When we looked at our budget, we realized a few things.
- We had less debt than the average American family.
- We made a little more than the average American family, too.
- We didn't have enough savings to cover a minor emergency, let alone a major emergency.
- We were reliant on two incomes.
- I was uncomfortable with the amount of debt we had.
- We needed to stop gauging our situation by the national average, because I think the average American household is financially poisoned and I don't want to think that "average" means "acceptable."
I was just looking at our budget from the end of 2009. That was a crazy year for us - Justin was out of work for about six months, we adopted Jocelyn, and I took a three month maternity leave. We accrued a lot of debt - close to a my year's salary in debt. At the end of 2009 - just a little over a year ago - 50% of our monthly income went to creditors. As members of the Church of Jesus Christ, we pay 10% of our income to in tithes every month. So that left us with 40% of our income to pay static monthly bills like utilities and insurance, and things like gas and food and fun. Of that 50%, only about 15% of that amount actually went to principal. The rest was making other people rich. It made me cry.
Since the end of 2009
- We have paid off $14,000 of debt
- We have paid off and closed four credit cards/department store cards
- Even though we now pay daycare and more gas because Justin commutes every day, we have more discretionary money
- Besides eating out less and having a few more generic items around the house, our lifestyles haven't really changed