The Great Debt Reduction

My husband has been out of work for sixteen and half months.  What a great eye opening experience this has been.  What we've learned:

1. We're stronger than we thought.
2. We can live on way less than we thought.
3. We have a problem with credit card usage.
4. We need to be smarter about budgeting.
5. We need to plan better for our future and possible financial catastrophes.

I'm not ready to disclose the amount of debt we're talking about, but suffice it to say it is A LOT.  A LOT.  The sad thing is we have consolidated our debt twice before and never manage to stick to the plan and pay it off; well we've paid off the debit consolidation loan, but we accrued other debt at the same time.  We always manage to keep racking up the debt.

We have lived with a lot less during these past sixteen and a half months, but unfortunately we have used the credit cards too, especially at Christmas.  I've justified some of the expenses as necessary, like new clothes because none of mine fit, or new running shoes because of my knee pain.  But we are faced with some huge problems if we don't make some changes.  We need to get things under control.

I have been working on our budget.  I love numbers and budgeting and accounting and I've always handled the finances in our family.  I'm really good at making a budget, but as a couple we are really bad at sticking to it.  But I get excited about the prospect of being debt free and last weekend I went to a women's retreat at our church and I feel like there was a reason God led me there.  I wasn't planning to go, but then I decided to attend and I'm so thankful I did.  One of the speakers has a family of 7 and lot of debt (hers seems more justifiable because some of it is medical bills and student loans, plus she's a stay at home mom with 5 kids and her husband is a teacher.)  Anyway, I really gained a lot of insight from this woman and I'm excited to kick the debt reduction into high gear.

One of our major expenses is groceries.  I cannot seem to get a handle on this expense.  I make a menu, I use a list, yet this expense category is completely out of hand!  Cash only.  That's how we're going to tackle it to start.  I am also going to start tracking what we're buying, everything from toilet paper to lettuce.  I want to know where the money is going.  I know there are savings to be had by using coupons and shopping sales; the girl at the church has been known to have a grocery bill of less than $300 for the month for her family of 7!  She's a master couponer.  Be she also looks at it like a job and doesn't mind spending a few hours a week on her planning and couponing.  I don't have that kind of time so right now I'm just going to focus more on sticking to the prepared lists and tracking what we're buying and we'll see how it goes, make changes as necessary.

As for the budget we are also being very honest and thorough about the categories we need to budget for.  Car tabs, car maintenance, fundraisers, clothing, etc....all these things have never been planned for in advance so when the come up we're not prepared.  I like preparedness so I have revamped our budget and itemized many things.  Each month we will set aside the allotted amount for each expense and keep track of it.  We will constantly evaluate and make sure we're tracking all we should.

There is a big unknown for all this which makes me a bit anxious and that is whether my husband finds a job or not.  The new budget is based on our income as it stands with my salary and his unemployment.  The reality is the unemployment could run out one of these days or he could find a job making less than unemployment pays before or after that happens.  Uncertainty is my enemy, but I'm trying to deny my tendency to always focus on the worst case scenario and just live in the now. Right now this is what we are working with and we'll cross the next bridge when it comes along.  In the meantime, we are going to live on our income and not our credit cards and reduce our debt one payment at a time.