One step closer to being DEBT FREE!!!

Yep, you just read that title correctly!  With everything that has happened in the last 5 months I don’t think I would have ever imagined we could say that we only have one student loan left and it is small enough to say that I can see the huge light shining at the end of the tunnel! By the time 2013 rolls around, we will be DEBT FREE!!!!!!!!

How you might be wondering since….

1 - We just had Po’okela in August and everyone knows having a kid isn’t free.

2 - I just resigned from my teaching position and our family is now down to ONE income.

3 - Moving to another state.

4 - Rylan starting a new job.

5 - And that ONE income thing again. 

6 - Selling a house.

So here are a few of the answers to the statements above….

1 - When we found out we were expecting another little one, we put all out dumbing on debt on hold and put whatever “free” money we had left in our budget into a savings account. It’s a safety measure, because if something did happen to either myself or Po’okela we knew that would not have needed to stress so much about $$ because we had this extra emergency fund.  To help build this up, we pretending to put it in our budget the extra cost of paying for another little one in daycare (since I was going to be going back to work and didn’t want to have the SHOCK of that expense). Doing this helped build our emergency fund and pay for all our pre-Po’okela medical expenses and save up for possible future expenses that always pop up along the way. With doing this, we already had the medical bills paid and an extra emergency fund just incase anything happened during/after the delivery.  

2 - Living with one income isn’t easy, but when you have a written budget and don’t over spend it makes is so much easier.  Thankfully, when we first found out about this job opportunity we crunched the numbers to make sure we could live and continue to dump debt.  We knew that me resigning would eliminate the daycare expenses, which over half of my monthly paychecks were going to take care of and the other half of my check was going to go towards paying off and/or dumping debt.  Which means, we were already nearly living on Rylan’s paycheck while preparing for Po’okela.  Thankfully we can’t live without a written budget and I knew the fun money would go down, we still decided for me to resign.

3 - This was the tough one… Moving is hard.  Let alone the cost that go into the moving. Even more so moving to a place where you have never been.  Scary, but a huge Faith builder.  Thankfully parents helped in this department. My dad flew in from Hawaii to help drive a uhaul to our new place, which meant that we didn’t need to pay for movers. We just had the expenses that went with a uhaul, traveling, gas, hotel and food.  Parents are always the best because just as you are about to pay something, they swoop in and take care of it.  HUGE BLESSINGS!!!  However, thankfully we weren’t too stressed about the cost of moving because we had our BABY Emergency fund loaded and since Po’okela and I were healthy after the delivery (kind of, but completely different story) we knew we had something to fall back on when expenses came up that weren’t in the budget!  

4 - New jobs always have new twists and the anticipated first check to determine what our new budget will look like.  Also, going for a short time without an income can be stressful.  So here are some of the things that helped our peace of mind

1. We had that emergency fund. We really didn’t want to use it because we wanted it to go towards debt, but it was peace of mind knowing it was there.
2. Rylan always had our budget set up, so that the $$ we made for the current month went towards the following months budget.  So the we only had one month were we needed to dip a small amount out of the emergency fund to take care of the bills. 
3. Money always seems to arrive just when you need it! When I worked, I took my 9 month income and stretched it out over 12 months so during the summers I still got a paycheck.  Which means that my job still owed me some $$ for the months I was still employed.  And that check arrived in the month where we didn’t have a current income, giving us money to cover that month without dipping hugely into the emergency fund.
4. Again, having parents with you is always a HUGE BLESSING!! They helped out with things that you don’t think about when settling into a new place.  Well you know they are there, but you just make a wish list of things you would like and just get them when the money is there.  Thankfully they did so much of that prep stuff for our new place that saved us a ton of money and they always made sure we were fed well.  Pretty much they SPOILED US!! They made sure we were set with food that could last us a while, until we got our feet under us!

5 - When you are used to a certain amount of money coming in each month and then cutting that in half, it is scary.  However, we have been doing some kind of written budget each month since 4 months before we are married so it wasn’t that bad.  Thankfully we live in a rather small town. There aren’t many things to do and not very many places to go out to eat.  So that helps our budget tremendously!!!  

6 - This is the key to our successful payment of a student loan.  Once we sold our house, it freed up the $$ we put down on it.  We didn’t make any money on it since we were only in our house for 4 years, but we did get pretty darn close to breaking even with how much $$ we put down.  Since the $$ was a gift to help us buy it, we asked the givers of the $$ what they wanted us to do with it.  Originally the plan was to use some of it to pay off our car (which we did) and then put the money into some type of savings/investment to keep for when we are ready to purchase another house.  

Here’s the good stuff….

After doing some reading on savings interests and smart financial moves. Also, the giver of the $$ called to check with us with the previous lines findings.  In the long run we would maybe save a little more than what we were paying in interests rates on the student loan.  After talking with the giver of the money, we decided it would be a wiser choice for us to pay off one of our student loans and then aggressively attack our final student loan to get to being debt free!!!! 

So here is the plan for the final loan…

1 - We still have a nice nest of the baby emergency $$, so we will be putting that towards the loan.

2 - Rylan has decided to sell off the stocks he purchased in high school and put what he makes on that towards the student loan.

3 - We will move the $$ I would have normally been paying on the student loan we paid off, on to the last student loan (this comes from our monthly budget).

4 - See if we can squeeze out any $$ from our monthly budget to go towards it.

5 - We will be taking anything we get back on our tax return and dump it right onto the loan!!!

With all of these steps… We will FOR SURE be DEBT FREE before 2013!!!!!

This is so exciting because this has been a goal in the making of 6 years!! Yes we could have gotten here sooner and have made stupid mistakes, but its a learning experience! (I’ll blog about these in a future blog).

I’ll keep you posted!