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Why Debt Free and Broke?

Have you heard the rumor that once you get out of debt you can save away money so fast!!!  In our case that is so not true!!  We are debt free, except for the house, and still broke.  “Debt Free and Broke” is about our journey to build wealth on a small income. 

What is our Budget?

I will be sharing how we did with our budget every month, along with ways that we have found to save extra money.  Our income is irregular so we have a set budget we try to live on every month whether it’s a high or low income month.

Income: $4,425.00
   Our Company $3,875.00 – Irrugular, this is the goal                                                  Rental Income $550.00 – We rent out our basement

Expenses: $4,416.75
   Church $462.50 – 10% + $20
   Taxes $968.75 – 25%
   Home $1,000.00
   Insurance $518.00
   Utilities $320.00
   Gasoline $195.00
   Medical $64.00
   Food $224.00
   Company Expenses $193.75 – 5%
   Savings $193.75 – 5%
   Repairs $150.00
   Gifts $77.00
   Clothing/Entertainment/Other $50.00

Who Are We?

We are Rob and Lizzy, we got married December 2003. The only debt we had was Rob’s truck he bought for $5000 in 2002.  We paid it off January of 2004 and have been debt free ever since.

Rob got his BA degree in Construction Management with no school loans, thanks to scholarships and as he likes to tell everyone “Lizzy put me through school”.  I worked full-time as a hairstylist and he worked on Friday and Saturdays in construction.

After he finished school I went to work at a bank and he worked full-time as a Manager, we saved $10,000 for a down payment on our house. Sadly I know we could have saved more if I was more focused.

We bought our home July 2008, a beautiful duplex (it looks like a single family home which I like) Rob wanted to buy a duplex so we could have half our mortgage paid for. Our home appraised for $189,000 and we got it for $159,900! In 3 years we have paid off $19,400 leaving us with a $140,500 mortgage we keep chipping away at. We haven’t decided if we sell it in 2 years or keep it and rent the whole house.

As soon as our first baby was born I became a stay-at-home mom and love it.  I add to our income by doing haircuts and finding savings wherever I can on the things we buy.  Rob was laid of from his job November 2010 and started his own construction company in January. 

I had a wake up call in May when I realized that our budget wasn’t working. We started the year with $5000 in savings, added $6500 ($2000 from our parents and a $3000 tax return) and spent $10,000. Where did $10,000 go in 5 months!? I had to tell Rob, I felt like I had told him we were $10,000 in debt.  He had me add up all our spending for the year (part of that job was easy since I had been tracking it January-March, but I let it slip in April and May).  We had overspent, but it wasn’t as bad as I thought.  We paid $6500 for baby #2 in March, $2500 to start his company, and $1000 was unaccounted for.  It’s that $1000 that stings the most, it left our savings account and vanished. Ouch!

Now we are saving money for our emergency fund, then we will save for a “new to us” car (which we desperately need), baby #3 (the reason we have to move in 2 years), and a trip to Europe (which we have been wanting to go on for 7 years now).

 So there you have it, almost everything about us 🙂 Follow along on our journey to save for the future on a tight budget.

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