We started by paying off all of the higher interest debt first - credit cards, car loan, then each of the student loans. Every paycheck of his (2x month) we put $1000 into our extra loan payments account and $200 into our regular savings account. We also track everything in Quicken... we enter our receipts and itemize them so we can see exactly what we are spending, we have our bills listed so we can see when things are due.
|Graph of our Net worth (March 2008 - May 2011) Green = assets; purple = liabilities; red line graph = net worth|
Our next step is to save up for furniture and other things that we want/need. We're going to try not to buy things on credit. We do use our credit cards for day to day purchases, but we pay them off as soon as they appear on our account.
We are also going to start putting money in our retirement accounts.
This is such a great feeling.