Exciting baby news aside, there are several other big things going on with us right at the moment. October has been a spectacularly momentous month for us thus far (and it’s only the fifth!). Husband was awarded a bonus to accompany our monthly paycheck and we found ourselves (okay, well me mostly) completely wound up as to how to spend it.
In January of this year, we started Financial Peace University through our church. We’ve known about Dave Ramsey and FPU since we were married in 2006, as part of his debt reduction process was covered in our pre-marital counseling. I thought I’d written about this before, but I can’t seem to find any posts about it other than this one, so I guess you’re going to have to hear all about this all over again.
Husband and I started writing out a zero-out budget the very first month we were married. Okay, two weeks after we were married. In fact, that would be four years ago this month that we wrote out that first budget in a black spiral notebook filled with graph paper. As for our debt reduction, we started out with two credit cards, three student loans, and our wedding rings. Somewhere between then and now, we’ve paid off the wedding rings and one of the student loans and found ourselves a mortgage and a car payment. (This is after going through two free cars, one of which lit on fire, but that’s another story.)
Now, at the beginning of our marriage, we were focused on getting rid of debt. We didn’t have too many extraneous expenses and we were too focused on staying alive those first few years (trust me, I’m not exaggerating) to accrue much more debt. We paid off our wedding rings less than a year after we were married. But then, when I heard that our rent was going WAY up, I got house fever. We somehow *coughcoughimpropermortgagepracticesbybanksetceteracoughcough* managed to get approved for a mortgage and buy a house with a down payment less than $5000. Not really Dave Ramsey approved. But we moved anyway. And for those of you that own a house, you have a pretty good idea of what followed – tons of things broke, flooded, needed replacing or purchased in the first place, and we managed to just break even most of the time. God protected our financially immature little butts is more like it.
Fast forward to last January. We used our tax return to immediately build our baby emergency fund. Which was promptly depleted. And refilled arduously. And depleted again. And then husband’s brother got engaged and we realized we’d have to pay for a trip to Canada in a few months that would probably cost upwards of $3000. And we’d already committed to going to PAX two weeks after that. So we had a crash course in learning how to save. We had to put aside at least $300-$500 a month if we were going to be able to attend that wedding. And we did. And we survived just fine without that extra money to buy needless things with. I don’t think we would have been able to fully commit to the principles of FPU had husband’s brother not gotten engaged.
So when husband got that bonus, and us having just started to plan for having our first child in April, we were stuck. We have some extensive reflooring that needs to happen in our house before the baby comes in at least two different rooms of our house (preferably the entire house, but that’s just wishful thinking). We had the option to try and pay for that with our bonus, or put some/all of it in savings for the baby, or pay off our credit card. When I looked at what would be entailed in replacing the flooring, I had a mini meltdown. Husband talked me off the ledge and we decided to split the bonus. Half would go into savings for the baby and flooring, and the other half would pay off that first credit card.
We still have a long way to go. About $25000 in debt, not counting our house. Not counting what a baby will do to deplete the free cash we have to throw at our debt snowball in the coming months. But no matter what, we’re still committed to getting rid of that debt. Because someday I would like to move out of this neighborhood. And own a car that has four doors to easily get to a car seat instead of only two doors. And not have to send off over $200 each month to the Federal Government to pay back student loans. And someday that will happen.