Some blogs that I read up on from time to time have had posts discussing debt and poor credit lately. The ugly stuff. The stuff people are ashamed of and when the topic gets brought up they scan for the quickest exit from that conversation. It's uncomfortable, and I completely understand it. Dan and I have a pretty large amount of debt, maybe its small compared to other peoples, but the bottom line is, it's there, it's holding us back, and we want to get rid of it. Most of our debt comes from being poor. When Dan and I first got married, we had no savings, no jobs, and lived a rather transiate lifestyle, going where we thought would be the most fitting place for us. That included a jumbo move from Illinois to Arizona to be hippies in the desert, and then less than a year later, lose everything when we got stranded in Illinois for Dan's grandpa's funeral and had to start from scratch. If you look at our credit report it mainly consists of past due utilities, cell phone bills, and medical bills. It's ugly. It's all from an ugly time in our life that we had to hurt and struggle through in order to get to the places we are both at today.
I avoided our debt for the past year and a half or so because it was a painful reminder, "Oh yeah, I didn't pay that bill, because the water was going to be shut off and you need water to bathe a baby, or more importantly mix into formula..." or, "Oh yeah, I didn't pay that bill because we already got an emergency food box from the food bank this week and can't go back until next month."
I'm not ashamed of those times anymore though, sure they make me sad, but I'm done feeling sorry for myself. We did what we had to do to get by, without stealing or committing crimes, like many people living in poverty in the U.S., and if bad credit is all that came from it, and not losing a roof over our head, or something much worse, I'm okay with that.
We are more then okay now. We can fix this ugly aftermath and get our credit back on track. I was really encouraged after looking at Anna's blog about taking a Spending Fast and Dan and I talked and agreed it's the smartest way for us to get out of debt since we are renting very cheaply from his grandmother right now. Basically, a Spending Fast is when you quit spending all together and any money left from paying your absolute necessities goes to paying off your debt. Over the last few days we compiled an outline of our Spending Fast:
This is a list of what we have to spend money on;
Our utilities are included with our rent, so it's nice that isn't a seperate expense for us to have to pay.
We will be sharing one phone between us. Verizon Prepaid happens to be $50 a month for unlimited talk and text and web. Text and web isn't necessary, but the $50 plan being offered for unlimited is much cheaper then just a single line with a set amount of minutes and no add-on's.
Only food prepared at home, no more eating out or quick runs through a drive thru. Clipping coupons for any name brand items. Purchasing as many off brand items as possible. Limiting ourself to one shopping trip per week. No runs in between, if we run out of something midweek, we will have to make do with what is in the cupboards.
Only purchasing soap, body wash, shampoo, and conditioner, toothpaste, laundry detergent etc. when completely out. I tend to always pick some up when I see a buy one, get one free sale. Which sure saves us money, but buying a new bottle when I still have two completely full ones at home is not necessary and the Spending Fast focuses on buying or making purchases out of pure need.
*We cloth diaper and use washcloths for wipes, so it's a bonus to our Spending Fast to not have to purchase diapers or wipes!
We are fortunate to not have a car payment, so our only expense is for the auto insurance and gas. We will try to reduce our gas cost by 1) grocery shopping one day a week and 2) not going out to eat or impulse shopping when we get bored. We also enrolled in a reward program with the gas station we frequent that accumulates points every time you get gas and those go towards a reward of free gas. Not sure how long it takes to get your free gas, but eventually that would be nice! Also, Dan and I have the option of filling up at Sam's Club with his grandma's membership card. The gas prices between Sam's Club isn't always a big difference, but some days there is a ten cent difference and that can be a huge help in saving money.
Dan suffers from Chronic Joint Pain and Premature Arthritis from skateboarding injuries, so being able to purchase supplements like Glucosamine Sulfate and Castor Oil (used for Castor Oil packs on his knees to treat Baker Cysts) when he runs out, it is important to us to refill those supplements. Also being able to purchase vitamins for the babes and ourselves, Porter's Pulsatilla tablets, and medication and doctor's co-pays when illness arises and the the last two are needed is important.
Both of us being online students, having internet access is crucial. We debated cutting our service and using the library's free internet, but with two (soon to be three) children, you can't always slip away to the library, and have to do school work at odd times or late at night, when the library isn't open. We called our internet provider and have already saved some money by inquiring about current promotions and our internet will be 1/2 of the normal rate, for the next six months. Ca-ching!
We bank with our insurance company USAA. Being a USAA family, we were able to get discounted Credit Monitoring that is important for repairing our credit and being alerted of any newly reported debts. That was especially important to us because we have moved so much in four years, a lot of bills were never delivered to our current address at the time they became past due.
What we are not spending on/this is what we are cutting out:
-Eating out, even for special occasions.
In order to get control of our finances again and move on to financial security, we are taking the extreme route of cutting this luxury out all together so that we aren't tempted to give ourselves a pat on the back for something and go out to eat as a "reward".
Yes, Netflix. We have a Netflix membership, and although it's a major convenience at times, it's not worth the expense since I find myself watching shows for free on Hulu or catching up on my shows via the networks website like abc.com or cbs.com. Also, with a technology savvy husband, he normally finds what I want to watch on the internet pretty easily.
-Online & Impulse Buying.
No more online shopping, goodbye Etsy! Etsy will suck me in and I just make a list of what I want and then the spending occurs, and it's not necessary. We have what we need, plain and simple. It's going to be really hard not to pick up stuff when we feel like we have the extra money, but purging this undesirable habit from our lifestyle is setting us up for so much success when we are out of debt. So when the going gets tough and I really, really want to buy this one thing, or Dan comments on something being cool and I want to surprise him with it, I just have to picture where we want to be in the future, and like Anna (link site) said, it's not what we can't buy, it's what we can buy (in the future).
This all seems self explanatory, it is, but I wanted to post all of this as a way to keep myself accountable because the categories about are so engrained in our daily life, that I wanted to be able to reference this back and document our progress. Hopefully it inspires anyone who reads this to assess what they want in the future and make it attainable. Regardless of debt or bad credit. Sitting and feeling defeated isn't going to get us our dream house, but appreciating what we do have, purging what we don't need, and getting all these debts taken care of, will. No, we can't go apply for the dream house next month or even start looking at the houses and land that we want, but we are actively working towards that and a year or two from now...the possibilities are positively endless.
We committed to a one year Spending Fast and have already paid off a few debt accounts this week and organized payment arrangements with creditors. It feels really, really good. A personal goal for 2013 for me was to purge negativity from my life and this has helped tremendously. I am growing so much as a person and we are moving forward as a couple everyday, it's nice to know that the past will be in the past for good when this debt is gone, no more reoccurring thoughts and obsessions about the dark because it will finally be taken care of.
I'd love to hear your thoughts on the Spending Fast concept and if you've done something similar!