Seeking to Understand

Melody and I have been on the Dave Ramsey plan for about five months and it has been great. We’ve had a lot of financial pains and some expenses of our own doing - but each month we’ve paid down on debt, preserved our emergency fund (or quickly built it back after just a couple weeks), and have fallen into the comfortable habit of living within a budget.

Tonight I thought it’d be fun to go back through our last five budgets and add up the total amount we’ve paid down our debts in that timeframe to get an idea of our overall progress. (It’s easy to lose sight of the big picture when you’re focusing on the tiny daily details.) Oddly, even though I’m a nerdy programmer geek, I’ve been doing our budget in a simple text file and adding/subtracting all of the numbers manually. No fancy spreadsheets for me! I find this method a lot more satisfying somehow - it almost makes me feel more connected to the numbers then it would if I changed one thing and the entire page instantly refreshed with updated figures. I give it good odds that someday in the future I’ll automate this somehow - either by writing a custom web app that does things the way I want to or resorting to some kind of spreadsheet - but at this point I just don’t feel the need. With a text file I have ultimate freedom in how I record, manage, and annotate my numbers that sometimes gets lost in structured applications. (You might say this is a bit like static vs. dynamic typing in programming languages.. but that’s probably just my inner geek coming out…) I just like the flexibility, I guess. Or maybe I just like pain. Hard to say…

Anyway… in the end, after adding everything up, we’ve paid down a whopping $9,500.00 in debt in just 5 months. That’s almost $2,000/month - which is stunning. It’s especially surprising given that we bought a house and moved in the middle of this along with all the plumbing and car disasters. Even more encouraging is that Melody is getting a raise as of September - and not just a small one but a very substantial one (relative to what she was making before, anyway). If things go according to plan we’re not going to modify our lifestyle at all which means that her increased income is just going to result in an increased debt reduction pace. Most excellent!

We’d love to be out of debt (except for the house) by the end of the year - but realistically it’ll probably be more like 7-8 months. We’ll see, though…

UPDATE - The high amount of debt reduction per month had me a little confused because it seems the last couple months haven’t been anywhere near that high - then it occurred to me that we’ve only had a mortgage payment the last two months. Go figure… So the $2,000/month thing may not really be sustainable into the future (although with Melody’s raise we should have a decent shot of getting close, I hope).

This entry was posted on Wednesday, August 29th, 2007 at 9:32 pm and is filed under Life. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.