The Dream Budget: Your Debt Free Potential! What’s Yours?

Dream Budget

EOD Deluxe Budget 3.0 - In progress!

 

What is the “Dream” Budget?

I have referred to this before in earlier posts, but I have never actually written a post about it. Basically a dream budget is the budget you would have IF you were completely debt free. That’s right, no car payment! No mortgage payment! No credit card payments! No debt at all!

I always ask my Financial Peace University classes to do a dream budget. I believe that when you see how much you could do without debt in your life, it will inspire and motivate you to set that goal. This exercise should not take you long at all.

Keep it simple…

  • Post your monthly income at the top
  • Budget utilities, food, transportation costs, and any other necessities
  • What’s left over?

(I realize you are probably thinking “we will be spending a little more than necessity”. TRUE – but the purpose of this exercise is to show you your maximum potential.)

HOW MUCH DISPOSABLE INCOME WOULD YOU HAVE TO SAVE, INVEST, AND GIVE??

Being DEBT FREE is better than having payments! Payments weigh you down! They steal your potential! They steal your hope! Payments fool you to believe that debt is the ONLY way!  You are under a spell.

It’s not the only way, and you owe it to yourself to try something else! Don’t accept the status quo any longer. It’s COOLER to be debt free! Credit cards are the new overgrown 80′s mullet, and more and more people are starting to say “What was I thinking”? Yeah I had both, but I also cut them both! And yes…WHAT was I thinking?

Debt free is the new you!! A you, that will laugh harder, sleep better, and enjoy life that much more! It’s the YOU, you can’t REFUSE!

Cut that mullet! I’ve got scissors…big ones. Think smart, think BIG, think DEBT FREE! Get started now. These 12 steps will help you stay focused! If you want to receive updates, go here to subscribe. Thanks and good luck!

About Brad Chaffee

31 Responses to “The Dream Budget: Your Debt Free Potential! What’s Yours?”

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  1. Thanks for the motivation. The amazing thing about being debt free is that you can use your income to help achieve those long term goals. Change your view of debt. Instead of saying “I can’t afford to save” tell yourself “I can’t afford interest payments”.

  2. Jason Kouri says:

    Wow! I could not agree with you more. I cannot believe how much income is freed up that was being paid towards debt. I will never go back to paying anything but cash. I literally want to vomit when I think about using a credit card to finance something because I feel like it is a trap to attempt to snare me. I don’t even want to go there. Thanks for the post! Freedom!

    • Brad Chaffee says:

      @MH4Christians – That’s exactly right Craig!! People need to change how they think! Mindset is everything, and currently people believe debt is the ONLY way. It is the only way….the only way to a life of bondage.

      @jkkouri – Thanks for stopping by Jason! You are living it man! You know first hand the potential you stripped from your life when you HAD debt. How does it feel man? Freedom indeed sir! Congratulations!

  3. KELSALYNN says:

    I could not agree with you more!!! Since paying down our debt, our focus has drastically changed to a more forward-thinking approach. We consider the future as opposed to paying for the past. We set goals and plan for them. We dream. It’s been amazing! Yet when we had $60K of debt, I had no idea how stifling it was… no idea.

    • Brad Chaffee says:

      @Kelsalynn – Paying for the past is no fun at all. The having no idea how much debt holds a person back is the common mistake. So many people have just accepted debt hardship instead of trying different options.

      @budgetsaresexy – Hey man you are so close! No consumer debt, lots of savings, and one pesky mortgage in your way. You are far ahead of the pack, and a great example to people under 30.

      @brianscheur – That’s awesome Brian! That means you’re past half way and moving with tremendous momentum. I like it!

      @TheHappyRock – No mortgage goes on this budget. This is a 100% debt freedom budget including the mortgage. People do not believe they can be completely debt free but I hope that this mindset starts to change. Thanks for stopping by and leaving your thoughts!

  4. Brian says:

    You know, i actually did this not too long ago when i created my current budget. I took all the goals i wanted to achieve, investing (retirement accounts, brokerage accounts), my normal expenditures and inflated them by 20%, and so on. I came up with a number of around $75,000 in net income to live the life i really want to live. A handful more years and hopefully i will be close to that with one job. Right now with 4, i am about 2/3rds of the way there.

  5. Need idea. I might have to do one, although I dream budget would look a lot like the example.

    The only debt that need to be added on is a mortgage and expenses for a small condo.

    Our disposable is almost all being banked for a down payment and a family home.

  6. J. Money says:

    haha, I love it! if only that damn mortgage wasn’t in my way right now ;) good lookin’ out.

  7. Shawanda says:

    This is a great idea. I never really thought of what my dream budget would look like. Besides my credit cards (that I pay off every month), I don’t have any debt.

    Currently, I pay $975 per month for rent which includes electricity and water. I know it will depend on the value of my home along with other factors, but assuming I have absolutely zero debt after I buy a house, I think $975 per month should cover lights, water, property taxes, homeowner’s insurance, repairs, and other miscellaneous housing costs. Perhaps I’m delusional.

    If I owned a home outright and had zero debt, I think I’d be able to live quite well on my current income.

    • Brad Chaffee says:

      That’s the spirit Shawanda! Now you know what you need to do. Run towards the debt free light! I’m running in the same direction! I can’t wait to maximize my potential.

  8. kaitlyn says:

    I AM debt free, and my major goal is to STAY that way. Very motivating post– I never want to see ANY part of my budget sucked down the debt drain!

    • Brad Chaffee says:

      That’s right…stay debt free! You owe it to yourself!

      Compound Interest
      is the reason you should stay debt free, and start saving now! At your age, saving just $2,000 a year for 8 years, then stopping until your 65 would give you about $2,000,000!

  9. Great and motivating idea! If/when we teach FPU again we’ll have to use this idea!

  10. Mama Bird says:

    I have created a dream budget for our family, but with a different twist…our dream budget is for NOW and includes being able to pay down our mortgage (only debt we have) faster AND do all the things we want to do. Why should a dream budget only be for later? I also have the ULTIMATE dream budget for when we do pay off our mortgage. :)

  11. Tina Fortune says:

    Geez…I’m learning so much between you and Baker’s blogs! Finally, I’m TAKING time to sit down and read your posts (instead of on my bb at work) This is GREAT! My budget is very close to yours give or take $500 monthly and I would love to have that $1400 mortgage disappear! I’m creating the dream budget N-O-W!!! I love these fresh ideas!

  12. Lisa Smith says:

    Nice post. this is actually a good idea of having a budget so that every would come to know that how much they are spending on debt for each month . It will be very clear and people can think of something before going into the debt bankrupt.

  13. Jenn says:

    An interesting exercise for sure.

    I don’t see property taxes or home maintenance on this budget. Surely it’s not the $50 “other”? I’ve always heard ~3% of the value of the house is a good rule of thumb for an annual fund for house maintenance. If you live in a wildly expensive (or inexpensive) area that would need to be adjusted up or down. A new roof on two identical homes would cost roughly the same regardless of the land value in different areas. You won’t spend that money every year but eventually you’ll need a new roof, windows, furnace or A/C, major appliances, flooring, etc. If they happen to all need replacing in the same year you’d better be prepared. These are not emergencies, they should be budgetted as expenses that just don’t happen on a monthly basis.

    I’m personally struggling with wanting to sell our home. Our property taxes and utilities total $11k/yr. Even with the mortgage gone we could rent a small apartment with utilities included for that. I can certainly think of lots I could do with the ~$600k I’d get for selling the house and I’d retire now (at 46) rather than at 65. That would more than cover our living expenses for the next 20yrs until we start collecting our government pensions and begin cashing in our retirement savings accounts.

    Paying off our mortgage ASAP is a priority so that we have early retirement options, but to me, sitting “free” in our biggest investment doesn’t really seem to make sense. If I had my way I’d be off travelling so much it wouldn’t matter where I lived, but DH wants to stay in our home until he’s carried out in a box. We clearly have a lot of discussing and negotiating to do… Perhaps doing up a Dream Budget staying in the house and another selling and renting would be a good starting point for discussion.

  14. Betsy says:

    Ok with the budget above is the rent or morgage nothing

    • Brad Chaffee says:

      For the sake of getting people to see what they would have left to save, invest, and give, without a hefty mortgage payment, I suggested leaving the mortgage out. However, if you pay rent and have no desire to buy a home I would suggest leaving it in, since you would be out of debt but technically still have the rent payment to pay. :D

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