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Updated about 5 years ago, 12/13/2019
Budget to dig myself out of debt now up and running
Let me start with a little background on why I am posting this as it strikes me as a bit of a random post to just throw out there. The weekend of the 9th through the 11th I had to drive from Corpus Christi, Tx. to Clayton, N.C. and back. This gave me roughly 42hrs behind the wheel. I chose to use some of that time to listen to an audiobook that I have been meaning to listen to for a long time, Robert Kyosaki's Rich Dad/Poor Dad. To say that it was mind-blowing and eye-opening would be a gross understatement. I made up my mind then and there to change things in my life, dig myself out of the hole that I had gotten myself and my family into due to my bad financial habits and my ignorance of how money actually works and started devising a plan. As soon as I got it back home I wrote out my plan and forced myself into action. My 1st step was to post on bigger pockets (I have been a pro member for months now and have never posted or been active). I also found and signed up to go to a local REI meeting (I am somewhat shy and I figure that this will force me to come out of my shell and network with others who are in the real estate investment). Goal #3 was get a handle of my finances by developing a budget and stick to it to pay off all my debt so that i can position myself to be able to invest. This is the 1st step to my goal. I have created a budget, it is nothing fancy, I used a word document to list out all my bills and expenses as well as the due dates for the payments. From there, I created an excel spreadsheet making sure that I pay myself 1st and foremost every single paycheck (I am setting aside 20% of my paycheck to pay off debt) and to track where my money is going. In addition to this, I have downloaded an app to my phone that will allow me to track my income and expenses real-time (not sure if stating which one it is would violate forum rules so i will refrain from doing that). Now comes the longest part of my goal, i have to stick with it.
So, why post about it? Several reasons. 1.) it was one of my action items so I had to get it done. 2.) accountability. It helps a ton to be held accountable and the way I figure it if people follow my post or my progress, I have to stay accountable to more than just myself and my family. Finally 3.) advice. For starters, does everyone budget for things like going out every once in a while or should I just laser focus on paying off debt. Currently, with 20% going to debt payoff which I will pay myself first, I still have a little bit of money left over, its not much but its something. Do I roll that into the 20% to pay off my debt faster? Do I use that to maybe take the family out once or twice a month? what have you done and how has it worked
Next question, what should I pay off first? Largest debt or highest interest debt? Part of me is saying "get rid of those large debts first but if I have a smaller debt that is charging me more interest, should I get rid of them first?
Doing this has opened up more questions and I am assuming that is a good thing. I am currently reading "How to invest in real estate" as one of my goals but I think after I am done with that one I am going to find a good book on budgeting to make sure I am doing it right.