We’re DEBT FREE! Now What?

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This post is part of Our Journey to Become Debt Free series. To see the others, please click here.

Let me just repeat this from my last debt free journey post (which can be seen here)–

“That means that yes, except for our mortgage, we are now DEBT FREE!!!”

Ahh! Like I said in my very first post of Our Journey to Become Debt Free, our goal is for me to be a Stay at Home Mom. So guess what, I’m now home full time with my 2 year old ball of energy. Of course, since my Etsy shop Aqua Anchor Designs has been doing so well, especially during the holiday rush I just made it through, I’m more like a work at home/stay at home Mama. But you get my point.

It’s surreal reaching this goal we’ve worked toward for nearly 2 years though. In 23 months, we paid off $23,491.25  in debt!

So surreal, I was afraid to quit my job. I kept telling Clint, but what if this, or what if that. I’ve told you, I’m a worrier.

But now I need something new to focus my busy mind on. And I’m a goals kinda gal. So we’ve decided to not let our momentum down and keep trucking it and set some new goals for ourselves. I mean, really, the last two years has not felt that depriving to us. We still eat out, more than we should, and we’ve been on two weekend trips since then.

Here is a little brainstorming we did to help us set our new goal(s):

  • We want Baby Girl to be born debt free.
  • We need a Fully Funded Emergency Fund.
  • We want to do some maintenance/upkeep on our home.
  • We may want to pay extra on our mortgage and/or save up for a downpayment on a bigger home.
  • We may want to save up for a vacation soon.

So we know these things now… we just have to make a plan of what order we want to do them in and how we’re going to do them.

For now, Baby Girl being born debt free is first and foremost. We’re praying that my shop income over the next few
months will build up enough savings to make that possible. Once that’s done, we’ll most likely focus on our Emergency Fund.

Do you set financial goals for yourself/your family? What do you do when you reach them: celebrate, make new goals, etc?

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Month 15-18 of Our Journey to Become Debt Free: March-June 2014

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This post is part of Our Journey to Become Debt Free series. To see the others, please click here.

Money, money, money! Let’s talk finances! Our finances have seen a lot of changes this year.

As you know from this post, I quit my full time job in January and started a part time one in February making around $800-$1000 less per month. And then.. you got no more updates about Our Journey to Become Debt Free. I would love to break down each individual month for you, but since that would several weeks, I’m just going to do it in 2 parts. 😉

If you’ll go back and read our Month 14 – February 2014 post, it may refresh your memory a little.

MONTH 15 – MARCH 2014: March is when the “part time” income really started to affect us. We only paid down $491 that month and $234 is our regularly budgeted amount- so really NOT MUCH. That brought the balance down to $6,765.27.

Through June 2014

MONTH 16-18 – APRIL –JUNE 2014: With a little overspending and a little extra money being put aside for the next baby, we were only about to make the budgeted $234 payments on the Civic each month for these 3 months. In June, the balance was $6,109.84. Even so, we had paid off over $17,000 in 18 months at this point.

Monthly through June 2014

BUT in June, my Etsy shop Aqua Anchor Designs started to pick up and finally started showing a profit! At first, I was really scared to touch the money. I thought it was just a fluke and if I drained it, I’d be pulling from our personal budget the next month. Finally, Clint suggested that I should make a Baby Emergency Fund the shop, just in case I had a bad month or something, so we weren’t pulling money from our personal budget. I’d tell you a little more about that next week.

Things are about to get exciting… but I’ll get you updated from July to November in next week’s post. 😉

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Month 14 of Our Journey to Become Debt Free: February 2014

Debt Totals through February 2014
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I’m a little late with this post, but Happy March! 🙂 Our February finances were only partially affected by my new part-time job, so we still made pretty decent progress. Our budgeted snowball amount for March looks pretty meek compared with what we’ve been doing. BUT, I am home with my little boy 2 days out of the week that I would not have been, so I’ll happily take it.

Here’s what we look like on our Monthly Snowball Totals:

Snowball Total through February

Like I said, don’t look for March to be as high next month. And here are our debt balances as of now:

Debt Totals through February 2014

So we paid the Civic down another $1,134 and are currently sitting at $7,242.71. That totals to 69% of our debt paid off. Yay!

If you’ll remember, I had set another small goal for us to have the Civic down to at least $7,000 by the end of March. We got this!

Not only do we have less income coming in now, but we’re also thinking of beefing up our $1,000 Baby Emergency Fund a  little bit. Our reasoning behind this is normally we have an extra $1,500 or so a month so if something did come up it was usually cash flowed through our budget. Being that we’re only going to have an extra $300 or so every month now, we feel like it would give us a little more security to have some extra. I’m not really sure when we’ll become “debt free” now though. Things are changing and I’m just so blessed that I have this opportunity to cut our income and be home more.

Our groceries came to $440.15 for the month. I am determined to get this D..O..W..N! Maybe March will be the month? We also went over in our clothing, eating out, and entertainment budgets by $25.70. We really need to get a handle on things like this now. We’re trying really hard to keep ourselves in check, but it’s HARD!

The CR-V also had some work done to it in February. It was leaking oil and had gasoline in the oil. It was in the shop about a half a day and cost us $190. The amazing thing there is normally when a vehicle needs work, it makes me mad. Somewhat irrational I know, but I think modern technology and we have this newer car and blah blah blah is going out and look at how much it’s going to cost me! Not this time. Instead I thought.. yep we knew buying an older vehicle might need more repairs here and there because some things are just wearing out and that’s okay. I mean at least it was only $190. I’m really excited that I have heat now! The thermostat had gone out so Lucas and I did not have heat on these cold mornings. Yes, Mississippi gets some cold weather too! It’s cold to us anyhow. 🙂

Have you started your Debt Snowball yet? How are you doing in 2014?

Month 13 of Our Journey to Become Debt Free: January 2014

Month 13 of Our Journey to Become Debt Free January 2014
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This post is part of Our Journey to Become Debt Free series. To see the others, please click here
Hello February! 2013 went quick and 2014 is already flying. January was one of those 3 paycheck months for Clint so it looked very good for our Snowballing efforts. We did a decent job overall though.

Here is where we stand on our monthly Snowball totals:

Monthly Snowball Totals

And here are our debt balances:

Debt Balances through January 2014

As you can see, we paid $1,199.07 on the Civic in January. We’re now at 64% of our debt being paid off. Of course, things will slow down now that my income is only going to be half of what it has been.

We came in at $402.57 for the month in Groceries, which is great at right around our $400 budget. We did go $110 total over in eating out, clothing, entertainment and blow money. We did eat out 5 times though so that blew our Eating Out budget by $50 right there. In my defense, one of the meals would have been $25 less, but we had a gift card/coupon error. The other $60 worth was a new to me jacket that I absolutely needed, a Mickey Mouse chair for Lucas, and my first haircut in 18 months. Of course, I can justify almost ever penny of what we “go over”, but I really can’t do that starting NOW.

Speaking of justifying, our weekend trip came in at $570.90. Not bad for staying 2 nights in one of the highest reviewed bed & breakfasts around us.

Other than that, we’re just trucking along here. I’m pretty anxious about the finances right now, since I am starting my new job today. Going from full time income to part time income is scary. I know that He will provide and things will work out one way or another, but I’m still going to be anxious until I get used to things. We are going to have about $800 less a month in income…scary!

How was January on your finances? Have you started your journey to become debt free yet? Any words of wisdom to share with me about my anxiety over finances? 

 

Month 12 of Our Journey to Become Debt Free: December 2013

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This is the 13th post in Our Journey to Become Debt Free. If you would like to read the others, you can find them here

We made it through a whole year! I’m so glad we did not lose steam and kept trucking every month on this journey to become debt free. Clint and I both have pretty short attention spans unless we’re doing something very rewarding.. and this definitely has been rewarding. Of course, it was our hard work that has made it rewarding 😉

I want to do things a little bit differently this month. Instead of posting the “where we stood” at the end of November, I want to tell you about December and all that we’ve accomplished this year.

We did really good in some areas and really bad in some areas in December. I guess that’s life. We spent $516.33 in groceries. We had a few special things with the holidays. I also bought a bunch of Lucas friendly stuff in an attempt to get him to eat more throughout the day. We’re having a hard time getting him to eat food over his milk, so it’s worth it.

We also ate out a lot in December. I mean, a lot! My Etsy store Aqua Anchor Designs was really busy around Christmas so rather than try to cook and make earrings, we just picked up something. We’re bad, I know!

I made payments on Lucas’ hospital bills from back in October of $727.24, all of which were budgeted for. That left $625.68 for us to use as our Snowball. And we most certainly used it!

The $625.68, along with the usual payment of $178, paid off the CR-V!! We made our goal for 2013!! We are SO happy about it!
Now, our only debt left is Clint’s Civic, which is $9,523.59.

So here are our monthly Snowball totals:

Debt Payoff Progress through December 2013

We paid almost $14,000 in debt off just this year! Last December, if you would have told me that we were going to be able to do this well, I would have laughed at you.

Here are are debt balances at the end of 2013:

Debt Totals through December 2013

The bad thing though, is that I have some stuff going on with my job. The position I was in was eliminated so now I’m doing something I don’t particularly want to do. I’ve been trying to decide if I want to just stick it out until we pay off the Civic (which would probably take around a year), get a part time job somewhere (which would take us about 1.5 to 2 years to pay off the Civic) or just go full time somewhere else and pay the Civic off even sooner. If I can get another position, I will probably make more money than I’m currently making. I just don’t want to get something just to keep it temporarily, so if I went full time it would be for the long haul. What would you do? Decisions, decisions!

Clint and I are celebrating the progress we made in 2013 this month. I’ll tell you more about that towards the end of January.

Reaching your goals feels absolutely amazing! Were you able to fulfill your goals in 2013?

 

Don’t forget to enter my giveaway for a chunky scarf or pair of shotgun shell earrings! Deadline to enter is January 7 at 11:59 PM CST. You can find it here.

Month 2 of Our Journey to Become Debt Free: February 2013

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This is the third post of the Becoming Debt Free Series. If you’ve missed any of them, you can find them here.

 

Happy Wednesday!

In February, the pace started to pick up a bit. It was so exciting!

Although we made small payments on both credit cards and payments on the car notes, our total went up from January to February because of debt charged to the credit cards and interest charges. Here’s where we stood at the end of January:

Total Debt Month Ending January 2013

First things first, since we were without living room furniture, I scoured Craigslist every day for a leather living room set. Leather seemed like it would hold up better than the microfiber we previously had with a new baby in the house. I did not want to spend over $400 though, and I did not want furniture someone left outside for their cats to scratch up, so my options were limited in that price range. Finally, I came across a nice set for $250 and it included a nice big glass coffee table. I wasn’t actually interested in the coffee table but I knew I could resell it and I did, for $80. I basically got our new living room set for $170 and I had sold the other set for $600. Not too bad, huh?

We both got our W2’s at the end of January and I completed our tax returns. Since we had Lucas last year, our tax liability had gone way down so we were set to get back $2,774 from federal and $1,136 from state. Right after I filed our taxes, I estimated what our tax liability would be for the next year and we immediately adjusted our withholdings to have less tax taken out of our paychecks. I mean, of course it’s nice to get $3,910 all at once. But can you imagine having another $325 each month throughout the year to pay on debt?

Another big thing in February was our garage sale. As I said in my last debt series post, we had gone through the house and rounded up anything and everything that we did not need or use so it was a pretty good garage sale. Lots of waffle makers and dishes. I can’t remember the exact number, but we made between $300 and $400. $220 of that went directly into our BEF, which completed Baby Step 1.

Now that our BEF was complete (such a great feeling), we could move onto Baby Step 2: Pay off all debt using the Debt Snowball. By all debt, Dave Ramsey means everything but your mortgage. The idea here is to pay off all of your debt from the smallest balance to the largest balance. I know it’s weird, but we didn’t take any interest rates into consideration. Dave Ramsey says that 80% of debt payoff is behavior and I completely believe that. You want to pay off your smallest debts first so that you build up motivation and momentum and get excited about paying off debt.

Using our newly scrutinized budget created in Baby Step 0.3 and entered into our handy dandy YNAB software, we knew that we should be able to use our “extra” $45 every month to go towards our Snowball. We knew $45 wasn’t much though but we were working on cutting other items in our budget. We were realistic in our budgeting though, we knew there was no point budgeting $300 for groceries if we knew we were really going to spend $500. Our grocery budget was one of the biggest ones we needed to cut. In 2012, I spent anywhere from $500 to $800 a month of groceries. That is WAY too much for 2 people. In February, I got it down to $473.37. Go me!

Another thing we considered was that once we did pay off some of the different debts that it would free up those monthly payments we were making on them and that money would be available for the Snowball. Oh, and February was our first month without a Cable bill. I did not miss spending that $50 one bit.

When our tax refunds came in, we paid off the American Express and Lucas’ surgery, which were our two lowest debts. We also made a $70 payment and redeemed $25.35 in reward points towards the Chase. It felt amazing!!

Do you get a large tax refund every year? Do you use it to pay off debts or in a needed area?

 

I hope you’ll be back next week as I share our March 2013 report in Our Journey to Become Debt Free.

This post contains affiliate links. 

Month 1 of Our Journey to Become Debt Free {January 2013}

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This is the second post of the Becoming Debt-Free Series. If you’ve missed any of them, you can find them here.

I think people need goals in life. Our goal is for me to be a SAHM. After I finished reading [amazon-product text=”The Total Money Makeover” type=”text”]159555078X[/amazon-product], in December of 2012, Clint and I agreed to start Dave Ramsey’s program at the beginning of the new year.  At the end of 2012, we had $26,652.92 in debt, not including our mortgage.

That’s almost $30,000!

Here’s the breakdown:

2012

Dave Ramsey’s program is broken into Baby Steps. There are actually 7 primary Baby Steps, the first of which is to save and set aside a $1,000 Baby Emergency Fund. Before we could do that though, there were a few other things we had to tend to. The baby steps can be further expanded upon, and these are the pre-Step 1’s:

pre-step1

Most of these we already had covered before starting. We did lower our retirement contributions, but did not stop them and we did cut cable and have cut down on all of the extras like eating out and buying nice gifts for each other at holidays. Yes, I said it, we cut our cable off – and we love it!

We worked on completing Baby Step 1 in January so it wasn’t a big month in terms of paying down debt, but it was huge for us because it was the first month that we really and truly focused on where our money was going.  I’ve always been a budget fanatic and had a frugal mentality to some extent, but I’m also impulsive and impatient, as is Clint. When we want something, we get it. So in January, we really tried to not give in to those emotions and only spend the money we actually had and was budgeted.

We didn’t do great, we still created more debt. It’s really hard when you are used to spending money and living above your means, to just stop. We added another $595.30 in charges to our credit cards in January.

We definitely did not beat ourselves up, though. We were getting things in order, we were learning to live within our means, and it would take some time—we accepted that. Although we did charge some things to credit cards, we were busy busy making cash to fund our $1,000 Baby Emergency Fund, or BEF for short. Here’s what we did:

  • Set aside a measly $40 from the budget
  • Sold a name brand purse for $40
  • Sold a gaming system for $50
  • Sold our living room furniture for $600
  • Sold a dining room table for $30
  • Sold a wicker chair for $20

This brought our BEF to a total of $780, only $220 more to go.

At this point we had a bean bag and rocking chair in the living room as our furniture to watch our Netflix and Hulu since we had no cable. We were also going through the house rounding up anything and everything that we didn’t need or use to be sold in the Garage Sale we were having in February. Things were starting to get fun!

I hope you’ll be back each Wednesday to see the progress we’ve made this year. If you’re interested in learning more about Dave Ramsey’s Baby Steps, check out [amazon-product text=”The Total Money Makeover” type=”text”]159555078X[/amazon-product]. Are you ready to become debt free? What is your goal or motivation to do it?

 

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