Month 4 of Our Journey to Become Debt Free: April 2013

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This is the fifth post in Our Journey to Become Debt Free series. To read more of them, visit this page.

 

April was a good month for our debt free journey. Nothing special happened, but we were able to Snowball a pretty good chunk of money by sticking to our budget. Here’s a rundown of what we’d contributed to our debt payoff through March:

Debt Payoff Progress through March 2013

And here’s where we stood at the end of March:

Debt Balances through March 2013

In April, I had to pay the final $50 to close out our contract with Dish Network now that we had returned all of the equipment to them. Since I had decided I wanted to keep groceries around $440, it had pretty much been a breeze. In April, I spent $442.80 on groceries. Of course, I estimated what I really thought we could do, but I was very pleased with our ability to stay within the $440 budget.

We added another line item to our budget in April. It’s what we refer to as “Blow” money. Basically, it’s a weekly or monthly allowance of a certain amount that you can kind of spend on whatever you want. We were already spending the money, so we hoped that by creating a budget item for it and limiting it to a certain amount would help with some of the frivolous spending. We decided on $160 for the month, which was $20 each per week.

The stomach issues I went to the doctor for in March ended in a Colonoscopy in April, so we paid $598.17 towards that, mainly using the leftover $515.74 from March’s Snowball.

We were also able to make a $664.27 payment on the Chase and redeem points for a $25.98 bill credit. That brought our Chase down another $690.25!

Isn’t it crazy?! A few months earlier we were adding to our credit card debt every month and now we’re making $500 and $700 payments on those credit cards every month!

Do you have a realistic budget? Would you benefit from budgeting software like YNAB ($6 off here)? What’s keeping you in debt?

 

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4 thoughts on “Month 4 of Our Journey to Become Debt Free: April 2013

  1. The most impressive thing I see with your debt payoff progress is that the payoff amounts kept getting higher and higher each month. I’d love to see that kind of progress for us. I’d say the biggest thing that keeps us in credit card debt is the Husband’s work travel. Every company he’s worked for required us to use our own card and wait for him to submit expenses to get paid. And he’s so busy that it often takes him a month or more to submit those expenses…which means thousands of dollars a month that we finance for him to do his job. I absolutely hate it.

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    • Sara Herrin

      I guess you’re right. I hadn’t even really noticed. Thanks for pointing that out 😉

      Oh man, though, the credit card thing would drive me absolutely crazy!

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  2. Years ago I found myself with 2 student loans and some credit card debt on a couple of cards. I followed a tip given by a coworker, and it helped me get debt free (other than my mortgage) and I’ve stuck to it now for 20 years.

    The tip was to put pay just the minimum payment on all of the loans/credit cards except the highest interest one. Put all of the excess on that credit card/loan to get it paid off as soon as possible. As soon as that one is paid off, then pick the next highest interest rate one and add what you were paying each month to the one you just closed to that one, plus the minimum payment you were already paying on that card. Once that is paid off, repeat with the next highest card and keep going to they are all paid off. I actually used an amortization schedule (I did it manually but you could find an online calculator) to figure out when I would have the one I was working on paid off if I stayed on schedule every month plus put my tax return towards it. It was helpful to be able to see the end of the tunnel and scratch one debt off the list at a time…it helped me see the progress I was making.

    Since then, I pay off everything in full every month. I buy my cars with cash.

    If I can’t afford something, I don’t buy it!

    It helps that I don’t live on a tight budget, but part of that is because I am not a shopper and I purposely choose housing/cars that don’t stretch my budget. I buy 1-2 year old cars and last year I even moved to a house that was $100k cheaper than my last house. Feels really good to know there is extra money available when I do have something I want.

    Good for you for getting yourself out of debt!

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    • Sara Herrin

      That’s great Karen! I am looking forward to the days of being able to pay for everything in cash. One day…

      I know some people do the interest thing and it works great for them. Dave Ramsey prefers the lowest to highest balance so you can quickly pay off the smaller debts and (hopefully) gain momentum to keep going from the psychological aspect of it. Thanks so much for the encouragement!

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