How I’m Getting Financially Fit in 2016

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I plan to get fit in the new year – not by doing cardio and crunches, but by saving money and paying off debt! That’s right, I want to shed weight (in the form of debt), by getting financially fit in 2016!

How I'm getting financially fit in 2016

Debt payoff is not new for my husband and I. We have actually accomplished many great things financially in the last couple years.

I got rid of lot’s of stupid consumer debt that I racked up in my early twenties (mostly store credit cards). We worked very hard to get out from under some scary tax debt (both federal and state) that was a result of a very difficult time in my husband’s life before we met.

In 2014 I even made my last ever student loan payment! But we have more to accomplish and I want 2016 to be the year we get totally financially fit! I hope you’ll be inspired to join me!

How I’m getting Financially Fit in 2016

The Goals

I have big goals. Based on our circumstances, some may call them impossible. But I believe in setting big goals. I could set small, easy goals and achieve them, but then what? How much will my life have improved? I encourage you to dream big with me in hopes of making big changes in our lives!

Goal #1 –  Save Up $1,000 For a Baby Emergency Fund ASAP!

The ‘baby’ emergency fund is the first of 7 baby steps to financial freedom in Dave Ramsey’s Total Money Makeover (which I will mention again and again). I have set this goal numerous times in my life – but I have never reached it!

Here’s where I think I’ve made a mistake. I make an emergency fund category in my budget and set aside anywhere from $20-$35 per month. Eventually though, life happens, and that money is moved into a different budget category. So the emergency fund never happens. And when emergencies strike, we reach for a credit card.

The recommended way to set up an emergency fund is to do whatever it takes, and save the $1,000 up as quickly as possible. Extra payments to debt are on hold until the emergency fund is fully funded. If you have to use the emergency funds, you put extra debt payment on hold until you build it back up. So that’s the plan!

I hope to complete this goal by the end of January 2016. 

Goal #2 – Save Up $100 To Attend Financial Peace University

There is so much free information available to us online these days. But sometimes you need more. You need that human interaction to take things to the next level. You need people to bounce ideas off of and a group of like minded individuals to help keep you accountable.

Financial Peace University is a nine week financial education course that I would like to take with my husband. FPU is very popular and I have heard many success stories from couples who have gone through it. FPU is a biblically based course, but my husband and I are not Christian. However, I know that with an open mind, we could still greatly benefit from the course.  If you have other suggestions for financial courses, I’d love to hear them.

Why spend $100 on a course when we need to pay bills and pay off debt? Because we’ve never done it before. Isn’t the definition of insanity doing the same thing but expecting different results? We have been doing the same things for years, and our situation (though it ebbs and flows) has never gotten better. I think taking a course shows a high level of commitment to each other and to the debt free journey.

I hope to complete this goal by the end of February 2016.

Goal # 3 – Pay Off Our Debt Using a Debt Snowball

The debt snowball method, also credited to financial guru Dave Ramsey, involves listing your debts from smallest to largest. You pay off your smallest debt first, while maintaining minimum payments on all of your other debts. This helps build momentum and excitement in your debt payoff journey, because you will pay off that first debt quickly. When your first small debt is paid off, you take the money from that payment and roll it over to your next debt on the list. Your snowball grows bigger and eventually crushes your biggest debt!

I hope to complete this goal by the end of 2016. 

The Numbers (*as of 12/25/15)

Here they are in all their glory. Our debt totals (and lack of savings). It’s scary to share so openly, but I believe in being transparent and honest in hopes that I can inspire others with similar goals.

Consumer Debt (4 credit cards & cell phones) $15,444.24

Medical Debt (hospital, OB and neonatologists) $8,880.29

Car Loan/Lease (one of each) $48,690.48

We also have a mortgage, but I don’t plan on paying that off in 2016! Unless some kind of miracle occurs!

Total Debt  $73,015.01

Total Savings  $0

Did you believe me earlier when I said BIG goals?  $73,015.01 in debt to be paid off. To achieve this goal, we would need to pay approximately $6,084.58 per month for all of 2016, while living paycheck to paycheck. And that’s not accounting for interest! I refuse to get discouraged by these numbers. Instead I am focusing on how good it will feel to shed all the weight and stress of carrying around such debt!

The How

How did we get here? Not sticking to a budget (more on that below), overspending, relying too heavily on credit cards, losing my job (and half of our income) in February 2015, a job change for my husband, adding a family member (and medical debt along with him!), going from no car payments to two car payments, and buying our first house in July 2015.

Your circumstances might be similar to mine, or totally different. No matter how we got here, I believe we can all make better financial choices and achieve our goals.

The Why

2015 was a really hard year. Really, really hard. I don’t want to wake up in the morning anymore feeling afraid or worried. I don’t want to lose sleep at night due to stress-induced insomnia.

I want to save my marriage. Extreme financial stress has impacted our relationship in a negative way and it makes my heart hurt.

I want my children to grow up in a financially fit family where they are neither spoiled or deprived. I want them to learn from our experiences and not have to money struggles in their adult lives.

I want Christmas 2016 to be a happy, low stress time, very different from Christmas 2015.

I also don’t want to be average. The average American household carries $129,579 in debt!* No thank you! I want to be financially free!

How I'm getting financially fit in 2016

The Action Steps

Make More Money

We need more income monthly, but we also need extra money in order to reach the goals I laid out above.

We are in a very tight spot. This is full disclosure, full honesty time. As a stay at home mom caring for two young boys,  I need to bring in about an additional $1,000 – $1,200 monthly.

And making more than that will help us get out of debt faster. That will be no small feat. How will I accomplish this? Lot’s of ways! First, I plan on selling things we don’t need (books, clothes, a couch, a TV, a video game console, baby toys and gear, my ipad, my CALIA bag, a sewing machine, lamps, etc.). I will continue to work on my social media management business, and offering virtual assistant services  (check out my Hire Me page for more info).

I will get a part time job, I will babysit, I will do whatever it takes and so will my husband. There’s no other option!

Want to help? If you’re already planning to make a purchase through Amazon.com, consider using my affiliate link. There’s no extra cost to you, but I’ll earn a small commission.

Stick to a Tight Budget

We have technically had a budget for a long time! I started learning about money and budgeting while I was still single, and we have had a budget of some sort every month of our entire marriage.

But having a budget and sticking to a budget are two very different things! My budgets have been more along the lines of “wishful thinking.” When we spend all the money in a particular category, we don’t stop spending.

#budgetfail

That’s when the credit cards come out, and we’re officially living beyond our means. This is unsustainable behavior and has to stop! Which means we have to take the next action step …

Have Regular Family Budget Meetings

For us, I think they need to be weekly. I’m marking these on my google calendar and setting up reminders on my phone! It’s not fun to sit down and talk about money with your spouse. Especially when money is tight, and when you don’t agree on exactly how each penny should be spent! But we need to do this. We need to be fully conscious of every cent coming in and going out, and we need to be a team in the fight against debt.

Use A Price Book To Help Reduce Spending

Do you look at the price tag on every single item you buy? I sure don’t. There aren’t a lot of areas in our life where we can reduce spending (no Starbucks or happy hour habit, no vacations, no daycare costs, etc.) but there sure are a lot of things we buy.

I spent a few minutes listing out everything we will need to buy in the household or personal care categories in 2016 – everything from toilet paper and paper towels to diapers, wipes, shampoo, toothpaste and deodorant. I came up with over 90 items my family will need in 2016. Ninety!

Imagine if I educated myself on what the lowest possible price was for each of those items? Instead of just blindly picking an item off of a store shelf, I could potentially save my family tons of money by reducing my spending on these items!

Price books are most often used for grocery items. I just grabbed a small notebook and listed a few items on each page (alphabetically). I’ll carry the notebook every time I shop and will track a “price to beat” for each item. I’m excited by this money saving idea because I’m almost viewing it as a game!

Continue My Financial Education

One of the hardest parts of being frugal, or of paying off a large amount of debt is keeping your momentum going. Debt fatigue is a very real thing!

I not only want to educate myself about debt, credit, frugality, and investing, I also want to maintain a high level of motivation in 2016! To do this I plan on seeking out inspiration via podcasts and financial books. I already own Dave Ramsey’s Total Money Makeover and plan to re-read it fully and with fresh eyes in the new year.

I’ve listed a few other financial books from my amazon wishlist in the resources section below, as well as podcasts I have downloaded.

Resources

If you are striving for a financially fit 2016, some of the resources below should help you!

Books

I Will Teach You To Be Rich

MONEY: Master the Game

Mortgage Free: How To Pay Off Your Mortgage In Under Ten Years

Personal Finance That Doesn’t Suck

Rich Dad Poor Dad

The Millionaire Mind

The Total Money Makeover

Why Didn’t They Teach Me This In School?

Your Money Or Your Life

(Stay at home yogi is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com)

Articles

2015 American Household Credit Card Debt Study*

Grocery Budget Basics: Creating a Price Book

How to Make a Zero-Based Budget

How to Save $1,000 in One Month

How to Overcome Debt Fatigue

The 7 Baby Steps

Tools

Mint.com A free tool that will help you track your spending.

You Need A Budget Excellent budgeting software (not free but a great investment).

Every Dollar Dave Ramsey’s Free budgeting tool.

Financial Peace University

Podcasts 

Money Girl’s Quick And Dirty Tips For A Richer Life

The Dave Ramsey Show

The His & Her Money Show

You Need a Budget

Money Saving & Earning Apps 

Ebates (my referral link) Earn money back when you shop online. Note: If you sign up for Ebates today you will get a $10 bonus in the form of a giftcard!

Swagbucks (my referral link) Earn giftcards to help stretch your budget!

Wallapop (for selling your unwanted stuff locally) Read more here.

Apps that help you earn money shopping:

Receipt PalIbotta (my referral link – use it to sign up and we will both get $5!), & Receipt Hog.

New Year, New Momma! Join the challenge!

This blog post is a part of the inspiring New Year New Momma series on Momma Wants Java.

new year new momma 2016

New Year, New Momma is about achieving your goals and becoming a better you. It’s creating a community of support for those that want to start the new year on the right foot. Join the Instagram challenge and use the hashtag #newyearnewmomma to connect with others on their own journey. Please pay a visit to Momma Wants Java and these other participating bloggers to see more awesome posts! Healing Mama Remedies, Smart Mom Stuff, & Watch This Mom. And be sure to follow along on Instagram too!

I will update regularly on my progress throughout the year. How about you? Do you have financial goals for 2016? Please share them below in the comments so I can cheer you on! 🙂

Let’s all make 2016 our fittest year ever! Happy new year!

 

Epic Mommy Adventures
Feautured on Frugal Friday!

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61 Comments

  1. Erin, this plan sounds solid. I really appreciate you being open about this. So many people are afraid to talk about finances, but it’s a conversation that needs to be had. Also, I commend you on paying off your student loans. I haven’t even made a dent in mine, and that’s one of my goals for 2016.
    Healing Mama recently posted…New Year New Momma:Fitness RoutineMy Profile

    • Thanks Healing Mama! 🙂 I couldn’t believe it when I finally made that last student loan payment! I will have to share my tips for getting rid of that debt! You can do it! 🙂

  2. Great article that will definitely apply to most people! My last mat leave really hit us hard and we got into a financial boot camp by using Gail Vaz-Oxlade’s jars and budgeting system. It was not a fun situation. We now have money going into savings, a emergency fund and have paid off most of our debt! Do a google search of her name and her website should come up she is fantastic. She has a couple shows in Canada. Wishing you all the best in 2016!
    Tori Hamilton recently posted…Newborn Baby Resuscitation: An OB Nurse’s GuideMy Profile

    • Thanks Tori! I think I had heard of Gail before, but had forgotten her so thanks for the reminder! I will definitely check her out! 🙂

  3. Erin these are awesome goals and I love how you got very specific on how you will achieve them. We have a TON of student loans still, plus a roof loan for repairs that caught us unprepared last year, in addition to the mortgage and two car notes, so we’re pretty much needing to do something similar. I haven’t had a chance to work on my goals but I’m definitely not as organized as you to get this specific. This is very inspiring and I’m sure with that kind of motivation you’ll kick those goals to the finish line 🙂

    • Thanks Julie! Man, student loans are such a pain! I was thinking of sharing a post on how I got rid of mine. I felt like it would never happen! You’ll get there!

  4. Sounds like you have some great goals and a definite plan on how to accomplish it. That is a massive chunk of debt and I’ll be cheering you on! Have you tried using You Need A budget (YNAB)? It makes budgeting and saving so much easier!

    • I love YNAB Christina! But that falls into the category of having a budget but not sticking to the budget in my case! 🙂 At least YNAB shows me a clear record of all my money mistakes 😉

  5. Love this. am about to be out of school and I have been looking at ways now to start paying the loans off. I will be keeping an eye on this. Thank you for posting.

    • My best advice for student loans is to start paying them ASAP (don’t wait) and to pay extra whenever possible (even if it’s just a dollar or two!). You’ll get rid of them in no time, I promise!

  6. This is fantastic advice! I’ve never really had any real debt, but my partner does and it seems like it never goes away, great tips!

    • Thanks for reading Elanor! Yes, if you don’t attack debt, it will stick around forever! Good for you for avoiding it so far!

  7. These are all great ideas and I love the one about the debt snowball…we should try that one ourselves! Thanks so much for sharing at Share The Wealth Sunday!
    xoxo
    Lisa

    • Thanks Lisa! 🙂 I used the snowball method before (in my 20’s) to get rid of some credit cards and my student loans. It really works!

  8. Good luck with you mission, it sounds like you have a great plan. A couple of tips from me –

    1. If you can, do your food shop online. It’s easier to compare prices, you’ll be less likely to put anything in your basket you don’t need and you can keep an eye on how much you are spending as you go.

    2. Use cashback sites for any purchases, you’ll get money back on lots of things.

    I hope you meet your goal.

    Sally @ Life Loving
    #LifeLovingLinkie
    Life Loving recently posted…Top 10 of 2015My Profile

    • great tips Sally! I always use ebates when shopping online, but I don’t shop online very often! Food shopping online is something I haven’t tried yet. It might not be common in my area, but I’ll have to look into it. Happy new year! 🙂

  9. Erin, I love that this is your goal for the year. As long as you do some of it, hopefully all of it, you still win. Your husband wins, your kids win. This isn’t one of those icky New Year’s Resolutions that make you feel like a failure, the results are going to keep giving you and your family dividends for years to come! Excited for you and cheering you on!!!!

    • Thanks Nikki, you’re one of the best cheerleaders out there! And this goal really is for my family and our long term wealth, health and happiness!

  10. We did Financial Peace University in 2009 and have never looked back! We weren’t in major financial distress but always looking to get better and it has improved our finances and even our relationship. We now can have a conversation about money without someone (i..e. ME!) leaving in tears.
    We’ve been faithful Ramsey followers since and have attended other seminars and conferences he does. It love Dave! This is a great plan and it looks like you have intensity and drive to reach your goals. Best of luck!

  11. You have some great goals for 2016. I really like the idea of making a list of all the household needs for the year and those monthly budget recap meetings! I like reading posts which inspire me and this one did!
    Shirley Wood recently posted…4 Simple Morning Routine Hacks For Commuters & Everyone Else TooMy Profile

    • The regular money meetings are going to be tough, but I’m determined to have them and I know they will keep us on track. Thanks for reading Shirley! 🙂

  12. Good luck with your finances this coming year. It is always smart to have money set aside for the unexpected.
    maria @closetohome recently posted…3 Awesome Math CraftsMy Profile

  13. I am in a similar position and have big plans, too! We have a similar debt number and want to rid ourselves of it quickly as we want to buy a home. After years of renting as a military family, we are committed to investing in property. I have a similar number of what I earn monthly, as well.. Some days, it really helps to know you’re not alone!
    I am going to start the price book. That is really smart!
    I wish you prosperity in 2016!
    🙂
    Traci

  14. Good luck on your journey. It is hard to get financially fit, trust me I know. You are young and that is a good thing. You have time to get out of debt. Doing this for your family and marriage is such a good reason and I know that it will keep you on track. You are brave to do this and I have faith in you.

  15. This sounds like an amazing plan! I’m working on our budget plan this weekend to focus on paying off our debt. It’s not an easy journey by any means but in the end it will all be worth it!

  16. These are great resources. It’s so easy to get into trouble with credit cards, I know this from experience. Looks like you have a great plan set up, though, and determination which is probably the most important thing.
    Crystal recently posted…You’re A-MAZE-ing! Free Printable CardsMy Profile

  17. This is great how you laid is all out and have made goals to get out of debt. It can be suffocating to have so much debt (I know), and it feels so good when it starts to get paid off. It can be really challenging. We are still working on ours, but will be there in a couple of years and I am so excited. Sacrifice is worth it.

  18. This is awesome and I love how honest, transparent and real you’ve been here.

    I love your strategies and I can’t wait to hear an update!

    Thanks for sharing (and for linking up to the #SHINEbloghop).

    Wishing you a lovely day.
    xoxo
    Jennifer | The Deliberate Mom recently posted…The Parenting Resolution: Make 2016 the Best Year!My Profile

  19. Our big fat goal is to get a good chunk of debt paid off, too. I love how you provide so many great resources here! I think FPU is a great course, and well worth the price. I totally recommend it.

  20. Thanks so much for being transparent. I too had a tough 2015 (and 2014) with a job loss, job change, and then a big pay cut. This is a great plan and I’m rooting for you and your husband!

  21. Such important goals and information! I am checking out ebates from your link, and if I have any amazon shopping to do I’ll try to use your link too… glad to support your progress! 🙂 Excited to see your financial journey in 2016… you can do this!!

    Thanks for linking up at Friday Frivolity!! Hoping to see you again this weekend. 😀
    Sarah Eliza @ devastateboredom recently posted…Crazy Stuff I’ve Seen in Texas: Freaky Signs Edition – The Skin Art Gallery, Legal Drug Store, & Cajun Fried Turkeys in a Warehouse!My Profile

  22. I’m also budgeting! I’m trying the EveryDollar app – I’ll be cheering you on while I’m also doing the same!
    Angela @ Setting My Intention recently posted…10 Lessons Learned after a Year of DeclutteringMy Profile

  23. Love this, my husband and I have been using every dollar a lot recently (check out our post on it for more info http://savingscotts.blogspot.co.uk/2016/01/every-dollar-review.html). Best of luck in your journey your off to a great start already.

  24. Erin this is a sound plan and I’m sure you will achieve because you have thought about it, planned it and written it down. Great advice to others want to be debt free. Thanks for sharing with us at #Overthemoon
    sue recently posted…Over the Moon Link Up #8My Profile

  25. I look forward to following and cheering you on in 2016! I have a lot of the same whys. Before my husband and I took out a home equity loan to consolidate and pay off our credit card debt ($60K – yeeks!), I was waking up in the middle of the night terrified. We still have to pay off the loan, but having a much lower interest rate and the cards paid off helped a lot with my mental health (and sleep!).

  26. I truly believe that there are few cases when debt is absolutely necessary, and when handled in a responsible way it is a blessing to have that option. However when debt controls your life, and we go into debt in a reckless way, it absolutely wrong! — Great article Erin… thank you so much for sharing!
    ►JoyfulSavings recently posted this saving-tip article: “Stop buying Fabric Refresher & Dryer sheets FOREVER”!

  27. Great goals! We’re a quarter into the year…I hope things are going well!

    • I’ll be posting a quarterly review in just a few days! 🙂 Trying to keep on top of all my goals this year and keep the momentum moving!

  28. These are some awesome goals! It sounds like you had really thought things through and made a good, solid plan. After 3 months, I hope things are rolling along smoothly for you!

  29. Sounds like a solid plan! I’d love to do FPU, never even though of doing it with my husband. I think that may be the key…!
    Jenn Peters recently posted…10 Best Easter Movies To Watch This WeekendMy Profile

  30. OMG….It’s so nice to find another blogger going through the same deal we are. Although we don’t have nearly as much debt (TG). This post made me happy to see others on the same path to financial strength and wellness.

  31. Erin you have such a well laid out plan and have combined it with great resources such as the baby steps and educational podcasts. I did the same thing when I started my debt journey. I too share your powerful “why” , I want my family to enjoy a zero stress environment and have the resources to create memories and experiences for my family. I have no doubt you will destroy your goals. I did have one question, what is your household income? 47k in car debt sticks out in your situation. You can email me ronprestonjr@gmail.com if you rather not disclose publicly.

    • I love that WHY Ron! 🙂 Families are such good motivators. Our car payments are definitely too high for our income. It’s an issue my spouse and I don’t see eye to eye on. I don’t like that we are leasing a car and I would rather drive an older, paid off vehicle!

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