So this is what a Rock and a Hard Place feels like

I realized a while ago that our system for budgeting and spending was imperfect a while ago.  I loved our debt diet, how it was helping us pay off our debt, but we were having trouble with our normal monthly expenses and staying afloat.  From our tax return we put aside a little cushion for ourselves.  But by August, that cushion was gone.  We needed a different way to organize our spending and also to catalyze our debt reduction.  As of this month, it's been a year since I start this blog and our debt diet and we've paid off about $3,000.  Which feels GREAT until I look at what's left ($17,000) and then I start to feel a little sick inside and try to picture another 5 years of this.  I want it done faster.

This month we had an unfortunate emergency trip to Las Vegas.  Tony's uncle passed away and we needed to be there asap.  Thankfully our wonderful cousin was able to get us buddy passes, so that our plane tickets were cut in half, and Tony got an advance, so we could pay for regular bills and said plane ticket.  However, this left us in a predicament for October.  Our precarious situation was made even worse by having Tony's check reduced even more.

This last week Tony thought that maybe we should consult a lawyer about filing bankruptcy.  As least then we'd have our revolving debt (which is all of our debt basically) wiped out and we would have that money freed up every month so that we weren't so stressed at the end of each month.  First got our free annual credit reports here.  We were surprised about how well our reports were, for some reason we had terrible doomsday visions of what would be on there, but they were even somewhat good. I also learned that there's a difference between a credit report and a credit score.  A report is fact.  This is your history of payments, accounts, cards, collections, etc.  A score is an arbitrary number derived from those facts.  That's why each one can be so different (if you've seen those commercials).  This gave us some doubts about filing, since that would mess up our nice reports for 10 years.  So we talked with our good friends that had been through a bankruptcy and were doing really well.  We shared our situation and they shared their circumstances.  Then they let us borrow a book, not just any book, but the Total Money Makeover by Dave Ramsey.  

This book helped us confirm what we and our friends were thinking, "we're not in an insurmountable amount of debt, just terrible at handling our money." So we canceled the meeting with the lawyer and started reading instead.  When I started reading it only took me one night to get through 150 pages. What I really like about the book is how easy it is to read. He is very straight-forward and may come off as harsh, but honestly I think that's what needs to be done in most cases.  Dave talks about a lot of money issues that make so much sense when laid out like that. He suggests basically the same thing for paying off debt (he calls it a debt snowball, Oprah calls it a debt diet), so we're good there, but he addresses the other side of things - what to do with the rest of our money.  He shows examples of a Zero balance budget, basically every penny goes somewhere, which is what we are doing starting tomorrow.   Along with that, he talks about a cash-only system (besides bills that come directly out of our account).  So that's what we're going to try.  This month is going to be super tight because unless we take another advance, we will be squeezing by on a lower income.  I'm very excited though to see how we do with cash only (that includes groceries, gas, and dining out/entertainment - which is super low this month anyway) and hopefully see some changes in the next few weeks and months.

I'll keep you posted.