Category Archives: debt

June by the Numbers

This was an interesting (and slightly unexpected) month.

To start with, while the numbers at the end of this post might seem to show otherwise – we have definitely hit the slow portion of the year.  The very first few days of the month, my husband had a slew of freelance jobs pay – resulting in, for all intents and purposes, no outstanding invoices. Meaning – no checks waiting to come in until work picks back up, and more invoices go out. And even when more invoices start going out – it can be a couple of months on average for checks to start coming in.

It was also an odd month in that the way I get paid, is every two weeks.  This means two months out of the year, I get three paychecks in the calendar month. This happens to be one of those months.

To top off the “this is not a normal month” list, we’ve had family in town for a week and a half helping us with a remodel of the garage. Normally, a project of this magnitude would wait until someone is out of Baby Step 2. However, in this case, the HOA is painting all garages this summer and they were going to “just fix” any with rotten wood and charge us.  We thought it would be better to fix it ourselves so that it was done right, and done without having a huge gaping question mark to our home maintenance budget.

Fortunately, we were able to cash flow this project with the unexpected checks that came in at the beginning of the month.  We estimated  high on what the renovation budget would need to be – and ultimately, it didn’t directly affect our normal monthly budget, but it did take way from what we could have paid off.

And so, the numbers:

Extra income: none

Cash flowed to Garage Reno: $2,000

Extra Debt paid: $4,185

Total Debt paid in June: $4,431*

Since 1/1/2012 – Total Debt Paid off: $25,930*

One Major item to note – With this month’s extra debt paid – we are now over the 1/2 mark. Which is terrific since June is the 1/2 point in the year.  It’s so hopeful seeing focus and determination pay off. We might actually make our 2012 goal! We will have to wait and see how the next quarter goes – we’ll certainly get behind on the pace we need to finish – but there is always hope that the 4th quarter will be outstanding and catch us back up.

*For the purpose of Baby step 2 we are not factoring in our home mortgage

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Oops!

I had someone comment about how they are discouraged with where they are at financially and how they felt called to tithe – and how the next few years are still very discouraging.

My WordPress filters stripped it out (due to the email address) as spam. I was planning on coping the comment, pasting it in as a post and then to the best of my ability, responding with the best biblical world view that I could.  Unfortunately, I didn’t realize that WordPress (after a period of time) automatically deletes comments in the spam filter. So I no longer have access to the comment.

I apologize to the commenter, and feel free to comment again (though you may need to use a different email address – the one you used was extremely spammy).  I still may respond to the comment from the best my memory allows, but as the title of this posts states “Oops!” I goofed on that one.  If the commenter is still reading, I was not intending to ignore it forever, I just didn’t have time to respond well yet.

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May by the Numbers

This month was pretty spectacular.  We are so thankful that we got one more amazing month before the actual slowdown hits.

We had very little ‘extra’ income this month.  No Craigslist sales.

This month’s budgeting was a little tight as the way refueling fell in the calendar – we both needed gas for our vehicles on the 29th, pushing us over that line item.  We had out-of-town company for a handful of days – but were pretty pleased that we were able to save on the other weeks so as to eat out with our company and not go over on the food budget.  We were under by an entire $7. 🙂

As far as progress – like I mentioned, the slowdown hasn’t hit yet so when some large jobs finished up (having already prepared for the next few slow months) we were able to make the FIRST EVER above minimum on our last remaining Major Debt – my grad school student loan.

Without further ado – the numbers:

Extra income:

We won a $100 Amex gift card

Extra Debt paid: $3,794

Total Debt paid in May: $4,040*

Since 1/1/2012 – Total Debt Paid off: $21,499*

*For the purpose of Baby step 2 we are not factoring in our home mortgage

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I Was Wrong

I was pleasantly surprised to learn that I was a little off on my time line.  Turns out – middle of May is when the slow down starts for the self-employed one.  That means, in May, we still have large invoices going out, and healthy checks coming in.

The slowdown in income comes about a month or so after the slowdown in work.  We’ve been little worker ants storing up for the slow months, so we aren’t worried about that for our typical monthly budget. Really this just affected when and how much extra we can pay on debt.

I won’t have the final numbers until the end of the month, but it will be better than expected. Mt. Doom is not quite looming over us yet. Apparently, that will start next month.

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Come on – you knew it would happen at some point…

Can I experiencing anything in life and not draw parallels from Lord of the Rings? Probably not.

I was thinking about going with a Mt. Rainier climbing expedition as my example, but before prattling on about different base-camps, distances, and such, I would have needed to do research.  For me – no additional research needed for LOTR.

So, lets face it, the first 4 months were phenomenal.  In January, we had some 2011 carryover money that produced momentum. February through April, we had extra funds come in from big jobs, we had off the charts Craigslist sales, and we scratched out what felt like a multitude of small little orcs that were nipping at our heals. After that we had a hefty HVAC that took longer than we expected, but still – somewhat manageable on momentum and hope alone.

NOW, we get to the difficult part.  Similar to Frodo and the Fellowship which soon became just Frodo and Sam – it was a difficult journey, but doable.  With friendship and supplies, energy and hope, they managed.  But at some point, they got through the walls of Mordor and stared out at the wasteland in front of them, and up at the looming Mt. Doom.

It’s at this point in the story that I feel we find ourselves.  We are staring out at the wasteland called “My Graduate School Loan.”  It’s the biggest amount we owe.  It has the highest interest rate.  When we pay – it feels like most money goes toward interest, and just a little leftover drivel hits the principle.

Added to this we are in May, 30 days from June. From past history, this is the ‘slow time of year’ for my husband.

What will be our lembus bread and memories of the taste of strawberries?  What will keep us going? Probably the Dave Ramsey Show, seeing the eventual tipping of the scales on principle to interest, as well as encouraging words from friends.

This little hobbit is ready to be off riding on the back of an Eagle, seeing Mt. Doom fade in the distance.  But that my friends is still months off.

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April by the Numbers

Last month I commented that we were not going to keep the same pace – as we are running out of things to sell (true – we sold nothing this month).

Then I mentioned that we were really pumped because on the self-employed front, a large job that we’ve been waiting for closed. But we also had taxes coming.

Then our washer broke and we got a new one.

SO – how did it all play out for the numbers? Really well, actually. I’m totally stoked to report this month. So first the numbers, and then a little commentary.

The Numbers

Extra income: $0

Extra items we had to squeeze into the family budget:

A Washer – $467 (three cheers for Scratch & Dent stores!)

An MRI – $612 (Yeah for FSA/Insurance? Thankfully, the entire amount was not out-of-pocket. Still – this is a hefty unexpected amount.)

Had we not had a large job finish – we would have had to reach back to the emergency fund for these two items. Instead, we were able to cash flow them right into this month’s budget.

Extra Debt paid: (drum roll….) $6,338 (boom! that’s right. HVAC – Buh-bye!)

Total Debt paid in April: $6,818*

Since 1/1/2012 – Total Debt Paid off: $17, 459*

(If you’ve been following along at home, I had to update some of the old numbers. Did my math wrong in January, which threw everything else off)

Basically, April Rocked!

The Commentary
I must point credit where due. Yes, we work hard sticking to a budget, not spending, and forcing ourselves to send extra dollars to debt. BUT ultimately, it’s all due to the Grace of God. He is our provider. This is most obviously seen in the jobs that come in for my hubby (like the big one that allowed this month’s payoff). It’s seen a little more subtly in the fact that I even have a job (lest I forget that last year, I was unemployed for 9 months).

The overriding reason that we are even doing this debt goal in the first place is to be better stewards of our money. To be able to, eventually, give more away. Throughout this entire debt free process, we continue to tithe faithfully, as well as stay committed to a few individuals we’ve promised to support.

Believe you me, it’s always tempting to just skip tithing and throw it at debt. “I can pay you back God – when I am out of debt like you want me to be” (in the past as a single person, I’m embarrassed to admit I would occasionally fall into this false thinking).

Thankfully, this time around, we are doing this through the lens of truth, giving back to our Provider first and foremost, before the other dollars are dispersed in the budget, before the overflow going to debt.

*For the purpose of Baby step 2 we are not factoring in our home mortgage

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Man Down!

Ok, not a man, but a machine.  Our washer broke. It’s a pretty low-end washer and our attempt to see if the drain was just plugged failed.  Because it’s so low-end, we’re pretty sure to pay someone to look at it and fix it will cost more than a replacement.  So – we are in the market for a washer.

Shoot! That’s a debt free setback, BUT thanks to our Emergency fund and general budgeting, NOT a crisis.

And the previous mentioned big payoff – still in the works, in spite of this sidestep.

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Sneak Peek

So we don’t have the numbers yet – but this month is going to be AWESOME!

One half of our household is self-employed – which at times means waiting a while before a big check from a job comes through.  A couple of month wait is over for one particular job.

As you know – taxes are due this month as well, so we’ve been busy making sure those were paid.

Once all the dust settles, and all the checks clear, we are super excited to see what this month’s extra debt payout will be.  Stay tuned for the details!

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Paying Double

One of the fundamental parts of our Debt Free in 2012 goal is making and sticking to a firm budget.  As Dave Ramsey says “Spend every dollar on paper before the month begins.”

As we’ve been doing this for three months now, we found that we have more money that we realized.  Instead of a few dollars here, a few dollars there, slipping through the cracks, every dollar has an assignment.  Once the essentials are assigned, we have more than we would have first imagined to work with on everything else.

In some ways our budget drives me CRAZY!  Take this line item for example: Tax Preparation (not even the actual taxes, but fees for someone to help us prepare our taxes).  I HATE this one.  Why? Because every month, we set a side money for Tax Preparation 2013.  AND on top of that – we had to set aside a large, lump sum in March for Tax Preparation 2012.

GRRRRR! Feels like we are paying Double!  What do you mean we have to pay for something this year AND plan for next year!?!  What do you mean we can’t take that monthly amount for 2013 and put it toward something more fun (like movies!) or more ‘important’ like the Debt Snowball!?!

Well… that would be nice – (especially while we are full throttle debt paying machines, I’d love to put it toward debt!) – BUT next year. When March/April comes around. There will be no lump sum line item in the budget for 2013.  There will be a lump sum extraction from our savings – and direct payment toward Tax Preparation.  AND then, I’ll be a happy camper.

Which is just one small example of why planning now, working hard and paying off debt now, will pay off. 

I’m not even sure how to dream with what we can do with the former “Set aside from the March Income a Large Tax Prep fee” money that we will no longer need to set aside…. And if all goes well – we won’t need any dollar of that to put toward debt since by March of 2013, we’ll be debt free.

Hummm…. Imagine that.  Dreaming, Hoping, and Planning to make it happen.

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March by the Numbers

3 months in.

Extra debt paid off in March – chipping away at the HVAC – $2,293

I’m not sure we will be able to maintain this pace for all of 2012!  Not in regards to keeping our budget tight (that is a requirement) but more in terms of we are running out of things to sell. 🙂

Our extra income this month was very nice.

Craigslist Sales: $580

Refund from our old home loan Escrow: $842

Totaling $1,422 extra dollars of income.

We stayed in budget (actually were under) in the food department.  I’m convinced this will be the most difficult category to stay in bounds on.  It takes a lot of planning, knowing when we have dinners out coming up and setting aside the amount we’ll need. It takes away a lot of spontaneity, but so far, we are managing.

This month we were able to go out to eat with some family that were in town yesterday, and tonight, I’m going to a birthday party.  Here the last day of the month, and food money is available. It’s hard work for sure, but it feels great.

One other note – while doing all of this, we are also setting aside money for things like Christmas gifts, and car repairs.  We stick them in the savings account.  This morning I noticed a whopping $1.06 in interest!  Not a lot, but wow – it sure feels great to have interest working in our favor for once!

So the final numbers for the month:

Total Debt paid in March: $2,779*

Since 1/1/2012 – Total Debt Paid off: $10,641*

*For the purpose of Baby step 2 we are not factoring in our home mortgage

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