Good morning, dear readers.
First of all, before we talk about our debt repayment update, I want to explain why I haven’t been around the last couple of days. I have been thinking of you all often, believe me, but unfortunately I came down with the dreaded flu. I stayed in bed for the last 5 or so days (since Saturday) and am still not feeling entirely better.
Anyway, I apologize for the lack of posts, but we do not have internet at home, so now I must catch up on my posting and make it up to you all (I promise I will!).
Can you believe that it is already time for another debt repayment update? We have been working aggressively at paying off our debt now for 10 weeks. It sounds so small, but it feels SO long. I can’t believe how fast and slow time is passing all at once.
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). This is our third one, but you can find the other two by clicking on our “Paying Off Debt & Saving Money” 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 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.
But here’s a little infographic to help you see where our debt comes from:
We’ve already paid off two of these accounts and almost $10,000 in just 10 weeks. We’ll explain more in this post: here goes!
December Debt Repayment Update
When we last posted, we had paid off enough debt that our new debt total was $187,517.1. This left us with $1000 in our emergency fund, $132.03 in our New Family Fund, and a couple hundred dollars in our checking account, which was great. A great way to start the month of November.
However, this month definitely did not go as we had planned (or hoped). Here’s what happened. The month of November is a big month for us.
- Birthdays: While my birthday is technically in October, we always celebrate it in conjunction with my wife’s birthday (which is in November). We go away for the weekend in between the two birthdays – a trip to Minneapolis, a nice hotel room, some time at the water park and the Mall of America, our favorite restaurants. It’s not necessarily the cheapest trip, but usually we budget in for it and it goes well and is a ton of fun. We don’t take trips often, so we don’t feel bad for this yearly indulgence.
- Thanksgiving: Each year we help to buy the turkey for my family Thanksgiving, we pay for gas to and from my parents and my wife’s parents’ houses, and we purchase some side dishes to contribute. It’s important to us that we contribute to the holiday meal.
- Black Friday: We always make sure to budget for Black Friday because it’s a great time to purchase gifts for our friends without breaking the bank and spending a fortune. Read here about how we rocked BF 2015 and how Black Friday helped us to reach our goals.
Finally, we had an incident where we had to pull from our emergency fund. Bills were coming in and we needed groceries. Unfortunately, I still had the flu so I could not go to work to cash my check. So, we had to transfer some money over from our emergency fund to pay for these. This money will be paid back at the beginning of this month, so we aren’t concerned.
Where does this leave us?
First of all, let’s take a look at where our debt repayment is now. During the month of October, we were able to put the hefty sum of $8,504.67 toward our debt repayment goals. Unfortunately, money like that doesn’t come around every month. For the month of November, we weren’t able to put nearly as much toward our debt.
Instead, we put $919. With everything that went on throughout the month, though, we feel fairly good about this small amount. It was everything we could put toward debt and we know that December will be even better because of it.
Which brings us to our first goal! We have officially paid off 5% of our debt! This may seem like a small amount, but with the amount of debt we owe, this comes to a whopping $9,423.67!
Where does your income come from?
I’m sure you’re wondering about an income report for these numbers and I would love to share this with you.
My wife makes around $1,800 a month post-tax, while I make roughly $1,400 – leaving us with a total of $3,200 net pay. We have taken a vow to only use one income (mine) to pay our bills and to live off of while using the entirety of my wife’s to pay off debt – a choice that resulted in an extra $1,800 toward debt each and every month (Read more HERE). This month, the entirety of my wife’s check went toward birthday weekend, birthday gifts, Thanksgiving food, and Christmas gifts for family and friends.
For DIY Jahn (this blog) and the business I do along with it (mostly freelancing) – I received a total of $158. Actually, we had a total of $303, but the second hundred was technically earned in October, so I did not add this into our income.
We also have decided to do some catering on the side with a friend who works with me. This is a one day event for my wife and I (about 6 hours) and we earn about $100 each – it’s usually only around 1 night a month. So, this month, we were able to pull in an extra $200 cash.
We were paid from some online gigs as well, but the checks will be arriving after this blog is written so I will not add those into our monthly income.
Here’s what our income breaks down to for the month of November:
Don’t forget assets!
This month, our assets were definitely depleted. Obviously we aren’t including retirement and health savings funds in this information – both of which are direct deposited from our paychecks.
So, at the end of the month we have around $25 in our checking account, $260 in our emergency fund (OUCH!), $232.03 in our New Family Fund, and $166 on paypal. We also have our change jar with about $50 in it as of right now.
While this is not necessarily where I was hoping we would be at this point, I feel good that we have survived the biggest spending month of the year (for us).
Where do we hope to be, looking forward? Well, there are a couple of things we hope to do this coming month.
First, we hope that we will be able to build our emergency fund back up to where it needs to go. This won’t be an issue, but is something that we need to think about.
Second, we want to find ways to finish our Christmas shopping without taking away from our debt repayment goals. There isn’t much left, but my wife and I would still like to buy gifts for each other and my father.
Third, we have a goal to continue earning side income so that we can have extra funds to put toward our debt repayment.
Fourth, we would like to reevaluate our budget with the new year coming. Especially our cash budget – which I’ll be telling you more about soon.
Finally, we are planning to try a No Spend Challenge for the month of January. I’ll be telling you more about what this is in a coming blog post, but I hope that we can make the entire month without spending ANY money on ANYTHING except gas to get to work. If you’re interested in joining us, we would love to have you along for the ride. Just leave a comment below and we’ll keep you up-to-date on the plans.
Thank you for joining us on this journey – we truly appreciate your support as we move forward in paying off our debt.