13.10.12

Day #88: Budget, Smudget.

As you know, I'm a broke biotch. I mean, part of my blog title is BROKE. Don't get me wrong, I make good money. I have a house. A car. All the "necessities", however I still live pay to pay check. Which SUCKS. No one feels comfortable in that situation. So, in my quest to better myself for my family I have been trying to find budget tips.

Before starting the following steps, make a budget plan. Here is an example of how I have mine set-up. I have my bills broken up into the first half of the month and second half of the month bills. My house payment is bi-weekly, so I have it broken into two payments. Now, this could be changing soon, as I have sent this to my mother and she is figuring out how we are doing. 


Debt Snowball by Dave Ramsey

First, accumulate $1,000 to keep as an emergency fund. This is easier said than done. Should I start selling random items from my house now?! Just kidding.

Second, list your debts in order starting with the smallest balance first. Ignore the interest rates, UNLESS you have two debts with the same-ish balance...then pay the higher interest rate debt first. Paying off the little debts first, gives you instant gratification and you are more likely to stick with the plan. 

So, with the snowball you are going to pay minimum payments on all your bills EXCEPT the smallest debt. According to Dave Ramsey, you are going to attack this bill with "gazelle intensity" until it's gone. Then add the minimum payment you were paying on this bill, to the second bill's payment. You do this each time, the purpose being you are adding more onto the next payment to pay off your debt (SNOWBALL...the snowball accumulates more and more snow as it rolls down the hill). 

Third, Do whatever you can to remind yourself that you DO NOT want this debt again. Post bills on the fridge. Write down how much you are saving by not paying that minimum payment a month. Whatever you need to do to keep you on track.

Here is a link to the debt snowball instructions and worksheet.

Hope this helped! I am hoping to use this plan to pay off some debt. I will be chronicling how we do with this plan. 


the Grant life



Until tomorrow,

Big, beautiful & broke... Chelsea

3 comments:

  1. I think what helps us is not having a house--I can't imagine being able to afford house payments! But one of these days we'll have to get one. Dave Ramsey's ideas are really good--my uncle and aunt started following his rules really hardcore a little while ago--even setting restrictions like, they couldn't buy any more ice cream until they paid off all their debt--and it's worked really good for them! They paid off something like 20,000 in debt in about a year, while having a baby at the same time!

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  2. We were in a rough spot a few years ago when the company my husband worked at went under and I used the snowball method once we got back on our feet. It was hard to apply that snowball sometimes but overall I'm glad we did it that way.

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  3. Good luck! We flirted with the debt snowball but never got that intense. Also, we have a minimum of four months of savings at all times... Took awhile it now I can sleep T night

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