I'm a little reluctant to post updates because... well, it's all good, and I remember feeling frustrated a year ago when I'd read about how easy it was for some people. Then I realized that maybe my good news can be inspiring to some, because this is the result of commitment and work. Our income is on the low side of average, but not low income - but I just mean it hasn't been all easy because I sold my yacht or stopped my latte habit or anything. A year ago I felt like we weren't getting anywhere and couldn't see my way out, and I felt like there really wasn't anything to cut, because we were not extravagant spenders anyway.
We started on our path in October 2010. We had no cc debt and we'd even knocked off our car loan by then too, but we were still living paycheck to paycheck and big, foreseeable expenses were always knocking us around, and we had student loans and a mortgage that we just couldn't see our way out of. Well, we still have the student loans and the mortgage, but I am starting to see a light waaaaaay at the end of the tunnel. The tunnel is currently 12 years long, but man, that beats 30 years.
In that time we've been sending small but steady extra payments to both our student loan and mortgage - yes, against DR's advice to focus our energy into one thing, but I can't pay off either one for years and years anyway, so I just feel better knowing we're working on both of them. I think ultimately he is about doing what motivates you, and this is what motivates me.
Much more exciting, we are within a few months of reaching our $10k in cash savings goal - the FFEF. A year ago - there's even a post from me in the getting out of debt dec 10 thread bemoaning this - I didn't think we'd get here for another 10 years. I felt like there was just no way out - 10 years for our emergency fund, and no way to pay off our mortgage even a year early.
How did we do it? Nothing special, but it worked. We just really tightened our belts. The biggest thing by far was having DH on board. I couldn't have done it without him being on board. He has the same financial values as I do but isn't quite as watchful on the budget, but he has accepted me being the gatekeeper of the spending, and I've rode us hard on that. DH earned some extra money on the Internet. I didn't get a raise in all this time (years and years, actually), so I am amazed that we got here though the tide was against us - the same money but costs increasing all around.
Having a sinking fund, which I prioritized earlier than DR's plan, was another huge factor, I think. At first, we were still having hard months. But after a while, with our sinking funds funded, the hard months went away. A lot of that was luck - I mean, we haven't needed major car repairs or anything - but a lot of it was also just planning. I had a sinking fund for even relatively small items - like DH gets a prescription online (to save a little) every 3 months. Instead of eating the $40 every 3 months, I was saving $14 a month. Just one example of dozens. At first we often didn't have enough in the funds to cover the expense fully, but even then, it made it a lot easier. Say DD had to go to the dentist and it was $240. Maybe I only had $150 saved for the dentist, but coughing up $90 extra went over a lot easier than coughing up the whole $240.
It was very motivating for me to work with a tighter budget when I was managing the sinking funds. I'd look and say "uh-oh, there's not a lot in our heating fuel fund and it's September" and I'd go crazy putting money in there.
It also eventually had a very different effect, almost an opposite one - after being very concerned about it for so long, I eventually got to feel peace. At some point, there was finally, finally enough in there that I felt like we were in good shape. Oh no, I wasn't done by any means, but I stopped feeling like we were 1 call to the plumber away from disaster, and started feeling like we could absorb small and medium things without losing any sleep.
I'm not at the 10k goal yet, but I know that, barring any major problems (KNOCK ON WOOD) we'll get there by July. And frankly, it seems like we have a pretty fair shot of getting there as early as April.
I am super frugal and a tightwad and don't like to spend, but today it occurred to me that we should reward ourselves when we reach this milestone. I talked about it with DH and we agreed that the month after we hit the milestone, we'll give the month's savings to OURSELVES! Just one month, but that will be a few hundred dollars (don't know exactly how much yet) - anything we want. A little one-night vacation away. Going out to eat once or twice. Maybe DH would like buy himself a new outfit, DD a new nice toy. I'm so accustomed to not spending, I'm having a hard time thinking of things for me other than a cheese grater (um, $6) but I'm sure I'll think of something! I have time to dream it up, anyway.
Then after that, we are putting $100 a month into our retirement, which is pitiful but we're excited because it's been so long since we've put anything in there. Then all our extra money is going to the mortgage! (Yes, I know DR says 15% to retirement before doing the mortgage, and we may adjust in the future but right now this is what we are most comfortable with).
I have a huge spreadsheet (seriously, it's insane.. I've got 15 different tabs going on in there, cross references, calculating current and projected everything, etc) but it's hard to predict REAL LIFE years and years down the road. But with a simplistic calculation, we could be completely debt free including our mortgage in 12 years, without us having to win the lottery or have a long-lost uncle die and leave us his estate. Now, I can't count on that, but it's something to hold on to.
So I'm just super excited to be so near such a big goal, and to be able to see, even if very far away, the finish line. I hope this happens for every one of you, if it hasn't already.