Back in 2004, we started Dave Ramsey’s Financial Peace Class. After a bit more than 2 years of skrimping and saving and cutting back, we paid off all of our debt. We were debt freeeeeee. We even called Dave’s radio show and screamed. We kept working on his baby steps and didn’t even get all the way through the next one before we “fell off the wagon.” The plan was supposed to work like this: we take all the money we had been putting towards our debts and save up 3 to 6 months of expenses.
It worked for a little while. We got our savings up over 5 digits! But, it got too easy to start sniping off some money from the monthly savings. Grab some of it here, throw some there. Then we started using our credit card a bit again. We had this money available in the budget for this and just paid off the credit card each month. The expenses were not planned each month. They weren’t necessarily impulse buys, but just not planned.
More after the Jump
We ended up piddling away all this extra each month to eventually incorporating it into the budget and spending it. We then made the decision for the Mrs on the Door to stay home with our newborn. That would mean her income would be taken out of our pool o’ money and we would have to make it off my income. Well, it ended up that we were about $200-$300 short each month. That was quite a hit to my ego. It brought up all the “I can’t provide for my family” feelings and to make ends meet, we started pulling some cash out of savings each month.
Eventually, the Mrs on the Door decided that she would have to go back to work. This was hard for us. It was important to us for her to be home as much as possible with our child, and luckily she was able to get back with the same company she was with before, but in a different position that she was able to partly from home.
So now we had more income coming in, but still didn’t have the right mindset towards savings and, of course, life happened — a couple of times. So now we are restarting Financial Peace this weekend. It will be good to get a refresher course and get us back on the right path. We’ve already taken one fairly big (drastic?) step and hopefully it will keep us going in the right direction.
