The first step of the plan laid out before us was to get $1000 in an emergency fund and get it put in a place that we could not tap into it except for actual emergencies. Now while a thousand bucks does not seem like much, it can actually seem like climbing a mountain when you are so far in debt that you were 1 missed paycheck away from a total breakdown. Knowing that I did not have the extra money within the monthly income to pull the thousand out of it in a short period I decided to get my butt in gear and make some extra cash to help out. I decided that I really didn't need to have a huge knife collection or multiple guns just sitting in my cabinet so I took a few days and started setting up at my local flea market to try and sell off what I could to come up with the cash. Suprisingly enough (to me) it only took me two weekends of hitting the flea market and selling my stuff to put the money into the emergency fund without pulling it out of the already stretched monthly income.
Now the second step of his plan (and the step we are still working on slowly but surely) is called the Debt Snowball. This step requires you to list all of your bills I.E. credit cards, vehicles, hospital bills etc on a list from smallest to largest
then start paying all the extra money you can come up with on the smallest bill first. When we first started our snowball we did whatever we could to bring in a little extra cash and to cut corners in our budget to throw extra money to the top of our list and it really started to work for us. During this time I read a book called America's Cheapest Family
that gave me ways to cut corners in my grocery bills and utility bills. Within the first 6 months of starting the snowball we had knocked out 6 bills (all medical bills) that had been haunting us since the birth of our 2nd child who had some problems early on and had racked up some medical bills. Getting the first 6 items checked off we realized that this plan was working for us and we started working a little more overtime, doing whatever sidework we could get into, and setting up at the flea market when we found the time. The more we did, the more we watched come off of our list, within a year after starting the plan again we had paid off all of our medical bills, our best buy credit card, my wifes school loans and were now at a point where we could get the suburban fixed without breaking the bank to do it.Around 16 months in we slowed down on the debt snowball and (finally) took the Suburban in to get the transmission repaired and was able to pay the $2400 without falling back to the emergency fund. After getting the truck repaired we again sat down and looked at the budget and reassessed the debt snowball. We were making good headway down to just my school loan, the signature loan we had used to replace the heater and repair the truck, the suburban loan, some new medical bills and the house. Work had slowed some and we were not working the overtime we had been the previous year so we tackled the bills as best we could with just what we were making plus any extra we could make on the weekends but we stayed positive and in a few months after getting the suburban repaired we knocked out the medical bills again and paid down the suburban fast. Going into New Years 2010 we were on track to have our snowball down to just the house within 16 more months at the most. I paid the final payment on the suburban in January 2010 almost a year earlier than it should have been leaving us with just the school loans and the signature loan which were the 2 biggest besides the house.
Now being me, I cant ever do anything easy and I lose attention to what I am doing when it takes way to long to accomplish. At this point I saw that we only had the 2 bills left on the snowball and we were doing all right on money so I decided to try another venture to make extra cash instead of just the flea market. So I went out and purchased an exmark mower (on credit, dumb me)and a lawncare trailer thus pushing our snowball back up to 3 bills, but I had the plan to pay it off quickly doing lawn mowing and small lawncare work not realizing how hard it was to break into this field. Even still, I managed to get a few lawn jobs and it looked as if it was going to work out.
Things were almost running on cruise control at this point, that is until I got in an accident in May and totaled the paid off suburban on the way to a lawn care job no less. The insurance paid out a great amount on the truck considering the age of it, but me seeing the nice amount clouded my judgement on finding a new vehicle. They had given me more than enough to find a good running older base model F250 or chevy 2500 to continue doing the lawn business with and at first when I started looking that is what I was trying to find. A truck for 5-6k that I could pay cash for and not go back into debt but then it happened, I walked onto a lot and my son saw an F250 Harley Edition sitting there, he looked over and said "Daddy I want the monster truck" so I decided to check it out. It had all of the options I had been looking for and it had the power to tow the lawncare trailer. And here is where I made a rather big mistake, I assumed, I assumed that I would be able to pay the truck off just like I had the other bills because I had been with my comapny for the last 3 1/2 years and I assumed I would still be with my company. So I took the insurance check to the bank and I took part of it and paid off the mowing equipment and then I took $6k of it and used it as a down payment on the truck. My payment "only" $374 a month which was nothing I couldn't manage considering the money I was bringing home plus the side work.
Then came July 15th, and my assumption of a secure job turned into a huge mistake when I was walked out for telling a friend I was going to beat his ass. It was not a threat or even anything that he took serious but somebody within earshot decided it was enough for them to make a case against me. I was fired for threating a man who went to bat for me and told the management that he had not been threatened and it was just a joke between friends.
Now here's where the learning to be thrifty part comes in, having been fired for threatening an employee my unemployment was at first denied. So we went from having around $3500 a month after taxes coming in, to just over $1800 a month coming in to cover all of our bills, and the lawncare business, well it was dead due to a draught, no rain coming in to make my customers yards grow. Lucky for us we had set aside the emergency fund, had started building some savings and I had been stocking back a 401k through work (which I really hated to cash, but we wouldnt of survived without it) which I was able to cash out to cover not having an income. Knowing the job market was rough I started looking for ways to cut unnecessary spending out of our budget. Having more time to learn I started reading about saving money and ways to save money on groceries, bills, clothes and other stuff.
On the next few blogs I will start outlining the tools, books, blogs and other resources that I used to keep us afloat from July until October when my unemployment appeal was finally won and we started having some money coming in again.
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