Financial Shape: July 2008

Jeremy and I are in the process of becoming debt-free. At the end of each month, I write down what we accomplished that month, as well as any goals we have for the next month.

Here's how we are so far:

Step 1: Fund an emergency fund with $1,000.00. Start a budget. (We also plan on using the envelope system, which I think this little tool will work great for that.)
Step 2: Pay off all debt with the debt snowball. Still working on it. Besides making a substantially larger payment towards one payment this month, we opened a new credit card. (Wait, hear me out!) It has 0% APR on balance transfers until August 2009. I transferred all but $2,000.00 of my student loans on this card. As soon as we get the first statement, we will go to the bank and set up an automatic payment. That way, we will never forget about making the payment and sending the APR into the default rate, which is sickening (23.99%!!!). We divided the amount we transferred by twelve (the number of months until August of 2009), and that will be our 'minimum' payment.
Step 3: Put 3-6 months expenses into savings.
Step 4: Invest 15% of income into Roth IRA's and Pre-tax Retirement Plans. We skipped ahead to this step and opened a small account for the girls. We will add to this plan, as well as start one for ourselves once we officially reach this step.
Step 5: College funding for our girls.
Step 6: Pay off home early.
Step 7: Build wealth and give!

This was the first month we had a budget. It did not go over very well. We forgot to put our land payment on the worksheet, and a few things popped up that we forgot to write down. Another problem with it is we don't have enough cash to fund all the envelopes on the 1st of the month. I would love to keep the debit card at home and live strictly out of the envelopes. We are discussing different options so hopefully, August will be better.