Budget Series Part 2: Creating a Debt Buster

The rich rule over the poor,and the borrower is servant to the lender.
Proverbs 22:7

He replied, “Because you have so little faith. Truly I tell you, if you have faith as small as a mustard seed, you can say to this mountain, ‘Move from here to there,’ and it will move. Nothing will be impossible for you.”
Matthew 17:20

In case you are just finding me, this is part two of a budget series I am running on my blog. This part is about how to create a debt buster. I started with the intention of just writing two posts about budget and debt. I have at least two more on the horizon. Turns out there is more I wanted to share than I initially thought! Let’s just dive right in today, shall we?

If you are in debt, even a little, you understand the pull of the noose from debt. It sucks the joy, the fun, the hope right out of your world. It can seem like no matter how much you plan or how much you put towards a debt, it never seems to make a dent. The devil will tell you there is no hope so why even try. Been there. Twice actually. The Man and I know first hand what it is like to be debt free. The freedom, the joy, the huge, huge strain that is lifted from your marriage. From your life. As I type now, we are on our second journey to wiping out our debt. We hope to be completely debt free of credit card and student loan debt by next spring. The first go around we never paid off college loans. If you will be prayerful, purposeful, mindful, and obedient, you will get out of debt. I will talk more about that when I wrap up this series. First, let’s talk about your plan for a second. Now that you have a clear picture of your income versus spend every pay check you can lay out a clear plan of attack. First order of business is to trim the fat. What is fat? Cable, land lines for phones, nails, pedicures, coffees, movies, eating out… all of that is fat. Trim it off. Secondly, in order to be really serious and really committed you have to get in the frame of mind to really truly pay off your debt. What do you mean? I am all about getting rid of my debt. Really? Then cut up your credit cards right now. Stop reading this post and go do it before you talk yourself out of it. As long as that plastic is still whole, you will mentally use those cards as your back up system, your bail me out money. Don’t believe me?

Look, this is our second go around with this. I can tell you exactly where we went wrong. We paid off credit card debt BUT 1.)didn’t keep with the Dave Ramsey plan after we paid off our CC debt. We did NOT continue to build savings, start college funds, and pay off our home. 2.) We didn’t cut up our credit cards because we knew we could both restrain from using them. That is, until we got scared. Two years ago the Man took a HUGE step in faith and left his job. We had just had Thing 3. He was a newborn, literally 5 weeks old, when the Man left his job. Without a back up job. That job was tearing us apart and turning him into a man of fear who made his job his idol. We prayed for 7 solid months for God to only open one door for him to walk through. We were afraid we would take the wrong job. Seven months! Out of fear, we started using our credit cards. We had money in our accounts but he had just quit his job in the absolute worst economic climate of our lifetime. No one was crazy enough to walk away from a job during that time. We received confirmation from God that it was time for him to leave and so we obeyed and he left his job two days later. We trusted God to bring us through it, but we used our credit cards just in case. Fear. Fear. Fear.

Do Not Fear! It is the most repeated verse in the Bible. It is said at least 365 times in the Bible. One time for every day of the year. Fear will make you do or not do a lot of things. If we had continued with what God had told us to do in the beginning, pay off our debt (including our home), we would not have used those cards to begin with. Fear took over. We knew about fear. We had faith enough to obey, we had confidence enough that God would provide, but fear allowed us to justify using the cards. *Shaking my head* You could build a sermon around our story. Really. Just cut up the credit cards. If you are going to trust God to pull you through this, then trust God to pull you through.

Now that you have shredded your plastic let’s make a plan. I am a person who likes simple organization. I don’t like complicated things that take me forever to figure out or put together. The simpler, the better. What that means for you is that you are going to build a debt buster plan from the very same spreadsheet you created your budget from. I like to see an immediate picture, an overall picture, and a future outline of what and when. This is a snap shot of our very first Debt Buster. Again, if you click on the picture it will be enlarged for you.

Screen Shot 2013-02-19 at 10.51.57 PM

The first tab of the Debt Buster Spreadsheet is a summary tab that reflects the total debt for each credit card, the starting balance of each card (start column), the ending balance (current), and the annual percentage rate (APR). To the right of each card (Payment plans) I was using each row to estimate how long it would take to pay off each card with each paycheck. At the bottom of the spreadsheet is a running total showing us how much was left in debt by adding all the ending balances together. Use the formula =sum(Cell number to start adding + cell number to end adding). That formula will auto calculate your totals for you. Why did I include the starting balance of each card? Well, I am a visual person. I need to see progress to feel progress. I hope that makes sense. I need to be able to look back at where we started and say, “Wow! Thank you, Lord!”

The rest of the spreadsheets in the workbook entails a tab for each credit card. We created a column for date payment paid (Date), the amount paid (Payments), and the remaining amount owed. At the top of the tab we noted the starting balance and the annual percentage rate of that particular credit card. As we paid off each card, we turned the tab green to show it was PIF (paid in full). Dave’s plan of attack with credit cards is to start with the smallest debt to the largest. Snowballing the payments into the next debt and the next debt and so on. Thus he calls this step the “debt snowball”. His logic is that getting out of debt is an emotional process not a logical process and seeing debts fall off gives you the momentum to keep going. We have followed his method as a whole, but at times we have cheated to pay off a higher APR debt out of order to the original plan. Choose the method that gives you the most motivation.


This should help you start to visualize and create how you want your debt buster to look like, what you want to see, and what order you want to pay off your debt. Sometimes creating a plan is the hardest part. Hopefully this helped you get over that hurdle and get you on your way. For those who get pay checks every two weeks, there are two times in the year that you get an extra pay check. This month and again in August. As you budget and plan be sure to have those extra pay checks (if you receive them) already accounted for in your debt buster. That is what I like to call chunk change. You can throw it at one debt and make a dent! Take a look at your pay schedules for the rest of the year so you can have a better grasp of it all and can prepare for those moments to throw chunk change at your debt.

I have decided to write a third post in the budget series about what we did with chunks change that would come in from stock, income tax returns, or bonus’. I will also talk about how planning ahead is a life style when you decide to be debt free. Tomorrow I will have a guest blogger, Ashley, share how she is tracking her families’ finances and debt using a binder instead of a computer.

As part of our journey we read a number of books on money. We found that Dave Ramsey’s teachings are some of the best out there.

Finally, one more resource you will want to know about is mint.com. It’s the new online tool that helps you keep track of all of your accounts, spending, and debt automatically. Go to Mint to watch the video and see if it’s something that could be your solution.

I am here to offer suggestions and encouragement in this journey. I can show you how we did it and what worked for us, but in the end, it is yours to play with and make your own. Please feel free to come to me with questions and suggestions.

I love to hear from my readers. Sometimes there are crickets out there. If you haven’t yet, please sign up to have my posts sent directly to your email account. The field to do so is directly under the Mommy Blogger Button!


4 thoughts on “Budget Series Part 2: Creating a Debt Buster

  1. You are so right! We were on the Dave Ramsey boat last year and fell off. Neither of us have credit cards. Our wonderful ex-spouses took the easy way out and didn’t pay for their portion of the debt or filed for bankruptcy. So my husband and I are clearing up past debt. It can be frustrating at times. I left my job in September of last year. I have panic attacks that I cannot control and it was too much for the workplace. I am the bookkeeper for my husband’s business now, but it’s not a full time position. For me, I get so frustrated because I want everything fixed here and now. I’m realizing that is the beauty of developing as a Christian. Everything happens in God’s timing. This is why I am giving it another shot. I think our hardest part is that we both have things we don’t want to give up. For the husband, it’s cable. For me, it’s having dinner at a restaurant. We just haven’t found that balance. Hoping that with prayer God will balance us out. I bought my dream car last year. A red Mercedes C230K with black tinted windows…I mean it was a beauty. But I made the sacrifice and sold it so that I could quit my job and not be so “worldly”. I had a car that was paid for before it, but I wanted more. And I think that’s the problem! Society says we “need” more!! One way or another, we will knock this debt out! I’m bound and determined. Thank you so much for posting this blog. I’m thankful I found your Instagram page! I will pray for the ones who read your post that they may find a way to become more financially independent. Thanks for adding me into your blog! Many blessings! P.S. I haven’t owned a credit card in 5 years!! And I’ve survived! You can too!

    • Praise God, Ashley! 5 years!!! That’s so awesome! Believing & praying for your mountain of debt (I always call it a mountain no matter how small) will be moved & knocked out in Jesus name! You two can do this together with God’s help!

      • Yes!! It’s been that long! I remember going to the gas station one day and was thinking to myself, “oh, I have a credit card, let’s not only buy gas, but lets go in and grab some snacks and drinks”. I was paying 29% interest because it was my first and only Visa credit card. My other credit cards were for large retailers. Granted I didn’t have much in debt, it has bit me in the butt (divorce), and I am paying for all of them now. My new husband and I do not want a credit card. So happy to be in a relationship with a God fearing man that has the same views as me! Do you have the debit card holder for the Dave Ramsey kit? That thing works miracles!!!!! I have to think about my purchase before I buy something. That’s how I quit going to Chickfila every single day! We still have a long way to go, but faith in God and listening to His guidance will get us there!
        Love in Christ, Ashley

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