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Getting out of debt

Over the last year or so, Ginger and I have been in the track to get out of debt and become completely debt free! Our goal is to have it all gone within the next 12-16 months, except for the house. The process has not been without its challenges, but we’re making headways.

I’ve decided to write each of the steps we’re taking to get there, with the whys and hows of each step. Feel free to ask me questions if you have any! I’ve been really really REALLY  excited about this, it's become an obsession for me.

Step #1 – The audit

You can’t possibly get out of debt if you don’t know how much money a month you spend on stuff. So the first step you need to take is to audit your bank account and find out all the places where your bank is leaking money, and list them out in a spreadsheet.

It’s actually very important to list them out and write them down! Don’t trust your memory to remember all this stuff, it can get confusing, and we’ll need to refer to this information later, so make sure it’s clean and easy to read.

Here’s how to do it:

1 – Go to your bank’s website, and look for your monthly statements. Once you locate them, go through them back to the first day of two months ago. For example, if you start today, go back to the statement starting  may 1st, 09.

2 – Look carefully through every single transaction. Write down on your spreadsheet every transaction that is recurring, as in monthly gym fees, automated water bill payments, credit card payments, car payments, etc. Write down the date the transaction happened, what the payments is for, and the amount. Do not write out stuff like fast food, movie nights, etc, but do write down fuel and grocery shopping expenses. All we’re putting together right now is a list of all regular bills (utilities, internet) and irregular bills (groceries, fuel).

This list will give you a first overview of everything that goes out of your account regularly. It’s predictable, or almost so. This will be a list of all the bills that you need to survive (like groceries) or that you’ll be sent to collections if you don’t pay (like your credit card payment). At the end of the day, you’ll know when something is due, how much is due, and who to pay. We also went back two months to ensure we got everything, including any payments you might’ve skipped for a month, and to help us get an average dollar amount for that expense (since some months you’ll spend more on fuel than others, for example).

Review your list, make sure it’s accurate, and then save it. It is time consuming, and it might be headache-inducing, but it’ll pay off!

Until next time!

Ouch!

I was surprised to find out that, of all building-like DIY projects, I tend to enjoy plumbing the most. I mean, sure, it can be nasty and smell horrible, but I follow some simple prep-work rules:

* Clean everything as much as you can before hand – There’s no reason you should be sitting in a puddle of dirty water

* Wear gloves – It just decreases the chance of you touching something nasty that escaped your cleaning (step 1 above).

 

So, a few months ago, our old garbage disposal crushed its last piece of food, and died a quiet death. It just wouldn’t turn anymore, sounded like the gears were stuck out of place or something. Well, off I went to the store and got a new one, slightly more powerful (.75 hp, as opposed to the 1/2 hp we had before). Replacing it took about 1 – 1 1/2 hour, including removing the old drain (it didn’t have any putty!!! I’m surprised it wasn’t leaking). It worked like a champ.

Last night, I’m getting some water for the kids after dinner when I step on a bit of water. “Oh yeah,” says Ginger, “It seems that we got a bit of a water leak from the sink. I first noticed it today.” No big deal, I thought, I’ll just take a look after we put the kids to bed. I knew one of the pipes needed to be replaced after I’d installed the new disposal, it was a bit short, but it wasn’t bad. Anyways, I got under the sink, tried moving the disposal a bit to see if I could find the source of the leak, and not really finding anything really telling, I go and turn the disposal on. Surprise!!! The whole thing falls off the sink, with water from the faucet spilling through the now empty sink drain. Oh boy! What a mess to clean!

It wasn’t too bad, though. Ginger got me some towels, I dried everything up and quickly (really, under 10 mins) hooked everything back up. The source of the leak? Apparently, when I installed the disposal, I didn’t turn the neck lock (which holds the disposal to the drain) far enough, so it didn’t actually “lock” in place. There’s little notches at the end of the thread that you’re supposed to lock the neck to, and I didn’t do that. Slowly, over time, the neck went down the thread, until it fell off! The moral of the story is “When tightening something, tighten it really, REALLY tight”.