Mark and I are in financial recovery mode. We've decided that we're tired of living with so much uncertainty around money and since our income is always a craps shoot with a him a freelance carpenter and I with one part time job and another to start in the month, the only certainty we can achieve is to get our debts down to our mortgage and nothing else. As of the beginning of this year, we're down to my student loans (two of them), a home equity line of credit (aka a HELOC) and our mortgage.
As of Monday, I'll have one student loan paid off and we'll start applying that payment to the second student loan (under $9k). We're selling off our minivan and buying something smaller, with better fuel economy and with a lower insurance requirement. We're also selling our third car (thereby eliminating it's gas needs and insurance needs, money we can also apply to the student loan) and if Mark needs to get somewhere without us, he'll have to drive his work truck. This should net us almost enough money to cut the second student loan in half. Once we pay off the second student loan, we'll take the payment we would have been making on both and apply it to the HELOC. And once that's done (it'll be a while) we can start working on knocking down our mortgage. We're also planning on looking into rolling our HELOC and Mortgage into a single, low interest payment so that once the student loans are knocked out we can be immediately attacking our mortgage and building up six months of expenses (see below). Add to that the intent to apply all of my new jobs income to these payments and emergency funds and our financial future starts to looks a heck of a lot brighter.
Did I say emergency funds? Hell yes: we're setting aside $1500 emergency cash in our savings that we do not touch unless we're in a verifiable emergency. With Mark unexpected surgery last year, we were just lucky we had the HELOC to pay off our deductible on our health insurance and cover him not working for almost a month. Without it, we could have been in big trouble. I don't ever want to be in that position again. SO, we've squirreled away the amount of our deductible.
After that, we'll start working on building up six months of expenses so that if something crazy happens and we cannot work, we have some money invested in something where we can access it in a relatively short amount of time. Somewhere in there, we're hoping to start saving for retirement as well.
We're focused. We're making change in our lives. We're confident we can live a debt free life. I guess you can call this is our New Year's Resolution. And yes, it kinda scares the hell out of me, but I can see a better future for my family so I'm grabbing it. And that? That's really fun.
If you have a plan, what is it? If not, why not consider making one? Spell out your road map for your financial future and then come link it in comments. You've got two weeks to figure it out and then I'm posting all the links so that everyone can be inspired.