Our Debt Snowball – August

8 months = $18,412.37 in debt paid off

In January of this year we started our Debt Snowball, partially following Dave Ramsey’s method.  To see the beginning of our journey click here.  This was the year that we hoped to find our home, so by paying down our existing debt we knew we would be able to afford more house.

We are still on Step 2, which can last for months, even years.  During this step,  you make a list of all of your debts from smallest to largest.  You don’t pay attention to interest rates or anything other than total pay off amount.  Then, you tackle the smallest debt first.  You make the minimum payment on everything except for that smallest debt.  On the smallest debt you scrounge around and scrub your budget, every extra dollar gets put onto that debt, until it is paid off in full.  Once you have tackled one, then you move on to the second smallest debt.

In these past 8 months we have been able to pay off 2 student loans, 2 credit cards and a car loan.  Let’s just reflect on that for a minute…5 monthly payments eliminated!  Some months we are able to contribute more, other months are tight and we contribute very little.  But every small bit adds up, so it still feels good.

This month we contributed $1,855 to the debt snowball and then added an additional $2,000 from savings.  Normally we don’t tap into our savings since that is our house down payment, but this month was a little different.

Since it has been 8 months, and we are starting to get serious about starting our house search again, it was time to re-evaluate our current monthly payments.  After checking in with our balances, I realized that what we were currently putting the “snowball” towards was not the smallest balance.  We had a student loan, which had a monthly payment of $262, with only a $2,753 balance left.  By taking the money out of savings, we were able to eliminate that loan completely, meaning that monthly we are now adding $262 into our snowball.

Now that we have re-evaluated what the balances of our remaining debts are, we have a new game plan of what to attack first.  But again, let’s reflect.  We have eliminated 5 debts!  We have paid off $18,412 in debt!  It’s amazing and rewarding to see it working.  Each month we see that amount grow and grow and it becomes that much more motivating.

September will be a tricky one for us.  My husband returns to work after labor day, with a 3 week unpaid hiatus.   He is also returning to a job that does not pay as much as his previous monthly income.  But we are rolling with it, and reminding ourselves that even if we only contribute a little bit each month, it is getting us that much closer to financial freedom.  At least until we sign that mortgage!

Some tips we like to remember when times are tight:

  1. Eat at home instead of in restaurants
  2. Make meal plans so we are spending less and using all of the food we purchase
  3. Pack our lunches for work
  4. After receiving a paycheck pay all the bills upfront that are due before the next pay period to avoid annoying late fees or over draft fees
  5. Only use our bank ATM’s to avoid transaction fees
  6. Eliminate credit card charges, use only cash on hand.  If we don’t have it, then we can’t afford it!
  7. Maintain our $1,000 emergency fund for true emergencies
  8. Make a budget and stick to it!

8 months = $18,412.37 in debt paid off

Erin Condren Life Planner – February 22nd-28th

Hello!  Back from a short hiatus, lots of happenings going on around here!  I did my favorite kind of shopping this weekend, gift card and coupons in hand…spend $0 of my own money!  They BEST!  And I got all kinds of cute things at the dollar spot at Target:

Target goodies!

Among my haul were Easter Stickers, stamps, 2 packs of Gel Pens, adorable little clothes pins and binder clips.  My favorite was this phrase it stamp set:

Phrase Stamp set from Target, $3 bargain!
Comes with a blank ink pad and everything, target bonus!

I used my own stamp pads, but for $3 it was a total bargain!  Perfect for my Erin Condren planner.

Here is the blank weekly spread:

Blank Spread – February 22nd – Erin Condren Life Planner

Definitely loving the winter we have had, it was in the mid 50’s all weekend, and it’s not even March!  So I was channeling Spring for my layout again.  I started with some fun Teal Washi Tape from…yep, Target.  And then I used the Phrase Stamp set to add a few highlights, and then just added in a few fun springy stickers.

Layout before the writing, Washi Tape and Stickers

A little closeup because I really do love the Phrase Stamp so much, I’m already getting my $3 worth!  And I didn’t even have to spend any money thanks to gift cards!

Closeup with Stamping

And I added my new Gold Butterfly clip, such a simple but elegant touch.  I love it.

Ready to start the week off! – Erin Condren Life Planner

We are also so excited that we can finally see our Debt Snowball paying off!!  We made our final payment on the first loan we tackled this weekend.  It is an incredible feeling!  Check out the beginning of our journey here.  I will be updating again in a few weeks to share how the first two months have gone.

Well, we are gearing up for another busy busy week here.  Hope you all have a great one!

Our Debt Snowball – January

This is the year that we, fingers crossed, find the right place and purchase a home.  Since it’s taking us a lot of time looking we decided that we really needed to start this year off by tackling some of the debt that we already have before we take on an immense amount with a mortgage.  We have a down payment saved, and want to continue to grow that, but we have student loans, two car payments and some credit card debt already racked up.

I borrowed a copy of Dave Ramsey’s The Total Money Makeover from my sister and started doing some research.

The Total Money Makeover

Dave breaks his process down into “baby steps” which makes them easier to attain.  As you get the sense of accomplishment from each step, you are more likely to build your momentum and keep going.

We are not following his method to the T, but are using many of his suggestions.  The first “Baby step” is to put aside an emergency fund of $1,000.  Fortunately this was something we had already completed, so we were able to move on to step 2.

Step 2 can last for months, even years.  This is where the debt snowball comes into play.  You make a list of all of your debts from smallest to largest.  Don’t pay attention to interest rates or anything other than total pay off amount.  Then, you tackle the smallest debt first.  You make the minimum payment on everything except for that smallest debt.  On the smallest debt you scrounge around and scrub your budget, every extra dollar gets put onto that debt, until it is paid off in full.  Once you have tackled one, then you move on to the second smallest debt.

Here is where the snowball starts to grow.  Now on your second debt you are paying what you normally would, plus what you would have been paying monthly on the debt that you just paid off, as well as any extra left over in the budget.  As each debt is paid down, you combine what you would have been paying onto the next loan.

One suggestion Dave does make, which we are not using, is to take all of your savings, minus the $1,000 emergency fund, and apply it to debt.  Since we have been saving for a house, and are actively on the hunt, we will not be doing that part.  But each month we are scrubbing our budget and applying all of the extra to our smallest debt.  I can already see it working!

As of January 1st, the debt we started with was a student loan with a balance of $2,993.52  The monthly payments are $127.28.  This month we were able to pay a total of $1,520 bringing the balance down to $1,485.16 (this included the interest that was accrued).  We tackled more than half of it in one month!  I can’t believe it.  Nothing has changed with our income, so this is all money that was there, we just had to find it.  Here are some of the tips that we found worked.

  1.  List all reoccurring monthly payments, by the date they are due.
  2. After receiving each paycheck, use the list of payments and pay every bill, upfront, that will be due before the next check comes in.  This avoids all late fees, and over spending.
  3. Really use a budget, account for every dollar!
  4. Make a weekly meal plan and stick to it!
  5. Limit the need for “Take out” or restaurant meals
  6. Pack lunches.
  7. Limit “extras” (coffee stops, etc.) for the use of gift cards only!
  8. Eliminate credit card charges
  9. Only use our bank ATM’s, eliminating service charges.

By following these few steps were were able to come up with a ton of extra $$ to really get our debt snowball rolling.  I can’t guarantee that it will always be that much each month, but the satisfaction is already there as I see our debt lower.  I can’t wait to cross this first one off the list!

Having the emergency fund is also important.  This month we did end up with an unexpected $275 vet charge, but it wasn’t too stressed since I knew the $1,000 was there.  Now we will replenish that fund prior to adding extra into the snowball.

We definitely won’t be able to pay our debt off prior to settling on a house, but I think we are off to a great start and I’m excited to see where it takes us.  I’ll keep you all updated at the end of each month!

1 month = $1,520 in debt paid off

Bill Payment Checklist and Budgeting

After my husband and I decided this was really the year to buckle down and start saving for a down payment on a house, we knew that we had to really get a handle on our budget.  We’ve always been a little loosey goosey, generally knowing how much we spend, generally knowing how much we can afford, generally knowing when bills were due, but no solid set in stone plan to follow.
Between the two of us we have too many student loans, car payments, insurance payment, and regular bills to keep track of in my head.  Every few days I would check in to see what bills were due, did I forget anything, over look a due date?  Some bills come out through automatic withdrawal, but I don’t like to do that with everything.  When we became serious about saving I knew that I needed a better system.
I looked around to see what options are out there.  There are all kinds off Bill Pay Checklists, most of them are free.  I found two that I prefer.  One come from A Mom’s Take.  

Free Printable Bill Pay Checklist from A Mom’s Take

It is a free printable, for the whole year, and is nice and colorful.  This is my monthly go-to guide.  I write down all of our bills in order they are due, how much the bill is for, and I check it off each month once paid.  I’ve said it before, I’m a list person.  Having this physical piece of paper as a list is hugely helpful to me.
Another one that I like is from My Frugal Home.  This one is very similar, still a free printable, but it’s also editable on the computer.

Printable and Editable Bill Pay Checklist – From My Frugal Home

I like that this one is editable on the computer.  Each month I just need to open the pdf and electronically check off each bill as I pay it.
Something else that we have found extremely helpful for budgeting, is to pay all bills that are due within a time period right as we get paid.  So even if we are paying the bill before it is due, we pay everything that we know will be due before the next income check, right up front.  That way we know how much we have to push into savings, and don’t over spend on the little things.
Keeping track of what we have in savings, and watching it slowly increase has also been rewarding in and of itself.  What are your tips for keeping track of expenses and bills?  How do you budget throughout the month?

Meal Planning and Back to School Routine

We just returned from our week long summer vacation on the coast of Maine.  It was a wonderful mix of relaxation and small day trips.  A perfect break from the usual day to day responsibilities, and we lucked out with some pretty great weather!  One of our day trips included Acadia National Park, where we saw the breath taking view from the top of Cadillac Mountain.  This picture doesn’t do it justice, but Brian stood pretty close to the edge looking out on everything below!
Checking out the view from the top of Cadillac Mountain – Acadia National Park
My nephew, who is just shy of a year, got up close and personal with a lobster before our dinner.  I’m not quite sure what he thought, but he kept his distance!
Checking out the lobster, very pensive!
 And it wouldn’t be a vacation without exploring some of the local cuisine!  We choose to check out two local vineyards/breweries.  It was the perfect way to enjoy each other’s company on a rainier day where the beach lost it’s appeal.
Trying out one of the local vineyards
It was a really lovely time away.  We were able to spend time reading, kayaking, biking, resting, eating, drinking, and overall just enjoying our family and a break from work.  But we sure did miss our furry friend!  Cody got to spend a week at a doggy resort and spa!  He seemed like he had a great time, they were very friendly and helpful, and he seemed well taken care of.  It was our first time leaving him with someone other than family.  Came right home and fell fast asleep, looks like it was a week of lots of playing!
IMG_7688Cody sure was tired after a week of puppy vacation!
Now that we are back, reality of the new school year is setting in!  My center goes year round, so I don’t really have a “back to school” feeling, but my husband goes from a very relaxed summer schedule to jumping right into full school days and sports practices.  We need to get organized and prep for what our busier schedules will look like.  Our goals are to stay healthy and active while still staying on budget and saving where we can (the goal is to be buying a house this year!).
I have definitely found that the key to staying healthy, active, and on budget all comes down to organization and planning.  I have to plan my meals and plan my workouts.  I used to meal plan on sundays all the time, and then we would get our shopping for the week done.  It saved $ and having to make numerous trips to the store throughout the week.  But I fell off that bandwagon when things got busy.  We wound up with many late nights of take out and fast food.  Not only does that kill our nutrition, but we also spend way more than we typically would have.  So I knew it was time to get back into that habit.
I threw together a meal plan for the week.  When we shop correctly, we are both pretty good about bringing our lunches to work, which also cuts down on quick unhealthy food and spending extra money.  Before I decided on our meal plan I shopped the house first.  I know it sounds funny, but there are so many weeks where there are good sales and I stock up.  Now is the perfect time to put those ingredients to use!
IMG_7683Back to meal planning for the week

Our grocery list is pretty small, based on the number of meals we will be preparing.  And again, this includes breakfasts and lunches.  For the most part I had almost all of the vegetables, meats and fish in the freezer and rice on the shelf.  This Sunday when we go shopping we will again be keeping an eye out for sales.  Its better to buy when the prices are right and freeze, then plan a meal around it, then to have to buy an expensive ingredient just because your recipe calls for it.

So far I’m feeling good.  We have our meal plan, and have mapped out what days we will be going to the gym.  As long as I can get myself back into a routine, I know it will pay off!

What tips do you utilize to make your busy days go by smoother?