I have been striving to control expenses over the last several years as a result of a substantial decrease in income. What I gained was time with my family and my children that time was much more valuable than the income ever could have been.
The result of several years of less income with only limited abilities to cut costs was a substantial reduction of overall assets and cash flow. Like a star wars episode their must be balance in the force. Well balancing your checkbook isn't quite the same thing or is it?
Durring my lunch breaks which are only thirty minutes I dart home to see my children and wife if she isn't working I promptly scoop up my baby girl and carry her around the house while grabbing a drink and a quick bite to eat. I would otherwise spend my lunch sitting in my car and figuring my finances. As I work second shift all week I do not see nearly as much of the girls as I would typically like. I am also working a second job which intermittently takes up the whole weekend. The purpose of keeping both jobs is two parts I have spent a fair amount of time over the last several years being unemployed finding a job when you don't have one is much more difficult. I stayed at home with the kids during that time and was the official stay at home dad so I was very busy and that is a hard job to do.
For the sake of simplifying my life I have followed a few steps which I have known or understood my whole adult life but did not always follow.
I did the grueling duty of looking at all my assets and liabilities listing them out focusing on the cost of each and every debt and arriving at a very large number when adding the mortgage and student loans.
Once I had a very good idea of where I was at which is nowhere near where I was a few years ago I began to do the hard work of getting out of the mess I had gotten myself into. I have not hit rock bottom but did not intend to go further than I already had in the wrong direction when the opportunity for a new position opened up I jumped on it instead of quiting my restart job I kept it to accelerate debt reduction. I picked a debt and not the traditional one having the highest interest that I placed second on the list as my priorities were different. I then began to ruthlessly attack it attempting to drop it anyway I could in order to accelerate reduction.
At the same time I have increased the cushion in my checking account using rounding and automatic withdrawals. The normal theory is to stop using all debt instruments to get out of debt instead I use corrective leverage I have accounts which I have used for the sole purpose of reducing other accounts. While this is a contrary view to most assessments I see a lower interest rate as an improvement in the short run as an excellent way to make a larger dent. Leverage used correctly has fantastic properties.
Their are ways to borrow like prosper.com and others which you can fiance debt at less than high interest rates loans and lines of credit with low or temporary rates are fine as long as you can keep up the payments and use all the principle you borrow to pay down higher debts.
I reward myself for success I am far from treating myself to something fantastic like a big screen TV more along the lines of a cheep night out or a new pair of sneakers. I try not to spend anything outside of routine expenses. We don't go out to eat or order in I don't buy new clothes often unless I need them for work and then I buy everything used except shoes socks and underwear. I try to wear out the oldest and rattiest clothes first. the result is more space and less laundry overtime.
I have crossed the first big hurdle in just under two months with the aide of some scrap metal made up of gold silver copper aluminum and lead. I am attempting now to clear the house of some antique furniture I have refinished through group shops and possibly auctions. All of this is hard work with a limited amount of time in the day. My next goal is approximately the same size as my last goal and will take likely longer around three months of work to eliminate, but when it is eliminated it will accelerate paying down the next one as it will free up around 50.00 a month when it is gone the reason it will take longer short of some significant sales or other sources of income is that I have taken one burden from my wife and will be taking another next month. She will be taking the tax return and using it to pay down or actually off as many as two others of equal size. All together that will free up about two hundred dollars a month between the two of us to accelerate other payments.
I am currently a temp at my new job, the paperwork is already started to go permanent when I do I expect a two dollar an hour bump in pay that bump of eighty dollars a week will be split between two weekly automatic withdrawals one to savings and the other to pay down the next debt which may accelerate my pay down significantly the difference in overtime I will manually transfer to savings or use to pay down the same debt on alternate weeks. The result of a pay increase will not be felt in our daily lives as a comfort they will not stimulate the economy or raise our standard of living in the short run what they will do is decrease our debt making life easier in the long run and allowing us to live more within our means.
My wife is a wild card in this respect she is very hostile when it comes to money and we are far from on the same page of living simply and reducing costs. Which is not to say we don't understand each other but she does not view money the same way as I do nor do we follow the same ideals about debt. You can make this into a huge problem if you like and yes it does cause friction, however, I love her and money is not such a big thing if kept in perspective.