So, it’s been a while….

I guess you could say we got off track on the debt free plan. Life hit us, HARD. The good thing is we haven’t accumulated any new debt. The bad thing is we really haven’t made much headway, on our past debt, in the last 6.5 months. It sucks. It makes me pretty darn upset. I mean yeah, things come up that change your plans and you just gotta go with it. We will get stuff paid off eventually. BUT, I STILL WANT TO BE DEBT FREE BY 2020.

So, what can we do? Do we just settle and push back our debt free date? There has to be something else we can do. There has to be.

So we happen on this one day and my almost 8 year old son absolutely falls in LOVE with the idea….

16 year old builds tiny home to guarantee mortgage-free future

Our house is our biggest expense. So it makes sense that downsizing it might actually put us back on track. So we’ve been reading, researching, watching videos, trying to decide if we can actually make this happen for us. We have kids (3 +1 on the way) so it seems that it would tricky to find space for everyone. I don’t know. Maybe it is out of the question but, we need to do SOMETHING. We are not happy sitting here owing money on our house and on that stupid, stupid credit card. Whatever we do it is going to have to be drastic. I just don’t know how drastic at this point.

I guess it is time for more reading, more planning, and more ideas. We WILL be debt free by 2020, the question is how?

The secret of happiness, you see, is not found in seeking more, but in developing the capacity to enjoy less. -Socrates

 

We are a work in progress

We are a work in progress, ever changing, adapting as we walk down the path to our goal. Each step holds a new adventure for us.

As we were working on our garden path this weekend, I started thinking about how our plans have changed over the years. All the things we have been through have led us to this life, this path.

It seems that everyone wants to be debt free but not many are willing to make the hard cuts to make it happen. We ARE making those cuts every single day. We make very few purchases but, the ones that we do make are nearly always well thought out. I say “nearly” because we do have the occasional slip up. This is a hard path. It is not for everyone but it IS for us.

I am looking forward to the day that we pay the final payment on our credit card. We will briefly take a look back at the path that we’ve travelled and then dive headlong into paying off our house!!

As we lay the stones for our garden path I am reminded that even though we know where we want to be, our path is not set in stone. We have the freedom to deviate and change our path. As long as we keep our eyes on the goal we will get there!! :)

Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal.  
-
Friedrich Nietzsche

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The Plan

So I’m sure you are wondering how we plan to get out of debt and still continue to live a normal life. Well first off let me warn you, we are NOT normal. I have never wanted to be normal. Being different was my thing (ask anyone who knew my 11-year old, multicolor headband crocheting, self). Being different was cool. Umm yeah, we are very very insanely “cool”. ;)

STEP #1 – REDUCE SPENDING
In this step we will eliminate wasteful spending and become better stewards of the money we have. We started this step back in 2009 when we nearly lost our home. Our funds were extremely tight as it was and then my husband got an unexpected reduction in pay it pushed us over the edge. At this point we decided to stop using credit cards to stay afloat. Anything we could cut, we did. Losing the house just wasn’t an option for us neither was adding to our debt.

If all our debt was gone right now we would need roughly $1k/month to live, including food. The lower we can get this number the easier it will be to live without a guaranteed monthly income.

STEP #2 – INCREASE INCOME
I am a stay at home mom to three kids. I am also homeschooling my oldest. So this part will be tricky for me. I can’t realistically pull in a full time income but, I can come up with a few different income streams. My goal is to make a fairly steady $1000/month from home by January 2015. Add that to my husband working towards doubling his salary and we might just have a chance to make this happen.

STEP #3 – ELIMINATE DEBT
In this step we plan to attack our debt head on. We owe just about $16k in credit card debt (accumulated before 2009). We are planning to knock that out in less than a year. Then we will move on to our $20k equity loan. After that we will start paying down the mortgage on our home. We are still undecided as to if we will stay here long enough to pay it off or if we will sell it to buy our forever home. Either way, the goal is to not have a mortgage or any other debt by 2020.

STEP #4 – SAVE, SAVE, SAVE
This step will seem so much simpler when all the debt is gone. We want to save up enough money to cover our basic living expenses for 2-5 years. We would like our income streams to sustain us when my husband is no longer working but we don’t want to be stupidly optimistic that every month will work out perfectly. Having a fairly large savings (that will more than likely be invested in mutual funds) is our backup plan. If however the savings is ever low enough that it alone will not sustain us for two years, someone will have to start looking for a “real” job. That will also be our motivation to not touch the savings.

So that is a rough overview of our plan. There is so much more to it and I will go into more detail as this blog progresses. Be forewarned, I LOVE cooking and am VERY crafty. So there will be no shortage of pictures and posts about those two topics. :D

You can always amend a big plan, but you can never expand a little one. I don’t believe in little plans. I believe in plans big enough to meet a situation which we can’t possibly foresee now.
Harry S. Truman

What’s in a name?

I read in a book once that a rose by any other name would smell as sweet, but I’ve never been able to believe it. I don’t believe a rose WOULD be as nice if it was called a thistle or a skunk cabbage.
L.M. Montgomery, Anne of Green Gables

When my husband and I named our children, we thought long and hard. We believed that a good name is important. We wanted their names to have real meaning. I might go as far as to say that I believe that a person’s name helps shape them into the person that they will become.

When it came down to naming this blog I had no clue where to go with it. I knew that we wanted to be debt free by the year 2020 but, naming the blog that seemed so boring. Then it came to me:

Hindsight is always twenty-twenty.
Billy Wilder

Well duh, this blog isn’t just about the end goal; it’s about the journey too. How did we get here? Oh man, how did we get here? It was a fun ride for sure but had we only known where the road would lead we may have taken a different path. But who is to say that path would have been any better? Maybe we are where we are supposed to be. Maybe we learned the lessons we were supposed to learn. We are now ready to take the next step armed with knowledge from our younger days.  We still have quite a ways to go but, we WILL get there. 

We are made wise not by the recollection of our past, but by the responsibility for our future.
George Bernard Shaw

One last thought that just came to me, 20 plus 20 equals 40. I want to be debt free by forty.  How funny is that? I now have three reasons that “Debt free by 20/20″ is the perfect name for this blog. :)