We hate debt. In fact, we have none. We own both of our vehicles - paid cash for our van. No schools loans, thanks to tuition free colleges and parents that were willing to help. The credit card is off limits - except for reimbursable expenses for work. We don't owe money to friends, family or any financial institutions (minus our house). But, we do have this measly thing we call a "second mortgage." You know, that's the creative lending they (meaning the banks) maneuver when you don't have twenty percent down on your home. It's not much, just enough to drive us crazy. After months of brainstorming the best way to pay it off quickly - the lottery isn't reliable, fabulous prizes on game shows are overrated, and we can't get a call back on "Deal or No Deal" - we've made the decision to follow Dave Ramsey's Financial Peace University Baby Steps.
I realize that Dave can be a bit controversial. No debt? Is that really even possible? We believe it is. So much so, that we're taking extreme measures to ensure that we pay off our second mortgage and stay debt-free for the rest of our lives. Starting January 1st, we've employed the cash envelope system for all of our cash purchases. Groceries, gas, clothing - and are saving as much money as possible...so far so good. You can't believe the emotion that cash spending evokes. Purchasing an item of clothing requires much more thought and purpose. I bought Annelise a dress at a consignment shop on Saturday - and thought hard and long if I really wanted to spend $6.50 on it. When I pulled the cash out of my wallet, it was so...freeing. Not the word you expected, right? I thought to myself...
"How satisfying. I just purchased something that I had the money to buy and don't have to worry whether or not I've just cut into our grocery budget or worse, gone into debt to have it."
It was a very pleasing experience.
P.S. I know that some of you have done the envelope system before. Would you mind sharing tips on what has worked and what hasn't? Also, what do you spend on groceries each month. I feel like our budget is high, but don't have anything to compare it to.