Cutting Back

The desire to live debt free has been growing in my heart for some time.  It is something that seemed like a dream, not truly an attainable goal. 

At least that is how it seemed until we were introduced to Dave Ramsey and Financial Peace University.  

After our first session, we were definitely motivated to get rid of our student loan debt and be debt free.  Then we left class and started to second guess our decision to work on becoming debt free.  Should we tighten our budget to pay off loans that are at 3% and 4% or just continue to live as we are today?  As days went by and we prayed about the direction we needed to take with our budget, it became clear to us that we need to be good stewards with our finances. By maintaining the student loans, we were not being good stewards. 

In order to free up money in our budget to go towards paying off our student loans, we had to prioritize and make some decisions about our spending and our future goals.  It wasn't easy and there were many discussions (and there continue to be many discussions) about what we are willing to live without.  The signature FPU quote: "If you will live like no one else, later you can LIVE like no one else!"  is something we repeat daily. Multiple times each day.  It will take a change of mindset and a change of spending habits in order to meet our goal of becoming debt free.  Without a daily reminder of where we are headed, it could be easy to fall into old habits.

What are we doing to get on the road to financial freedom?

1. Cut up credit cards.  Two weeks ago, I cut up all our credit cards except one.  For the past six years we have paid our balance on our credit cards each month but having the credit card makes it easy to over spend. Good bye Gap card, good bye Old Navy, and the most painful good bye Target. I almost shed a tear or two over that one.  I have a major credit card but I am wavering about cutting it up as well. Statistics say that you spend 12-18% more by using a credit card than by paying with cash or a debt card (even if you pay the balance each month).  I am struggling a bit with not having a credit card but I will say I am leaning towards cutting this last one up too.

2. Canceled cable.  Right in the middle of football season, no more ESPN! OUCH!  

3. Canceled Netflix.  The convenience of having the movies delivered to home was wonderful but we just weren't using it enough to justify the payment. Now with Red Boxes everywhere, we can get a movie for $1 when we know we have time to watch one.

4. Canceled Vibe.  For about five years, we have been taking this liquid vitamin.  It is a great product but it is a cost which we felt we needed to give up until we are debt free. 

5. Use cash envelopes.  Even though we use the mvelopes online system, I felt that there were areas where we would overspend if we didn't use cash.  We use cash for dining out, entertainment, personal care, and part of our food/household (Target, Winco, Schwan's man). I can already see a decrease in spending in those areas. Spending cash hurts. It is really really painful.  I can see that I think more about purchases and stick to my list.   

6. Meal Planning.  I have done meal planning in some form over the years.  Now, I am sitting down at the beginning of the month, planning meals, and posting the menu in the kitchen.  When I make our menu I make a list of needed items and add them to my grocery list.   By sticking to the list and purchasing only what I truly need and not what I think I need or I might need in the future, we are saving on our grocery bill.  

7. College funding on hold.  While we are trying to get rid of debt, we have put funding our kids' college accounts on hold.  Once the debt is paid off we will begin contributing again and we will be able to contribute at a higher rate because our debt will be gone.

What we didn't give up:

1. TiVo.  If I don't run outside, I run on my elliptical machine. When I am on my elliptical machine I watch TV. There is only so much of the local news a girl can watch. The TiVo allows me to mindlessly watch a few shows while working out.  It also allows Lance and I to watch a show after the kids go to bed in record time -without commercials. We heart TiVo and were willing to give up something in another area in order to keep it.

2.  Schwan's Man.  I know this was an emotional decision. I have had the Schwan's man coming to my house since I was born.  I really don't remember a time without the Schwan's man. I have cut back significantly what I purchase from him but there are some things that are so good and not just the ice cream.

3. Internet.  No explanation needed!

4. Home phone.  We have discussed getting rid of our home phone numerous times.  But with young children in the house, I just don't feel comfortable not having a land line. I also don't like talking on a cell phone, I prefer a regular old phone.  For now, the land line stays.

I am interested to know if any of you have tips on saving money or things you have cut back on in order to save money.