Bye Debt

AMA with @DebtFreeinSunnyCA

  • How come you sold your car, but not the truck? How did we decide to sell one, but not the other?

Josh and I were still dating when I decided to sell my car. He was supportive of getting out of debt, but wasn’t on board at that point. There was no way I was going to tell my boyfriend that he needed to sell his truck so we could get out of debt when we weren’t married! Haha. We got married a year after selling my car. Our amount of debt had gone down and selling the truck just didn’t make sense. Dave’s guidelines are that you can keep the car/truck if you can pay it off within two years and it’s not more than half of your income. We fall within those guidelines and we actually use the truck. Josh does a lot of fishing, spearfishing, and we camp, etc, so the truck gets a lot of use.

  • Once you become debt free, your dream is to sail around the world. Will you guys save a lot first or will you be able to work from the boat?

Our dream of quitting our jobs and going sailing is more of an early retirement plan.

  • Buy a house and pay it off ASAP
  • Buy a sail boat, move on to the sail boat, and rent out our paid for house
  • Use rental income to snowball the boat. We are both still working at this point
  • With a paid for house and sail boat, we’ll beef up our emergency funds and “cruising kitty”

Then we’ll quit our jobs and have our rental income pay for our adventures! Buying in California will be expensive, but the rental market is fantastic and will continue to increase.

  • What do you and your husband do for a living?

We both work in Information Technology. I’m an IT Security Analyst and Josh is a Systems Analyst.

  • What are you studying?

I’m studying Cyber Security. I’ll be done with my master’s degree in the next few months. So ready!

  • How do you keep up the motivation?

Every year we take Financial Peace University as a refresher. The great thing about FPU is once you have kit, you can take the class as many times as you want. My daily motivation comes from the Debt Free Community on Instagram. I love seeing others progress and tips for saving money/getting out of debt.

  • How did you get started on your debt free journey?

My grace period for my student loans was about to end. I did the math on how much my student loan payments were going to be and I wasn’t going to be able to afford the payment and my car payment. I had already read The Total Money Makeover and was on the plan a few years back, but fell off duo to personal circumstances. I knew exactly what I needed to do to clean up the mess. I reread The Total Money Makeover, enrolled in FPU, and immersed myself in everything budgeting/debt free related.

  • What’s been the hardest habit to break or the hardest thing to cut from the budget?

The hardest thing to cut from the budget is going out with friends all the time. We don’t have an eating out envelope, so anytime we want to go out to dinner we use our spending money. This results in us saying no because we don’t want to spend it! If we know an event is coming up, like a birthday, we’ll budget for dinner.

  • If you got invited to a dinner party/bbq and had to bring something, what would you make to bring with ingredients you already have at home?

Kraft mac and cheese. We don’t have a whole lot of food in the house since tomorrow is payday and we’re horrible at meal planning and prepping.

  • Have you gotten anyone else on board with Dave?

Yes! I’ve gotten 5 people on board. Josh, two family members, a friend, and a coworker. I think the trick is to just talk about the plan and your progress and not push people too much or tell them what they are doing wrong.

  • How much will your Emergency Fund be? How long will It take to save for? Will you be taking a break between 2 & 3 or will you push through?

Our six month emergency fund will be $22,000. I think it will take around 5 months to save depending on pay raises. We may take a paycheck or two off to celebrate and purchase a “debt free reward”, but other than that it will be straight to baby step 3. We will increase spending money and add a cash envelope for restaurants during baby step 3.

  • How often do you interact with family and friends? Do they play a part of your budget?

We see our friends 1-3 times per week and family every few weeks. Our friends and family know about our debt free journey, so they will give us notice on events that are coming up so we can budget for them. Usually we just hang out at our friend’s house and grill out, so it’s not expensive at all. If we go out, we use our spending money. We have this great little beer tap house right down the street from our place where you can pour your own beers and choose the amount you want. It’s seat yourself, so we could go out all night, have a great time with friends, and spend very little.

  • Do you have any hobbies and do you budget for them?

Josh would say I don’t! I like everything budgeting related and learning about filming/editing videos. Since I’m in school still, I feel like I shouldn’t have any hobbies and that all my time should be spent working on my degree. That will change when I’m done with school, but I don’t think I would add it into the budget. That’s what spending money is for!

  • Kind of an interesting question as we’re currently facing this dilemma. Would you pay for IVF with a loan before becoming debt free (putting you $10,000 more in debt), stop the debt snowball and save up, or wait till you are completely debt free to pay?

Josh and I don’t have a strong desire to have kids and we’re on the fence about having them. If we were in that situation, it would depend on how long we have left in our debt snowball and how strong the desire to have kids is – and my age. If the desire is strong and we have several years before being debt free, I think we would pause the snowball and save up. Either way, we would cash flow IVF and not take on any additional debt.

  • When you are debt free, no mortgage, what are you most excited to splurge on?

I’m most excited to splurge on a really nice sailboat! Sailing and spending months on remote islands is the dream.

  • What debt pay down methods do you use?

For most of our journey, we’ve used the debt snowball method where you pay the smallest balance and work your way up to the highest balance. We did move the credit cards out of order because my student loans are deferred and the cards had high interest rates. If we paid off the student loans first, there wouldn’t really be a snowball since my monthly payments are zero.

  • What is your discretionary budget? After you are debt free, do you intend on adjusting it?

Josh gets $200 in spending money a month and I do $100. I could have $200 a month if I wanted to, but I’m so gazelle that I just want to be out of debt. $200 is a lot of money each month for spending money, but I think it is completely worth it to have my spouse on board. This keeps him on the plan, for the most part ;), and focused on our goals. After we’re debt free, my spending money will go up. We may keep it at $200 each per month, but add a restaurants envelope so our money isn’t going towards food.

  • What do your friends and family say that you are so transparent with your debt free journey? Is this account just for your debt free journey? Do you have another Instagram account for just your personal life and your friends to see?

My friends and family haven’t really said anything about how transparent I am. Before I created this Instagram, I posted several debt free related things to my Facebook page. I felt like I was posting too much, annoying my friends, and speaking to the wrong crowd. I didn’t want it to seem like I was bragging when I was just sharing our journey. I started this Instagram and didn’t invite any of my friends that way only people who wanted to learn about getting out of debt followed me. I have a personal Instagram that I hardly use. The last time I posted on there was in August! I’d rather be looking at motivational posts all the time to keep focused.

  • Do you tithe? Is that part of the budget?

We are not religious, so we do not tithe. We donate to charity and it is part of the budget.

  • How did you get your other half to get on track with you? What would you suggest for others struggling with that? 

We were about a year and a half into dating when I decided to get out of debt. I tried to get Josh to go to Financial Peace University with me when I started, but he wasn’t having it. Over the course of a year I shared every detail about my journey with Josh. He even agreed to let me sell my car and only have his truck for a few months so I could save money. He was supportive, but never on board. Christmas the following year was coming and he asked me what I wanted. I told him that I didn’t want him to buy me anything. I just wanted 9 weeks of his time to go through FPU. The rest is history.

For others struggling to get their spouse on board, I would recommend sitting down and telling them how important this is to you. Focus on talking about your future dreams and what you want to accomplish. Then tie in how getting out of debt would allow you to reach your dreams. Playing The Dave Ramsey Show on YouTube around them while cleaning is a great way to plant the seed. If you can get your spouse to go to FPU, Dave will take care of the rest. Be careful not to hound them too much or they will resist even more. Find a happy medium and make the plan work for you.

You can follow Amanda on her Instagram: @DebtFreeInSunnyCA

 

 

 

 

 

 

 

 

 

 

 

 

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