Details on our Debt Free Status

As I mentioned here, we became debt free except the mortgage on August 28th, 2012.

You can follow our journey from the very beginning in Our Money Story.  We got serious about kicking the debt habit in October of 2009.  So, it took a lot of meandering along and then 3 years of pretty focused work to eliminate our line of credit for the farm, Brian’s truck loan, and my student loans.  Along the way we continued to cash flow our (big) farm expenses and paid cash for a semi, a dump trailer, two pickups, a loader tractor, and a new barn.  In the interest of full disclosure a couple of those things were purchased with an insurance check after our shed fire in 2009.  The rest, though, all came from our own efforts and God’s grace.  Over the last 3 years we have also expanded our farming operation extensively by growing our cattle herd and sheep flock and renting more acreage.

As always, I’m being transparent here in the interest of encouraging you and spreading the word that it is possible to live without the constant pressure of bills.  There is no way we could have done this on our own so we can’t even pretend to brag about it.  I can’t count the number of times I balanced the checkbook and the numbers came out in the red only to have an unexpected check show up in the mail that very day.  One of my favorite moments of this whole experience was when I overheard my dear husband tell someone that he doesn’t know how we got here but he does know that part of it is because his wife prays a lot.  I can’t say it any better.

So… what next?  Well, per Dave Ramsey’s Baby Steps, we are tackling our Fully Funded Emergency Fund with a vengeance.  I have estimated that in the case of us losing the income from Brian’s day job we would need $1000 a month to cover the basics.  Since we are a single income family we will be building our emergency fund to $6000 to cover us for up to six months in the event of an unforeseen loss of income.  We’ve already set up an automatic monthly transfer of funds from our checking account to our emergency fund.  Those transfers will finish the emergency fund in 8 1/2 months.  Let’s see… that’s the middle of May.  I’d like to think we’ll be able to put a lot of extra money with it and get done a lot faster.  By the end of 2012 sure would be nice!

So, there’s the nitty gritty.  Questions?  Are you on a plan to get debt free?  What step are you on?

Linked to: Teach Me Tuesday @ Growing Home.

11 thoughts on “Details on our Debt Free Status

  1. Jessica

    Jena, that is AWESOME! I thought our basic expenses were pretty low, but yours BLOW me away! If you don’t mind sharing in the future, it might be interesting to see what that $1,000 includes. Our basic expenses are $1,800/month. Once we are debt free, we plan to save $16,000 in our emergency fund (using Suze Orman’s emergency fund guide rather than Dave Ramsey’s). It will take us a LONG time. I’m so excited for you and your family! And I agree, I love Brian’s description of how you got where you are. The power of a praying wife is POWERFUL indeed!

    1. marriedtothefarm Post author

      If your rent is $800+ than your budget probably looks similar to ours. Our mortgage is split evenly between two different lenders but they both wrap our house in with the outbuildings and acreage. The payments are both due once a year on January 1st. Over the past few years I’ve been able to separate our personal and business (farm) finances pretty well. Prior to that we would end up paying a lot of the farm expenses (seed, feed, etc.) out of our paychecks and in return the farm would pay the mortgage when the crops came off in the Fall. Just in the last year or so the farm has been better able to pay its own expenses and still cover the mortgage. I pay 1/3 of our property taxes from our personal funds and 2/3 from the farm account. To be really fair we would pay a portion of our mortgage out of the personal account, too, but right now its easier to just let the farm keep paying the mortgage and use our personal funds to get ahead. Our long term vision is for the farm to support us 100% without any outside income so I feel like doing it this way is fine. It’s not like we’re getting free money or anything, we’re still running the farm and doing all the work so it’s all our income. Make sense?

      Anyway, in case that still doesn’t make the numbers match, here’s the breakdown of what we’d need to cover in an emergency:
      electric $95
      cable $5 (pause service for up to 6 months)
      phone $50 (right now we pay $85 but we should have the farm pay part of it and I just never bother)
      internet $44
      personal auto insurance $170 (two pickups)
      homeowners insurance $40
      property taxes $70
      tags $25
      life insurance $25
      pet food $130
      TOTAL $654/month

      That leaves $346/month to cover gas, groceries, and miscellaneous expenses. With my pantry and freezers well stocked I feel confident that I could go for sixth months with only the occasional purchase of staples like flour and sugar. It wouldn’t be fun to go without milk but we could do it.

      A lot of the budget line items are sinking funds (taxes, etc.) that we wouldn’t pull from our account for each month but would pay them from the emergency fund as they came due. Depending on the time of year we could cut short or make it longer on the $6000.

      I pulled all these numbers from our normal budget. Is there anything important missing? The things I left out where home repairs, blow money, clothing, entertainment, Kent’s miscellaneous expense fund, maybe a few more.

    2. marriedtothefarm Post author

      Can you share more about how Suze’s emergency fund plan is different?

      Another thought I had… Brian and I are both fairly confident that with his particular skill set he could pick up at least part time work pretty quickly to get us by. If he was in an industry with high unemployment rates we would probably want to bulk up the fund a little more.

      1. Jessica

        Thank you for so much detail! Suze’s emergency fund is an 8-month emergency fund, so our $16,000 is a bit more than that, but it’s a nice even number, and for some reason, we just are really clinging to that number right now, haha! Since it’s more months than six, we figure the more, the better!

        Our rent is not $800+, so I’ll have to take a look at our expenses again and see if there’s anything we could cut out. We do pay a hefty amount in groceries per month – we go through fresh produce like you wouldn’t believe (and I’m not sure I’d be willing to give that up, hehe).

        Your expenses are something for me to shoot for, so I appreciate sharing what it all includes!

  2. Julie

    I loved this post- especially because I’ve been following you for these years and know you’ve been working hard on this!! Our debt is our mortgage and the car. The car is $130/month, but we’ve decided to keep it rather than lose our savings paying it off, which we could. Our mortgage alone is almost $1,200. : / We just make it at the end of the month. Everything is covered, but there really isn’t much extra. When Steve gets prevailing wage we try to set that aside because it’s more than his regular pay. That either goes in savings or is spent on something like new tires or filling the oil tank- things we can’t normally just pay for out-of-pocket.

    1. marriedtothefarm Post author

      Thank you Julie! I appreciate it that you’re still stopping by despite my long absences.
      It sounds like you guys are doing really well. That’s a huge mortgage (in my eyes)! Wow. And really, though I’m not a fan of any debt, you’re doing way better than most people by only having a car payments besides the mortgage. I’m glad you’re in a good position! 🙂

      1. Julie

        thanks for pointing out that we’re in a good place. I guess if I think about it, it could be a lot worse. If Steve lost his job we could make it for at least a few months. I keep thinking about all the things we would like to do and the home improvement that we just can’t afford. The money might not be rolling in, but we’re doing okay. It’s good to be reminded how good we DO have it and to be thankful! 🙂

  3. Pingback: Chit Chat and Haircut | Married To The Farm

  4. summer

    Hi Jena. I enjoyed your post. My hubby and I are working toward the same type of goals. Right now, we’re dealing with a rental house that we have been unable to sell in the past and we have non-paying renters – JOY! So, that has wiped our emergency fund like 3 times (2 different renters) – but at least we had it!!
    But I just wanted to add – if you have room, milk freezes – and still tastes the same!! Although it takes a while to thaw – i usually sit mine out on my stove during the day and put it back in the freezer that afternoon/evening, depending on when I took it out. I would also suggest tying the gallon jug up in a grocery bag before freezing, as some brands/lids allow the milk to leak out when thawing and the bag will help!


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