written by Corey Stokes and Michelline Stokes
My wife recently said that, Everyone in a relationship has a “Corey and Michelline.” On one hand you have the very intense, get it done person. and on the other hand you have the show me what I have to work with, person. In our journey to live #debtfree, these two people were often butting heads. During a conversation with a mutual friend. We were asked what our first step was to become debt free. Although this is a multilayered answer that comes with two different perspectives it all boils down to one word. Communication.
When we first got stared, we didn’t discuss financial matters. Now, it is a topic just like everything else. Once a month we try to have a budget meeting to discuss where money is going or where it needs to go for the upcoming month; and we get it down on paper (or in my case excel). It took us a while to get to this point though.
Our very first step was communication. We needed to know how much money we had coming in. We also needed to figure out what our financial obligations were (What did we have to pay?). Then we placed them in order from smallest to largest and paid the minimum payment on everything.
Once we paid everything, if we had extra we put it in an account ear-marked emergencies. We did that until we came up with the agreed amount (recommended $500 – $1000). Then we took that money and added it to the lowest bill. Then paid that until it was gone. Then we took the extra money + the minimum payment for the smallest bill and paid the next smallest. And kept going like that until we paid everything off. This is called the snowball effect. With each roller over the snowball keeps getting bigger, allowing you to pay more than your minimum payment. BUT the key is to pay the minimum payment on everything except the smallest. That one you attack with your snowball.
Michelline however had a different perspective
“This process was hell for me in the beginning. I hated it!!! But, I understood why we had to do it. He was the “yeah, we’re going to do this and that, and it’s going to take this long” (very intent and intense). Then, there was me! I wasn’t really interested in the process. I was more like, “okay, tell me how much money I have to work with this pay period, and I’ll make it work.” I really could care less about the numbers and all the inner workings of it all. ”
The numbers are what make the formula work. But it is not just about the math, it is also about creating new habits and learning to not spend solely on emotion.
What we both agree on, is that since we’ve become #debtfree, our life has been less stressful. We both will tell you that if we can do it, you can do it too.
What was the first step you took to become debt free?
Announcements
Next blog post I will explain the Our Budget meeting. If you would like to give a quick summary of your Family budget meeting, or even if you have a question on how to start a budgeting meeting for your family or what it should look like, I am available to answer and I will included it in the next post
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Corey Stokes 