Managing Money and Debts

Next up was to issue the flow of money.

We were poor every week after paycheck and couldn't figure out why. I built a spreadsheet and saw where our money was leaking. Now we have $500 a month to pay off debt.

It was important to both of us to have spending money, but we had to find a way to limit ourselves. So we set us a separate bank account for each of us, and we get $100 a week, anything extra left over and it goes towards our personal debt. This gives us motivation to try and spend less, as well as not allowing us to overspend.

The credit cards stay at home now, and are being paid off. We only use them for paying bills online, and then we immediately transfer funds to pay them off again.

Credit card debt is the absolute worse: highest interest rates and far too easy to use. I actually found a way to pay mine off completely by using some on my line of credit I had left from completing college. Now I can put my credit card payments towards my line of credit as well, creating a snowball effect that will speed up my debt repayment and shorten the path to a debt free life.

 We both have pretty hefty student loans, that will take between 10-15 years to pay off if we stick to minimum payments. We are leaving those loans as a last priority due to low interest rates. We will continue to make minimum payments on every loan, but they will be the last to receive the snowball effect. If all goes according to plan we should be able to be debt free within 8 years!

What do you do to manage your flow of cash, and to reduce your debts?