Family, Finances

How We’re Tackling Debt!

After having our third child, my husband and I quickly realized that the way we were living wasn’t going to work financially. We had been renting for a while, not being able to buy a house because we just didn’t have the money for a down payment. The house we were renting was big, beautiful, had lots of room, had a great backyard, and we loved it. But we couldn’t afford it and we knew that. We made the wrong choice and did something we knew would hurt us in the long run. We stayed there for two years. We then realized we badly needed to get out of the debt that was hanging over our heads.Get Rid of Debt

 

We were living paycheck to paycheck. Struggling to pay the bills every month. Struggling to keep our kids in their extra curricular activities. Somehow we did though, BARELY. My husband and I look at each other sometimes in complete disbelief because we have no clue how we made the payments. God was definitely taking care of us.

We managed, but it caused us so much misery and stress in our lives. It was taking it’s toll on our marriage. We are also living off of one income. I’ve been a stay-at-home mom for 8 years now. But we both knew the real reason we were struggling was because we CHOSE to live in this nice house, with the nice cars, and we knew we didn’t need those things. We had to make a change quick before things went from bad to worse.

We went from living in a 2,600 sqft. house to moving into an apartment size 1,200 sqft. house, in a neighborhood where none of the houses have backyards or front yards. So basically an apartment. With three kids. And two very stressed parents. We have currently been living here for 10 months. We were dumb for spoiling ourselves and being selfish. But it’s time to get real and get over it.

I always tell myself, “Whatever I have that’s making me so mad and upset, somebody has it a lot worse than me! So shut up and get over it!” I may have to constantly remind myself of this, but it’s true. How can I complain about where we live? We have a roof over our heads and we are all safe in a very nice neighborhood. It may be tiny, cramped, squished, and make us feel claustrophobic, but it’s not THAT bad.

We are here now because we finally got smart and made a wise decision. I’m extremely proud of us for doing that. We are bettering the future for our kids. They may be cramped, but who cares? HOPEFULLY a year from now their parents will be debt free and able to buy a home for them!

Crazy 8 Sale On Now!

Our main goal right now is to eliminate the debt we have accrued over the years. We have about $12,000 left. Why am I telling you this? Because maybe you’re in the same spot. Maybe you’re thinking the same things about your family’s living situation. I want to get it out there and help as many people as I can.

Our Current Action Plan-

  • Reducing our rent by $600 a month by moving into a different rental. (The smaller house also reduced our PG&E bill and utilities bill.) Savings- $800
  • No leased vehicles. DUH. I don’t know why we made that decision in the past. Yes, it’s nice to have a new car every three years but you will always have a car payment! Find a car you love, buy it and after 5 years, no more payment! Wish we had been smarter. Savings- $200
  • No. More. Starbucks. Or at least cutting back! I bought a Venti Iced Skinny Caramel Macchitao every day. Do you realize how much that is a month? $4.95 x 30 = $148.50. $148.50 x 12 = $1,782.00 a YEAR. For coffee! WHAT THE CRAP. Stop doing it. Stop right now. Savings- $148
  • Use more coupons! This may seem like pennies saved, but it adds up! Savings $20-$50
  • Sell stuff we don’t use on Ebay. I’ve been doing this a lot with stuff I used to collect, mostly Disney Pins. We had a pretty bad addiction with them and with going to Disneyland (probably what added a lot to our debt). Also selling your old kids clothes that don’t fit anymore. Easy money. Savings $20-40
  • Canceling Cable. Here’s a biggie, we used to pay $120 a month for our cable and internet. Nowadays people are running towards Netflix and Hulu+, and so are we. We now pay $68 a month for all the TV we could ever want and internet. Savings- $52

Currently we are saving an average of $1,260 from what we were paying previously. That’s a huge difference! What a few little tweaks can do huh?

It’s a struggle right now, and we are still in it. But that debt doesn’t magically go away just because you move. You don’t instantly have a down payment or see a huge difference in your monthly payments. It takes time and you have to work at it. Now that we have our goals in mind, we are more motivated than ever. Living here, being squished a little bit, it’s worth it in the long run. We have to start thinking about the future. How about you guys? Have you payed off all of your debt? Did you take drastic measures? Have you been smart and completely stayed away from credit cards?

Here’s another great article on specific steps you can take to get rid of debt, from The Penny Hoarder- “How to Get Out of Debt”

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