Monday, August 17, 2009

Lockdown Budget: Obliterating Twelve Thousand Dollars in Debt in Three Months

Back in January of 2008, the Baboo and I sat down in anticipation of our marriage to look at what our life cost and the net effect of combining our incomes and expenses. That fateful day, we determined we were well into the five figures of debt, and our income did not exactly cover our expenses. In other words, we were in the red and majorly upside down. Through a concerted effort to tighten our belts and a series of events that I can only describe as divine intervention, we were able to eliminate some major expenses, bump our tithing up to ten percent of our income, and eliminate about sixteen thousand dollars worth of debt in about ten months' time.

After that ten months, we were emotionally exhausted from denying ourselves certain small luxuries; and so, we bumped up the amount in some budget categories and began to coast somewhat. We also had a period of delayed income for me, and some large expenses that all came due at once.

But as usual, God decided to get our attention. We'd been largely immune from the vagaries of the souring economy, so it was a surprise to us to find that the monthly minimum on one of the three remaining credit cards we have balances on had doubled. Doubled. And at that moment, we both realized that as long as we have credit card debt, we are not in control of our money.

So we tried to figure out a solution, but nothing really seemed to click until I said "if we could just live on your income and throw all mine at the debt, I bet we could get 2/3 paid off by December." And inspired by that, we sat down with the Excel spreadsheet that tells our money where to go and zeroed out all non-necessary budget items to see if we could make it happen.

We could, it turns out. And if we did it for three months, we could in fact pay off approximately twelve thousand dollars in debt by December 1, 2009. So, we agreed we would do it. For three months, we are funding nothing in the budget categories except things which keep body and soul together and keep us working. We are still tithing 10 percent; we are paying the mortgage and all housing related bills, and keeping the food and gas budgets the same. We do have some cash available from August's budget buckets which we will stretch. We will also fund any necessities for the kids (snow boots, for example) as they come up.

But honestly, for the rest of it? We have a ton of health and beauty aids, and stuff -- just stuff -- that we can use up. We have a ton of house projects to finish. We have a park 3 blocks away, and a library. As long as I have Alterra coffee in the morning, I'm good, and that comes out of the food budget. Baboo has his treadmill and his fishing pole and fishing license. Hiking is free. Bike rides at the lake are free. Walks in the park are free. And we have noticed that when we follow God radically -- when we listen to His will for us -- things have a way of working out. We can do this, with the help of God.

So come along for the ride. It should be fun, and I look forward to being able to tell Chase to kiss off by December 1. That would make a fabulous birthday present.

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