New Year, New Budget

As mentioned in my previous post, I am preparing to cut back on hours at work. It will be a gradual process because it also entails a new position, but the goal is to be around 30 hours or less per week within the next month. With less hours comes less money, so our budget needed a makeover. Have I mentioned how much I love budgets? I texted a friend of mine to see what she was doing over the New Year's holiday and when she replied "redoing our yearly budget" I got so excited for her it was silly. 

Here's where we came in after last year's intense debt payoff schedule: We made approximately the same amount of income as the prior year, gave more than we did the prior year, and paid off just over $23,000 in credit card debt. (Why, oh WHY, didn't we do Financial Peace sooner?!) The debt we have left (besides the mortgage) is student loan debt totaling less than $12,000. Zac is currently in nursing school so his loans have not kicked in yet which is why they didn't appear on our original debt snowball.  

If we follow the Financial Peace program exactly, we shouldn't do anything else before the student loans are paid off. However, we didn't want to be caught off guard by the reduced income and one large, foreseeable expense approaching in the near future, so we are taking a short sabbatical from the debt snowball. Over the next few weeks I'll be writing on each of the following topics, but this is a quick summary of the things we are changing in 2015. 

-Created an electronic envelope system for certain categories and added three new envelopes
-I started contributing to my 401(k) again (which I shut off in January of last year)
-Opened a credit card (I know you cringed at this one, I did too)
-Temporarily jumped forward to baby step 3 to build up our savings account
-Adjusted our state and federal withholdings 

Our ultimate goal of being debt free has not changed. I've been avoiding writing about any of these topics for a few weeks because I didn't want to admit that we aren't following the program exactly... but the fact is, we're not, and I'm not being honest or transparent if I don't share that part with you. In fact, while I'm at it, I'll even tell you about a splurge purchase we made a few weeks ago. I would start with the justifications of why, but it's paid for and done, so I'll save the excuses. We booked a trip for our anniversary in March... to Madison, WI! This might be the first time we've ever paid cash for a trip. What's in Madison you might be asking? A workshop on Tiny Houses. Don't get me started, that's a whole other topic, probably a whole other blog. In any case, we are fascinated by this movement and the idea of living well within your means, truly embracing the less is more concept. No, it's not an all-inclusive resort, but it is something we are both extremely interested in and anxious to learn more about...and sometimes you just need a common topic to dream about together in the midst of long weeks, mountains of laundry and never ending to-do lists. 

"Owe no one anything, except to love each other,
for the one who loves another has fulfilled the law."
Romans 13:8