May Debt Repayment Update
May is over a third of the way done (already?) and so I may be a little late for our May Debt Repayment Update, but that doesn’t mean it isn’t happening! We got some great amounts of debt paid off, earned a bit of extra cash, and are well on our way to knocking out the Big9! Read on to hear about it!
For those who know our journey, feel free to skip ahead. For those who are new, here’s a little introduction.
So, here’s what’s going on. We plan to give these updates on a monthly basis (at the beginning of each month). You can see past months updates by clicking on our “Frugal Living” tab – or by clicking HERE.
I’m sure you’re wondering how we got to where we are. Well, we began our journey around the middle of September 2015 when my wife and I got married and decided to calculate our combined debt. That being said, we had been making payments for almost a year by this point, so we must have been much higher beforehand. Regardless, when we began religiously calculating our numbers in September, we came to the conclusion that we have $196,021.8 in debt: which is terrifying.
TIt was time to pay it off and be debt free. Unfortunately, that sort of decision doesn’t come easy – and the results surely don’t come fast. We are working our way to debt freedom and hope to achieve our goals by January 1, 2019. Stay tuned as we update our progress, how we are getting there, and more by visiting regularly or signing up for our e-newsletter – here!
May Debt Repayment Update
Last month, during our April Debt Repayment Update, we told you how we paid off a WHOPPING $6,073.9. How? Well, you can go back and check that out if you’re interested. Now, the month of April may not have led to quite as high of a debt repayment, but it definitely got us some extra money to put toward debt.
Let’s see where we are for May!
Where are we at with our debt for April?
As you know, we are working on reaching our big, scary goal of paying off $50,000 in 2016. Well, I can honestly say that for a while, I wasn’t sure how possible it was going to be – I didn’t have a lot of faith in myself. To be honest, I’ve been pretty discouraged in general, lately.
However, as of this update we have officially reached the halfway mark for our debt repayment goal – over a month early! Can you believe it?
So, let’s look at the numbers for the May Debt Repayment Update:
- $40 – this is a minimum payment to a smaller student debt which brought that debt down to $2,352.82.
- $467.92 – this is a minimum payment for my wife’s federal debt which brought that debt down to 67,747.11.
- $139.04 – this is a minimum payment for our car which brought that debt down to $4,641.33.
- $2,910.61 – this is an extra payment we put toward our high interest loan (affectionately titled Big9). We brought Big9 down to $15,299.36!
In total, we paid off $3,557.57 in debt in April- which is pretty great considering we also took a family trip up to Minneapolis to visit my parents. We went to Ikea and the Mall of America and barely spent anything! We shared a hotel room for $100 (for the whole weekend), so our biggest expense was food. Not so bad!
What does this bring us to in total for debt repayment? We have officially paid off a total of $25,898.92 in 2016 AND $36,239.78 since October. Woohoo!
Where does your income come from?
I decided to add this segment in November after reading a few income reports from other bloggers. I don’t want this to sound like bragging, but rather to help you to see that it is possible to pay back your debt on a low income (we’re doing it). You can also see that it’s possible to make money on the side (we’re doing that, too). I hope that this helps you on your journey to debt freedom.
Here’s our income breakdown for the month of April:
- $1,600 – roughly, this is my take home pay. My pay also includes our housing and utilities (since we don’t pay for those), but this is the actual cash-in-pocket amount after taxes. We use my income for all bills, minimum payments, and necessities (groceries, gas, etc.).
- $1,800 – roughly, this is my wife’s take home pay after taxes and insurance costs. We use her income as entirely supplemental – meaning that unless something happens, all of her income goes as extra payments toward debt.
- $321.62 – This is my blogging income for the month. This isn’t too bad for it being so close to summer! Though, I do expect that this will dramatically decrease as the summer gets closer and as we get busier, but I hope to boost it back up in late August / early September!
Total Income for March: $3,721.62
What is in our accounts?
Remember in the past how we were talking about our “New Family Fund” and how we wanted to make sure we had money to start a family when we were ready? Well, that was all well and good, but we recently discovered that our flex-spending account can help us with a lot of the needs in this area and while we know that having a family is expensive, we also realize that compound interest is expensive….
On that note, we have decided to drain our “New Family Fund” for the time being and put all of our money toward paying down debt first and foremost. It’s been a hard decision because we want to start a family while we are younger, but our debt is a mess that we simply won’t be getting out of any time soon and we certainly can’t bring a baby into that…
While we don’t like the decision, it’s necessary as we work to pay off some of these higher interest debts. Perhaps we’ll go back to paying into that when our Big9 and car loan are both paid off, but for now, we are going to keep our emergency fund at $1,000 and stick with that.
Anyway, here are what the accounts look like for our May Debt Repayment Update:
- $1,000 – Emergency fund. Our goal is to keep this right where it’s at. This is split up into two accounts. One is easy to access through our bank and has about $300 in it, the other is through CapitalOne360. They gave us a free bonus for starting and the interest rate is higher than any others around us! Plus, no fees. Why not get free money? If you use this link, we both get a little bonus for opening an account: https://r.capitalone360.com/yd7NFLaMQu How great is that?
Total Assets for our May Debt Repayment Update: $1,000
May Debt Repayment Update
Where do we hope to be, looking forward, after the May Debt Repayment Update?
Well, at this point I simply hope to make it through the summer. Our summer is crazy with me working as a Program Director at a summer camp and my wife helping with catering when she can. I work 14-18 hour days and struggle to find time to sleep, so hopefully it won’t be too insane.
On the plus side, at least we won’t have to spend much money on food as we’ll be eating here at camp most times! That should mean a little extra cash can head right into our debt repayment. We also don’t have any time to travel, so gas money should go down too. Yay for extra funds!
As you all know, we set a huge, big, scary goal of paying off $50,000 in debt in 2016. YIKES! I know it sounds crazy, but we think we can do it. So, we’ll be updating you on that goal each month during our debt repayment updates so that you can watch the progress.
Total Paid off in 2016: $25,898.92
Left to reach Goal: $24,101.08
We are over halfway there and it’s only been four full months! It’s crazy how well this challenge has been going and I can’t WAIT to see how close we get to reaching our goal. It’s going to be hard, but I know that we can do it! We will need to side hustle like crazy, sell stuff, and work our butts off to make this happen… but at the end of 2016, I know that it will all be worth it. We’ll be $50,000 less in debt and well on our way to debt freedom. Here goes nothing!
Thanks for reading our May Debt Repayment Update!
If you have any comments, let us know! We love to hear.
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