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"Debt-Proof Living" Talk with Husband

September 23rd, 2008 at 01:33 pm

Well, my husband and I had another heart-to-heart last night and it went really well. I think we'd both gotten frustrated with each other over finances. I have just finished reading Debt-Proof Living by Mary Hunt that I'd seen mentioned on the blogs several times and told him about some of the things she discusses. I liked her system for dealing with the unexpected expenses throughout the year and we've decided to start our own Freedom Account this next pay period (Sept. 30th). We'll have the following sub-categories to start with:

Auto Maintenance & Repair - $1,000/year
Date Night/Family Activities - $360/year
Gift - $360/year
Clothing - $360/year
Vacation (airline tickets home) - $900/year

This will require a deposit of $262/month which I will automate into an account that is NOT affiliated with my current bank. I do not want to see the balance everytime we log in. I think it will be easier for us if it's out of sight. I have already set up the Excel spreadsheet as the book suggests and am ready to start; it's exciting and feels very empowering to be taking such proactive steps in our financial management.

Oh, my husband also agreed to staying in the apartment for an additional year (to January 2011) in order to achieve our goals of paying off ALL credit card debts and building up a downpayment fund before buying a house. This is a HUGE step for us. I have worried for months about how I'd feel and what we'd do when fall 2009 came and we were still in debt facing the decision to buy a house or not. With our current plan, I project we'll make our last credit card payment in May 2010. Then we can sock away all the money currently going to debt repayment to a downpayment fund June-December 2010.

Any suggestions on creating this second bank account for our Freedom Account? Is it wise to go to a different bank? I'd love to hear any advice from those already doing this; thanks!

10 Responses to “"Debt-Proof Living" Talk with Husband”

  1. fruitbowlk Says:

    That was a very wise decision to wait on getting a house until after you'll pay off your credit card debt.

  2. Broken Arrow Says:

    Sounds like progress! Good for you!

  3. jennlem Says:

    Good Luck! Just my 2 cents but the Date night/family activities and clothing budgets look low to me--but then I don't know you so it may be more than enough.
    As far as a separate account for your freedom accounts---ING all the way. Easy to open and easy to get your money quickly

  4. creditcardfree Says:

    Our freedom account is in the same bank. It is just another checking account. We use it for our freedom account and "slush funds". It seems to be enough for me to simply know what balance is for the future...I just don't touch it. Because I mix the freedom funds with some of our extra savings, I see some of the money as being able to use. It works for us....the freedom account changed our lives! Really!

  5. campfrugal Says:

    I have a freedom account. It is a regular savings account attached to my checking account and every month, money is direct deposited from my checking account into that accout and covers things like property taxes, schooling costs and any other little emergencies.

  6. merch Says:

    I don't have a separate account. I just use a virtual envelope systems. But the key is to live on that budget and to work together. You are both going to have weak moments and need to lean on each other.

    Also, me and my wife have a rule that if the budget needs to be changed, we both need to agree on it. If one of us says no, then no it is.

    I am not familiar with Mary Hunt. I have read Dave Ramsey. The biggest thing is to find a system that works for you and any system that improves communication is good in my eyes.

  7. Personal Finance Student Says:

    Thanks everyone!

    Jennlem - we don't really buy clothes much at all; I think it's been about a year since my husband got something new. We shop sales and can often find decent stuff at Goodwill when we do shop so I think it should work. Date night/Family activities are usually lower cost or free things and we mainly need that money for babysitting for the date nights. My husband and I also get $50 "fun money" each month that doesn't get accounted for and I have bought a piece of clothing here and there with that. Thanks for the ING recommendation, I was leaning towards them!

    Creditcardfree - I worry about having that discipline when I get discouraged about credit cards. I think I'd be tempted to send our Freedom Account's money to them in a moment of weakness if I saw it in front of me all the time. What are "slush funds"?

    CampFrugal - I have thought of doing a regular savings account, so do you just transfer the money back into your checking account once a purchase has been made?

    Merch - I wish we were that disciplined, but I think I need the money completely out of our account so else it may be seen as money that can be used now. I haven't read Dave Ramsey, but am thinking I might soon. Many people here seem to like him.

  8. creditcardfree Says:

    PFS-slush funds to us are funds that are simply extra...not really allocated to anything. It ends up being an emergency fund of sorts...but really for anything...vacation, extra clothes, gifts. We probably should have our budget a little more defined, but our slush fund works for us!

  9. campfrugal Says:

    Hi. I have a few hundred dollars transfered to the savings account every month, when a big bill comes around like property taxes, I transfer the money back to checking and pay the bill. Eventually, you are ahead in your savings account money; and it is a pretty good feeling to know that the money is there, when something comes due. I use mine for property taxes, private schooling classes for my kids (which come to around $1200/year and Christmas, but you can have whatever categories you want. Some people use their Freedom Account for the items I stated above and also car/home insurances, bills that come every three months like garbage removal, etc. I don't because I have some bills like insurance automically deducted from my checking account every month and I just pay the $45.00 to garbage pickup every three months. You just need to figure out how much money you need to have by a certain date and divide that by how often you get paid and have that amount put into your "Freedom Account". In my case, my regular savings account that is attached to my checking account. Hope this helps.

  10. Personal Finance Student Says:

    Thanks campfrugal and creditcardfree! I didn't realize what a "slush fund" was, but apparently that's what I'm planning for our $20 Challenge to be. Thanks for your help in understanding things!

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