Beyond Debt Reduction: Onward and Upward
Sometimes I get a comment that inspires me to toss out whatever I planned to blog about, and instead go off on an unplanned tangent. Today is one of those days! LOL Yesterday Shanti from Antishay left a short and simple comment on my post about what a debt free budget looks like (emphasis mine):
I think it’s great that we get to keep watching you grow up and up even after debt is gone.
That has been on my mind since last night when I read it after work. At first I couldn’t pin it down, but this morning as I start my 3rd cup of coffee (yes this blog is 110% fuelled by coffee) it hits me: Beyond the debt is uncharted territory! Especially for those folks who are where I was last year; that is, grappling with what feels like a mountain of debt.
Back when I was in the Army, there was a saying: “Be able to perform the duties of all ranks below you, but also learn the duties of at least one rank (better yet two ranks) above you.” In short, always look ahead and be capable of doing something before you get the promotion. I started unconsciously applying this philosophy in January when I decided it was time to get serious about learning about investing, which is Baby Step Four.
This week I just officially finished Baby Step Two (eliminating all non-mortgage debt). Now it is time for me to move into Baby Step Three, building up a fully funded cash emergency fund which for me will entail 3 months of expenses plus enough money to replace my almost-antique central heating and air unit.
It’s a very good thing we finished Baby Step Two right now: the Army has finally processed the travel pay overpayment/repayment mess and it hit this pay period. Hubby got paid a grand total of $192.45 today! He feels flat broke, and I just spent several minutes pointing out that this is not a big deal anymore. He only has the cell phone bill coming out of his account, plus filling up his truck. We can handle this. It’s no longer a big deal, because we have our necessities covered and will still have money to put into the emergency fund.
Another “whammy” that would have set us back last year is my GI Bill stipend was reduced because my class load was reduced. There just wasn’t a way for me to arrange a class schedule to get up to 3/4 time, so I am only going half time (organic chemistry is the rock that won’t move, and I just don’t do morning classes … nor will my academic advisor let me after seeing me over the summer dragging in for her 0800 class!). So my GI Bill payment is about $400 less a month, and hubby’s travel pay repayment is about $400 a month.
And yet even with our income going down about $800 a month, we will still be able to squirrel away money for our emergency fund. We just won’t be able to zoom through Baby Step Three as fast as I wanted, but it will still be done in a pretty short amount of time. This is what it looks like on the other side of that mountain of debt, folks … and it’s getting pretty close to that “financial peace” idea Dave Ramsey keeps talking about.
