Adventures of EJJE

Debt Free: Now What?

Friday, May 24, 2019

Once we went debt free, our focus was on funding baby step 3! Our goal for the FFEF (fully funded emergency fund) was to have at least 6 months of expenses saved or 6 months worth of John's pay saved. And just a few days ago.... WE ARE OFFICIALLY 100% FULLY FUNDED. Baby Step 3, check!

Thats how we feel about this accomplishment!!! ;) We still cant believe the rate we are going with this. I hope we dont lose this momentum we have goin for us. Anyway, in order to make the most of our money, we decided to open up a high-yield savings account vs leaving it in our money market savings. The highest one we found at the time we were searching was through Citizens Access with an APY of 2.35%. We've compared it with companies such as Ally, Barclays, and Discover (they do offer bonuses for signing up) and found Citizens to have the highest APY. We've been banking with them 2.5 months, and no issues yet.

It was easy to fall off track when we went debt free, cuz hey we have so much more money for ourselves to play with, right? And to be honest, we slipped a little. Since we just moved to a new house, we went a little over budget on "house furnishing" funds in April. BUT, we picked back up and reminded ourselves we have financial goals. Nothing has changed with the way I budget, except that instead of having the "debt category" we now have more room for "paying" ourselves in the savings categories. I made that plural because we plan on opening up multiple savings accounts, or mutual funds, or whatever investment thing John wants to venture on. He's been researching different ways to invest since we started our debt free journey. He does all that and relays the info to me and then we will decide together.

We originally was going to use the profit made from the house to get a mini van, because we felt it was more convenient for us with two little ones. We ultimately decided that the van can wait. If we buy a car in the future, we want to be able to pay for it up front vs taking out a car loan and racking up interest rates on it. Been there, done that, no thank you. So it's something we have to save up for, just like anything else we plan to buy. If we cant afford to pay cash up front for it, or know that we have enough money in our checking account to pay it in full, we're not buying it. This doesn't mean we've become this boring family who does nothing. We still enjoy ourselves, and go on trips, take the kids out, go to movies, eat out, the typical stuff, we just stick to a budget. We went on a 6 day Disney World Trip back in December for Tristan's birthday and in March we went on a 10 day trip to Spain. It was the first time out of the country as a family. In June, we plan on taking a trip to Legoland for Amelia's birthday. Since we've crushed our FFEF goal, we figured we'd celebrate by taking a family trip.

Disney World - December 2018

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Ronda, Spain - March 2019

With FFEF being fully funded, we have been focusing on saving up for our trip to the Philippines at the end of the year. My side of the family does family reunions there every few years and so far, we haven't had to miss any. We have no debts, baby step 3 is fully funded, so this was a definite yes. We're just waiting on John qualifying so he can put his leave request in. If we hadn't gone debt free this early on, I'm not sure if this trip to the Philippines would be possible for us.

Our goal after the Philippines trip, is to start putting money towards our future forever home (baby step 3b?) while also working on Baby Step 4. John was putting in 12% of his pay into his TSP, which is the military's version of a 401k. He has since increased it to 15% and as Ive mentioned before, we're looking into other places to invest our money in.

As for Baby Step 5 (Saving for kids College fund) - Since John is in the military, He will be sharing his GI Bill to be split for each kid. We've also been putting money in to each of their Savings account each month and is looking into College Savings Plans. Any monetary gifts they receive right now, also goes directly to their savings account.

Since we sold our house and is currently renting, Baby Step 6 doesn't apply to us. BUT we are saving up for a big downpayment for our future forever home. Our goal right now is to save up $100k in downpayment by the time John retires from the Navy. If we surpass that, then that would be amazing. Somewhere in between, we also plan on saving up for a new (used) family car - a bigger SUV or a minivan, we'll see.

And finally Baby Step 7 - Build wealth and give. This is the ultimate goal. We want to be able to build wealth and give back, eventually. We haven't gone this far in the plans yet. We've got a long way to go, but having a path to follow is a start. Remember these are all plans, and can or may be altered at some point down the road. We don't know what the future holds for us, but at least we have a lay out of what we hope to happen.

If you would have told me 10 months ago that we would be where we are at today, I'd just laugh and say "yeah right!" This is us, your average family of 4, with 1 source of stable income, earning 5 figures. IT IS POSSIBLE. The goal is to eventually make or have a net worth of 6 figures, but we'll cross that bridge when we get there. Also, when I say 1 stable income, its because Im self employed, so I don't have a fixed income, and I don't always make the same amount of money monthly. It could be more or less depending on how much or how little I work. So most of my income goes to savings, or under "family things" like trips.

A quick background on ourselves. I got my bachelors degree in Education. I was a long term substitute for 2 years and was getting ready to apply for full time positions when I found out I was pregnant. So instead of applying for a full-time permanent position, I stuck with subbing until I went on maternity leave. I ultimately made the decision to be a stay at home mom, ran my small photography business and planned on going back to working full time once Tristan was 1 years old. Well, I unexpectedly got pregnant with my second when Tristan was 10 months old, and Amelia came along. So my plans to go back to work have been on hold indefinitely. I did give it a shot for a few short months and worked for the City, and realized it just wasn't the right time. I do work from home as an online teacher. Its been a blessing and a great opportunity to be able to still teach and not worry about the cost of child care. I teach early in the morning for a few hours a day and I'm done by the time my kids are up! I also have plans on re-opening my business while in Charleston, we'll see where this goes.

As for John, he is a Chief in the US Navy and has been in 12 years. He joined straight out of high school and plans on staying in for 20 years. He also plans on getting his degree while in the military. He'll be around 38 when he retires and wants to get another career once he retires from the Navy. We're definitely not your 6 figure income family. If you've been hesitant about going on a debt free journey because you don't make a certain amount of money... Just go for it. Remember, you have nothing to lose and everything to gain.

debtfreejourney

We're DEBT FREE!!!

Wednesday, May 15, 2019

This blog post came sooner than we had expected! Our original end goal was September 2021!! But here we are, officially debt free!!!! 29 months early!! Its surreal! We paid off our last debt on April 24, 2018. We were very fortunate that things fell into place for us. It really does feel liberating, and now that we're on this end of the journey, we highly encourage all of you to get on some kind of debt free journey. It doesn't matter what method you do, or follow, just be on one. And go all in. Live frugally until you've reached your end goal, because its so worth it. As Dave Ramsey would say "Live like no one so [later] you can live like no one else." Having debt seems to be the norm. Everyone has it, or has had it. You got a car loan? You're in debt. Since getting on this journey, we have truly understood how it is to live below our means. It meant saying no to things that did not benefit our journey, being picky about the things we buy, and really plan ahead when it came to our finances. Most of this journey is about having a plan and sticking to it. Don't compare your journey to others because we all though all walk similar paths, its not the same situations. Do you, and do it with purpose. Prioritize what is important to you, and right now having the financial freedom was way more important than upgrading my car (which we almost did). The van can wait.

Seeing that "Congratulations" banner when I logged into my student loan account after the payment had been processed, felt really really good. Im sure you're curious to know, how we crushed baby step 2 in just 7 months? Consistency and determination. We set a budget and stuck with it. Also, the odds were in our favor. John re-enlisted back in January and with that reenlistment came a bonus. We used some of the bonus pay he got to pay down debt and using majority of the profit we made from selling our house to eventually pay it all off. Being able to pay everything off last month couldn't have come at a perfect time. John moving to a shore duty command and no longer on a ship, meant he lost sea pay... which meant a pay cut. All $500/month of it. Thats a lot, since we were already on a good rhythm with our budget. So we had to sit down and adjust the budget plan. We had to cut back in a lot of areas. He does eventually get instructor pay to make up for some of the money lost.

We're fortunate that the rate John has chosen in the military receives an SRB (re-enlistment bonus) every time he reenlists, and Uncle Sam was very very generous this time around. We always agreed that if we ever got that much amount of money that it would go directly to paying off debt first, long before we even started this journey. It has always been our agreement. We wanted to be sure to be smart about it this time around because last time he got a bonus, we used it on other things besides paying off debt. And we kick our selves in the butt for it every time we think about it. We could have been debt free a long long time ago! But hey, were humans and make stupid decisions sometimes.

John got half of his bonus up front and the other half will be payed out and divided in to 4 years. We decided to put half of what he got upfront towards debt, and saved the other half to put towards Baby Step 3 (FFEF -3-6 months Fully Funded Emergency Fund), which is sitting in a high-yield savings account. Why didn't we just pay it all off at once? Because we weren't comfortable putting it all towards debt and not having anything to fall back on. I know Dave's method is to go down each step, but we wanted some back up, aside from baby step 1 (small emergency fund, on Dave's method, this called for $1000, but we doubled it to $2500, just to be safe). We wanted to be sure we had funds for the unexpected things that come up in life, you know emergencies and that small emergency fund didn't make us feel super secure. We didn't want to gamble too much all at once.

By January we were at 45% paid off with debt (baby step 2) and 30% funded with baby step 3. We paid off the car loan & credit cards, leaving us with $29k of student loan debt left. Just a refresher, the debt we had consisted of ALL consumer debt (not mortgage): car loans, credit card and student loan debts was what we had. Consumer debt is ANYTHING and EVERYTHING that you owe money to, minus your mortgage. We started to put $1050/mo towards my student loan after paying off the credit card and car loans, along with whatever money we had left over each month. I didn't change the budget amount for what we put towards debt, so even though our cars and credit cards were paid off, I kept the budget the same and put all of it towards the student loan. This gave us a September 2021 end goal date. Our goal was always to try and pay it off sooner than 2021, but we never imagined for it to be this soon!

Fast forward to April! We sold our house and at asking price!! We decided to sell our house when John got new orders. We were thinking of putting it up for rent, but after several horrible stories we've heard about rental properties and horrible tenants, we just didn't want to deal with it at the moment. John does eventually want to buy a couple of houses (in the future) to use as rental properties, once we've saved up a good amount of money. We also decided to just rent a home in our new duty station since we will only be here for 3.5 years, and promised we wont be those horrible tenants we hear of! Haha! We will most likely continue renting until John retires in about 8 years. With the profit we made from selling the house, we were able to pay off my student loan and become DEBT FREE, while putting the rest of it in the FFEF, putting us at 85% funded by the end of April. Surreal!!

I used to only read stories of people being debt free, now here we are a part of that tribe, sharing our story. It all started one summer with Dave Ramsey's book and the drive to change our lifestyle. I hope that we at least get one person to think about their financial goals and journey. We all get wrapped up in wanting all the new gadgets, keeping up with the trends and keeping up with the Joneses that sometimes we get into so much debt for it. Its pretty human nature. Trying to fight the urge to splurge/shop was hard, but it was definitely a habit we had to break. We hope to pass this life lesson down to our kids so that they'll hopefully make better financial decisions. Its possible to have a good time, while being on a budget. Don't let the word "budget" scare you. Being on a budget doesn't have to restrict you, if you play it right, it actually has the opposite effect, at least for us. It is so liberating because the burden of having debt has been lifted. Being debt free is just the beginning. We've got so many more financial goals to accomplish.

Tune in and follow us along to see what we're up to now that we're debt free!

^^ Her shirt says "lets root for each other" & we're here to cheer for you with whatever journey you are on! :)

Debt Free Journey: the plan.

Monday, February 04, 2019

So just how do I plan out my budget monthly?

I start planning for the new month a week (sometimes a few day) before the current one ends. Unlike most people on a debt free journey, I do not use any spread sheets or forms or what have you, the only tool I am currently using to manage our budget is the Everydollar app. I know people have binders full of spreadsheets, forms, etc. Im not that excel savvy, so having the everydollar app has been very helpful. Plus! I didn't want to have to be printing things constantly. We only have the free version, but its more than enough for us. You can upgrade to be able to link your bank account, this is probably the easier route as it shows you in real-time what you've spent, but its $9.99/mo, isnt the point of this to save? So we opted for the free version and I just log on to our accounts via mobile apps or the website, and start punching in things I didnt get to right away. If I dont do this right away, I try to do it later that evening or within the next day, otherwise, I'd loose track!

Our monthly budget is broken down into different categories (these are pre-made in the everydollar app) like savings, housing, transportation, personal, lifestyle, insurance, health, debt. Then you can add the sub-categories that go under each one.

Here's a set of photos showing you how I broke it down (note: this is what works for us - you dont have to do it this way)

This is a quick overview on what I budget for monthly (the one with the orange highlight was just for this month) all the ones with yellow highlights is what we budget for monthly and the ones with nothing on them are just extra categories that I forget to delete. Lol! For insurance, I think these get taken out of John's pay before we even see it. So I'm not quite sure how much it goes in that category. I should look to see if its in his LES. But we do have life and health insurance. I'll also sometimes add subcategories based on what is happening for the month, and we happen to be moving this month so I decided to fund it and budget for it under PCS.

Under the savings category, Emergency Fund is our 3-6month EF and John's sav is our starter EF. I put money towards each one every month, putting more towards the actual Emergency Fund (which is now sitting in a HYSA - high yield savings account). I didn't feel content with just having a $1000 starter EF (as suggested by Dave Ramsey), so to be safe, I go ahead and fund it monthly, which right now we have $2k in plus the $2k cash that Ive saved. We've luckily only had to tap in to it once, which was the $800 vet visit.

The breakdown:

So here is what I do when I sit down to budget. I start budgeting for all the important stuff first like housing, monthly bills, and essentials. After all the important stuff, I budget for the savings category. Tristan and Amelia always gets the same amount each month, and the EF and "john sav" is usually $600 in EF and $200 in "john's sav" depending on if I need to fund for other things that month. But I usually like to keep it pretty consistent with both those amount. After all that, I go all the way down to debt. Before we paid everything else off, I had set amounts for each of the subcategories under debt based on minimum payments (plus whatever extra I had left over to pour into debt). But since everything else is paid off, I just left the budgeted amount for that category as is, and put it all to pay off our last debt, my larger amount Student Loan! The last thing I budget for is personal and lifestyle. And whatever we have left over after everything is funded, I'll go back and add that to the highest interest debt we have.

In the 5 months we've been doing this, Ive kept all amounts for each category pretty consistent. The set amounts I decided for personal and lifestyle was based from how we've managed to get by the past few months. When we first started I based it off calculations from how much we used to spend on them. Clothing used to be $200 (i know i know, crazy!!), entertainment used to be $250, groceries started off with $500, dining out was $400/$450 (yikes!), but we've since cut back on a lot of our spending habits after the first month or two, knowing we can survive for less. For example, clothing allowance monthly now is $120 for all four of us, entertainment is $120, groceries are $400 (including costco trips), dining out is $250. We don't always use them up, and if we don't, I'll roll the left over into debt and/or as part of "income" for the following month. We've also eliminated categories like Pax's grooming, John and Tristan's haircut because we do it at home now, and have saved us over $100/month, meaning more money towards paying for debt.

Also the great thing about every dollar app is you can copy what you have on your budget plan from the current month to the following month, and correct as you go. Since I do this, I just change the amounts and I'll add categories if I need it. But most of it I've copied and pasted from the very first month we started, which saves you time.

Cash System:

I often get asked how I do the cash envelope and if I withdraw our entire budget into cash. Answer is, NOPE! I can't because majority of our bills are paid online. I only use cash for certain categories and they are: gas, groceries, dining, toiletries, christmas/gifts, clothing, fun money, entertainment, misc... ok basically everything that isn't a bill. But here's my strategy with this, and its what worked for us. I will withdraw a certain amount the first half (first paycheck), and then a certain amount the second half. Once John's paycheck comes in, I will then total up how much cash I need to withdraw from each category, and then distribute it to each envelope (or in my case, tabbed dividers in my diy cash pouch). To keep track of cash flow, I have an index card for each of the dividers for my cash. I put the date it will be used for, the started budget, and then when I spend I track them and label it by date, store, and amount spent. For example, groceries, I'll pull out $200 of the $400 I budgeted for and that is what we use for that first 2 weeks of the month. If i spend $120 at commissary, I'll write down "02/03- Commissary - $120" then I'll write down how much is left over so I know how much I have left to spend in this category. So once that $200 is done, its done. I don't tap into any other categories to fund it. Certain categories like kids milk, toiletries, Paxybubs, I'll withdraw the entire amount in cash. There are also certain categories where I sometimes wont withdraw cash for in the second half of the month, since we do order stuff online and I'll just track it on the app. So this is where it might get complicating. How I keep track of this on the app is that I'll notate it as "in envelope" in the description for when you track your expense. But once I've done this, I no longer track my expense from this category in to the app, and instead track it on the index card. I know i know, this sounds complicating. It really isn't, at least not for me since I've been doing this for 5 months! Its also easier for me to explain in person because I can show it through the app than me trying to explain it word for word. Maybe I'll do a video? Jk, thats a lot of work! Lol!

As for our cash flow, I keep ALL receipts when I pay in cash because there are no other record of them. So does John. So if I happen to forget to track it down, I can refer back to the receipts, and if there aren't any, I lose my mind trying to figure out what happened with that money. Its happened before, and I sat there for 30 minutes trying to figure out what we did with $25 because I forgot to track it down and I had no receipt. Keeping track of your expenses is important, cuz a few little hiccups, could throw you off.

The cash system is sort of hard to explain as it is a system or method that took me at least two months to get used to and figure out what worked for us. I was never fond of carrying cash, but it really helps keep me in check and on track, because once its gone, its gone. I cant swipe, I mean I can but I've learned to resist the urge. There is no right or wrong way to doing this as long as you keep track and are on top of your expenses. I'm also sure there is a way to eliminate the cash system all together because a lot of people have done it by simply keeping track of all your expense on the money tracking apps like everydollar and youneedabudget. Maybe sometime in the future when our debt is paid off, I'll decide to eliminate cash system all together. Who knows. Right now, this is what's working for us.

This lifestyle change has felt so much more liberating. I no longer worry about whether or not we can pay our debts, our bills, groceries... because I know for a fact we can. I no longer wonder where our money goes at the end of the month, because I've already assigned each dollar a job. I used to panic when I'd see less that $200 in the checking account, but now when I see $60 in the checking account at day 29, it just means we've made every dollar work for us. I actually get excited when I see anything left over by day 30 because it means extra money towards debt and/or to roll over for the next month! So if budgeting intimidates you, I'm telling you right now, dont let it! It can be overwhelming, and hard, and a lot of work... but it is a big factor in accomplishing your debt free journey! Dont wait, go ahead and get started now! List your debts, figure out how you wanna tackle each one, and stick to that plan. Gazelle intensity!

babysteps

Debt Free Journey: Baby Steps!!

Monday, January 28, 2019

At first I was hesitant about posting this part of our lives for the public to see (& possibly judge us), but as I have been inspired by others, I hope to shed some light to at least one person. The debt free community on instagram has been an amazing motivator. It is filled with hundreds of brave people putting their struggles out there and has been amazing to watch how similar we all are. Similar, but not the same. So be careful and not to compare yourself to other peoples journey. Remember, we don't all have the same financial situations, always go with the plan that works best for you and yours! Plus! Putting it out there for the universe to see keeps us accountable (right, right?) This is also a way for me to keep track and have something to look back on and see how far we've gone. Also I had several people respond to my instagram message asking about what and how were tackling this debt free journey of ours. These are gonna be a series of blogs, so stay tuned, feel free to follow along! :)

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Since my motivation for all this was partly because of Dave Ramsey's book "Total Money Makeover" that I finally got to reading last summer, I decided I'd followed his methods, (while also making it our own): the Baby Steps. What are they?

Click Here to read more about it

Baby Step 1: Emergency Fund. I personally had $1500 in cash saved up already, and John had $1500 in his personal savings and we used that as our emergency fund, this is completely separate from our money market savings account. So if you have more than $1000 saved up to use for an emergency fund, you can skip straight to step 2! The first thing I did was draw out a possible budget plan that wasn't complicating to follow, as all other plans Ive tried in the past failed, and thats the last thing I wanted.

Just a heads up Step 2 will not work if you don't have a written budget plan. I know the word budget gets mistaken a lot. I used to think that having a budget was a restriction, when in fact its the total opposite. You see, you cant begin to addres your debt until you know how to make your money work for you. Having a budget plan just means YOU assign where your money goes, and not wonder where it went. After the budget plan was in place, I tackled the cash envelope system. This was new to me, as I was never fond of carrying cash around, but it was made a huge difference! Im sure one day, I'll figure out another method where I don't have to carry so much cash.

The key is having a written plan, along with some sacrifices. The right ones. What sacrifices are you willing to make to have financial freedom? Once you have a plan, plaster that shit all over your house as a reminder of that debt you owe. I have mine on my planner, hanging on a clipboard in my office, on my phone. We figured out what we can eliminate to have more money to work with. We switched cellphone providers, which also allowed us to cancel cable. We had cable because it was the only way (at that time) to get an unlimited plan on our cellphone service. So just by doing this, we saved over $100/mo. It wasn't after the first month that I was able to get a feel for which categories we needed to heavily cut back on. Eating out was at the top of that list. Impulse buying, ya know "instant gratification." Then groceries. I started to make weekly meal menus to make grocery shopping easier and not buying things we didn't need, and to prevent us from saying "i dont know what to cook/eat!" I've also sold so many things that were no longer useful to us, from baby items, household goods, furnitures, etc...on offer up and other selling social media apps, and have added that to our emergency funds. So by now, we have an EF of around $4k. I also like to shop around for second hand things, especially kids stuff. I found the kids bikes for Christmas for $10. Tristan's was a $10 12 inch Lightning McQueen bike (one of his favorite disney characters) in very good condition and I just cleaned it up. Amelia's 6volt battery powered trike was FREE. Thats right, free. Someone was giving it away. It was nice and clean and looked like it was barely used when I picked it up, and it was only used in the house. It was perfect. Where Im trying to get at this is, were trying to get the kids used to the idea that sometimes buying used is okay. Plus, at this age, they have no idea it was used. It was new to them, so they were excited nonetheless.

There is one thing we did not eliminate from our lifestyle and that is vacations/travel, and anything experience related. For example, the Disney World trip we gifted Tristan for his 3rd birthday. We funded that without using credit cards. Our total budget for that trip was $2500, we went under and went home with $300 in cash left over. We had a $1100 cash only budget for the 5 days we were there. The kids were only allowed to get up to 2 things each day, excluding food. Why? Because we were there to enjoy the parks, not to shop, as tempting as it was. I may do a separate blog post on how I did this. I also cant emphasize enough how much the cash envelope system has played a huge part on keeping us on track! Having a card to swipe can get tempting and easy, however, spending cash is harder to do because you physically see how much money you have left, and when you're down to that last $20 bill, you start to think about how you want to spend that last $20!

Baby Step 2: Pay off Debt!! Our starting debt is: $51, 795. We started this journey back in September of 2018 and is currently still on this step. We set a goal to pay it off by September 2021 (originally 2022, but we're gonna gazelle intensify this! lol). I used DR's debt snowball method at first. Click here for a better explanation. Basically you list ALL of your consumer debt (everything except your mortgage) from least to highest. Your goal is to pay off the least amount first, then roll over the amount you owed from there to the next debt once its paid off, then so on like a snowball, while also making minimum payments on all other debts.) Within the first month we paid off two credit cards and I was finally committed to paying my student loans (I was on an Income Driven Repayment plan that had $0.00 monthly and there were months were I couldn't.. ok, wouldn't pay it - silly me!)

Debt Snowball consisted of 7 consumer debts:

Milstar Card
Best Buy
Student Loan 1 (smaller amount)
John's CC
My CC
Kia Sorento
Student Loan 2 (larger amount)

You'll also hear of the Avalanche method, which can be found here, basically a stacking method which allows you to repay your debts in the shortest amount of time in which you pay less interest. So you pay off your highest interest debt first. I'll blog about this on another post as this is what we ended up using after the second month because John felt this method worked for our situation better.

Avalanche Method (this is how the list would look - listing from highest interest to lowest)

Best Buy Card
John's CC
My CC
Milstar Card
Kia Sorento
Student loan 1
Student loan 2

Since starting, we have paid off about 35% of our debt, but I'll tell you how on another blog post! The first month we started this was hard. I felt like Murphy knew our plan and said "im coming for ya!" Things that could go wrong, did. My $350 speeding ticket came in (it was reckless driving 83mph, whoops! definitely driving only up to 79mph, haha jk! sort of ;p) AND an $800 vet visit because Pax wasn't his usual self for a few days. I almost wanted to use my credit card to pay for the vet visit, but thats what the emergency funds are for right? You have it, use it. I cant emphasize enough the importance of having an emergency fund! It keeps you from using money you don't have! We had to later replace the $800 back in the emergency fund before continuing to make extra payments on debt. As for my ticket, I had to rework our budget that month to be able to pay it. It also didn't help that the holidays were around the corner. So to prevent myself from over spending, I avoided going out, especially to any retail stores with the exception of grocery trips to the market, this also saved us on gas.

Aside from having a plan, communication is important! John and I sit down atleast once a week, if not once every two weeks to discuss how were doing with the budget or where were at, or randomly while were sitting on the couch, in the car, at dinner. Luckily for me, he's a numbers kind of guy. I implement the plans, he does all the math and analytical stuff, and I guess thats what makes us a good team. Ha! I love that anytime he spends or wants to buy something he checks with me first to be sure it's ok. He could easily just go buy whatever he wants because after all, he is the breadwinner, but I love that he respects our journey and asks for my opinion.

Baby Step 3: 3-6 Month EF - Well we aren't quiet there yet, but we do have about 4.5 months funded. We obviously want to get to 6 months, so we're slowly getting there! Once we do, we're gonna start saving for funding other things! Btw, this is separate from the starter EF fund that we talked about in the beginning. I'll talk about how this was funded in another blog post.

Baby Step 4: Invest!!! John put about 10% of his earnings into his TSP (its the military's version of a 401k). He has also recently gotten into investing and stocks. I know how started an account with Robinhood, and other mumbo jumbos I dont quite understand! Thats his jam though, I know nothing of it. He also wants to start getting into rental properties (which this has been in his life plan since we first got married, and has been waiting for a good opportunity for it) We've also started looking into high yield savings account as well as certificates, since our Money Market APY isn't that high.

Baby Step 6: Pay Off House!!! - Ironically, we are selling our first home because we are relocating. Why not make it into a rental property? It'll be the last resort, as of now, we are set on selling it and hopefully using whatever we get to pay off the last of our debt. Once our debts are paid off, we'll be starting our "mortgage savings fund" for our forever home. We hope to pay the smallest monthly payment or none at all.

Baby Step 7: Give! - This we try to do when we have a lot of extras. Whether it is monetary, time, or extra stuff we have. But we hope to be able to help fund some charities in the future!

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Free Resources:

Dave Ramsey's website, click here. This is a given. I went on his website a lot to get ideas on how to budget.

Vertex's Debt Payoff Calculator, click here, is a good tool to start with to help you figure out your numbers.

NerdWallet's Debt Payoff Calculator is also a good tool! Click here. Its not an excel spreadsheet, and is completely automated in real-time. Its crazy to watch how much interest would accumulate if we continued to just pay the minimum. This is why John decided on the avalanche method vs the snowball. It saves us so much more in the long run because we pay off the highest interest rate loans!

I discovered the Everydollar app (click here) two weeks after we started from someone on Instagram, to later find out it was implemented to work with Dave Ramsey's zero-based budget plan method, which is the method I started with! "Give every dollar a job" you budget down to every dollar. Basically making your money work for you. It is following the zero-based budget, meaning your income minus your expenses should equal zero. What I love about the app is it does most of the math for you! I was originally going to do an excel spreadsheet, but lets be real, Im not that great with excel. It'll let you know if you've budget your income down to the last dollar. It'll also let you know if you're over or under. This has seriously made this whole budget planning so much easier! John has linked himself to my account so that he can keep up to date on our cash/money flow. We have the free version, and honestly it has been an amazing tool!

There is also another app that I have started using as well, called youneedabudget, (click here) which a lot of the debtfree instagramers I follow use. I'm still trying to figure out how to use it and once I do, I'll share with you guys! People like this because they've eliminated carrying cash with them, but quite frankly, I like the cash system, for now.

See there isn't one right way to doing this. You do your research and see what works/ will work for you. I basically went crazy with my research and then picked and choose which ones I liked, and implemented it to our plan.

I'm still a work in progress but it definitely feels good to finally figure out a budget that worked for us, its as easy as breathing now. I remember how confused I was the first month not being quite sure if we were going to make it work, but here we are on our 4 month, going into the 5th soon. There is still so much to learn!! So if you're feeling overwhelmed right now, its normal, I was there. But I promise you, if you're consistent and willing, it will work.

Please note that not everyones journey is the same. Find out what will work best for you and your family. Be consistent. Im writing about my journey to hopefully shed some light and motivate you. Im no financial advisor, FAR FROM IT. But take our journey, and make it your own. I have added several people on instagram in the debt free journey/debt free community and it has been such an inspiration and motivation for us because we know with hard work, consistency and drive.. financial freedom is possible. I wish you the very best on this journey of yours, and thank you for following along on ours! Stay tuned for more!

A list of the instagram handles I follow:

@debtfree.familytree

@debtkickinmom

@smartsncents

@thefinancialtwins

and of course:

@daveramsey

These were the first couple of people I followed when I started, Ive since grown that list and can't remember from the top of my head all the new ones I started following!

Debt Free: Now What?

We're DEBT FREE!!!

Debt Free Journey: the plan.

Debt Free Journey: Baby Steps!!

The Hugos

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