cards were designed for banks to make as much money as possible. That is why the credit card industry made nearly $104 billion in 2018 per CNBC.
This a staggering amount of money to be made from interest and fees. I have made every effort to never pay interest or fees once I paid off my credit card debt. If I do not have the money today to pay off the bill when it arrives in the mail, I do not hijack my tomorrows. Living and spending for today means saying no to impulse buying. It means having discipline and will power to say no to things we do not need. The spending plan allowed us to see how every single purchase would affect us in the next month to the next 12 months.
Eliminating the Car Note
However, there is no reason to not save for the things we want. For instance, it has always been my desire to no longer have a car note. So, I purchased my somewhat dream car and proceeded to save to pay it off as early as possible. Once I realized I had saved more than enough in my fully funded emergency fund. I was able to pay off my car note early. With the car note paid up it allowed me to reallocate funds to my retirement fund. I increased the contribution to 15% as suggested by various financial sources. Again, the new spending plan allowed us to see how this extra money could best work for us.
The Last Financial Hurdle for the Spending Plan
The budget: the new spending plan allowed us to save for a dream vacation to Hawaii. We can now begin working on our last financial debt. The mortgage. With retirement fast approaching it was time to tackle this last financial hurdle. It is our plan to pay off the mortgage within the next ten years. You can read more about this strategy in my blog Pay Off the Mortgage.
Check out my latest blog on Setting up a Budget for Beginners. Whether you need to start a joint budget or a single budget. Also, there is a free download to start your own budget when you sign up for my newsletter.
Let’s Budget, Spend and Live!