Friday, May 2, 2014

Invest In Your Dream - Grind Now - Shine Later

A HUGE part of deciding our career changes was finances. If you've followed my blog for a while you know that we have debt. After listening to the Dave Ramsey show avidly, I don't think we have a crazy high amount of debt. Don't get me's up there. But there are many more people who have been worse off than us and have made it to the light at the end of the tunnel. My goal with photography is to be able to do it for a living. That won't happen until all of this debt is gone. I will not leave my full time job until that happens. That decision also ensures that I don't get in too far over my head right in the beginning. I want to soak up as much as I can right now and that doesn't mean I need to spend thousands of dollars to get there. I've watched enough Shark Tank to know that growing slow and steady is the best way to go. Since we have made such good progress on our debt, I've decided that an update was in order. I think we've done a pretty good job so far and I'm ready to keep the momentum going!

With the help of my Debt Projections Worksheet, I calculated that we will be done with debt in March of 2016. Assuming that our income stays the same. Any increase helps and will start to reduce that time month by month. Where we used to feel pretty beat up about our finances, we now feel hopeful. I don't plan on taking money away from our debt payoff for photography. If we get an unexpected bonus (just got one actually) then I'll take a portion of it and put the rest towards debt. I'm planning on booking sessions soon for friends/family, for a very small fee. I'll stack whatever I can get until I can buy the next thing I need. It'll be a slow process, but one that I am happy with. I don't want to start a business in debt. Not when I know that it doesn't HAVE to be that way...regardless of what society tells you. The future is looking bright and I am excited!

I'm not quite ready to post our exact numbers (our total amount of debt). But I do want to keep holding us accountable for where we stand. Since January 1, 2014 we have paid off 17.34% of our debt! This debt includes 3 medical bills, 3 credit cards, a personal loan and my car loan. Yuck. People....I cannot STRESS to you how important it is to make sure you have the appropriate medical coverage. One little thing can rock your world. In our case it literally was a little thing....Chandler. We found out that there was no maternity coverage on our policy at the time. So they sent me paperwork, I filled it out and sent it back. Two days later I found out I was pregnant. There is a 6 month waiting period (or there was with my policy) when adding maternity coverage. Meaning that if you get pregnant within those 6 months it is not covered. The mix of emotions was surreal. Especially when I started calling around to different doctors offices to make an appointment. For one, some places won't take you with no insurance. Secondly, I'm sure a lot of you have no idea how much those appointments cost. If you've been pregnant then you know prenatal appointments last approximately 10-15 minutes. Unless you have a bunch of questions. Some places that I called said that the first appointment was $1,900. That is crazy! Long story short, I found a much more wallet-friendly option but most of the appointments still ended up on the credit card. Between that and some of the medical bills that come from Labor & Delivery, it racks up QUICK! Dental issues can do the same thing. MAKE SURE ALL OF YOUR BASES ARE COVERED!

We committed to making some big changes and holding each other responsible. My binge shopping definitely needs to get checked sometimes! Now we have not gone full on gazelle intensity. We do have a shopping budget of $100/month, a fast food budget of $50/month and a restaurant budget of $100/month. Is that money that could go towards paying off the debt? Yes. But in order to keep us motivated and keep us doing this for as long as we need, I think we need to have that. We might not keep it forever. Maybe challenge ourselves to a "no extra spending" budget for a month here and there (not a bad idea actually....just thought of that).

Have we been perfect on our budget? Nope. We have been over and under in different aspects. We had an almost $400 bill pop up. But guess what? It's been taken care of. No more cash advances...they were KILLING us. We have paid off 1 of the medical bills AND a credit card. We were lucky with the fact that the credit card with the highest APR% also had the lowest balance. We have NEVER not spent a dime of our tax refund. But this year when it posted in our account I paid off the credit card. It felt weird. Kinda sad. But our progress makes me super happy! I now know that having a high tax refund isn't doing us any favors. The goal is to actually break even. Get nothing back, pay nothing out. But that's a story for another time.