January Debt Repayment Update
Happy New Year! It’s officially 2016, can you believe it? And so it’s time, once again, for a Debt Repayment Update – can you believe I’ve already done three of these? This will be my fourth since we started aggressively attacking our debt.
It certainly feels good to be in the midst of repayment. Okay, maybe it’s a little overwhelming, but on the bright side – we are on our way! It’s been 14 weeks, my blog has been live for 2.5 months, and we are just beginning our No Spend Challenge month. Find out more about that by clicking HERE.
With that being said, I promised all of my challenge-takers an inspirational quote for each day of the challenge. Most days will have tips and tricks to save and earn extra money this month, but as you all know – we always start with a debt repayment update and an income report for each month!
So, before we get bogged down in the dollars and cents, here’s the inspirational quote of the day. Feel free to pin it, share it, tweet it, like it, and whatever else you would like!
“Debt is normal. Be weird.” – Dave Ramsey
Let’s be weird and get this debt paid off by saving as much as we can this month.
Without further ado, our debt repayment update.
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:
January Debt Repayment Update
At the end of last month, we had made the realization that we had paid a whopping $9,423.67 toward debt – almost $10,000 in only 10 weeks – leaving us with $186,613.21 left to pay on our debts. While we didn’t pay a ton in November, we did get some payments beyond the minimum – so that was exciting!
As you may remember, I was really sick at the end of November and we ended up needing to use our emergency funds to pay some bills until I was feeling well enough to go back to work and get my check. We were quite withdrawn and had only $260 left by the time I was able to go back (I had to take a full week off). We also had $232.03 in our New Family Fund, which was left untouched (as a rule) and $25 in our checking account. Quite the way to end the month, I’d say!
Where is our debt for December?
Okay, so let’s take a look at where our debt repayment is now. During the month of November, we were able to put $919 toward debt and we more than matched that this month. We put $1,009.67 toward debt this month!
The strategy we have been using is to try to always have enough to pay a second minimum payment on the debt we are trying to pay off the fastest. While we would love to put more than that, we haven’t gotten to that point yet.
However, with what we were able to put toward debt this month we have reached our first $10,000 of debt repaid since starting to aggressively pay off our debt. Remember, we had made quite a few payments before this decision, but we have not counted those in.
As you may remember, we reached our first goal of paying 5% of our debt back last month. We haven’t moved from the 5% realm yet, but we did manage to put $10,433.34 toward our debt this month! Woohoo! This leaves us with $185,603.54 to start the New Year. Not so bad, right?
Where does your income come from?
I decided to add this segment in last month 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.
My wife and I’s pay has not changed as of right now. My wife makes around $1,800 per month and I make roughly $1,400 a month (both post-tax, post-health insurance, post-retirement contribution). We have taken a vow to use only my income to support us – pay our bills, our groceries, our gas, everything and use the entirety of hers to pay off debt. However, as you know, sometimes her paychecks must be used for other purposes.
This month, my wife’s first check went toward replenishing our emergency fund. Unfortunately, half of the second check went toward repairing our car. Our airbag lights came on – apparently a sensor was broken in the computer. The repair cost $400 and led to an inspection which reported $900 more repairs needed. The car is in the shop to get these repairs completed now, so we will be paying for that with our emergency fund.
For DIY Jahn (this blog), we have earned a total of $136.46 this month. Now, a couple of things. First of all, this is lower than last month – I was involved with writing articles for a business for pay, but when I was unable to write for a few days they stopped communicating with me, so this has gone away since. I did not earn anything from that company this month (while they were the majority of earnings last month).
Instead, the entirety of the $136.46 was made from the blog. However, there is a little catch – and that’s point two: some of this cash is still incoming. Some of the companies that I work with on DIY Jahn do their payments on a month-to-month basis, so I will not being seeing those payments for a few weeks ($99). While they were earned during this month, the actual take-home pay was $37.46 for December.
As you may remember from last month, we have also decided to do some catering on the side with a friend. This is a one day event for my wife and I (roughly six hours) and we earn about $100 each. This month, we did three nights which resulted in a total of $600 extra. I know what you are thinking – why did we not put all $600 toward our debt? I wish we could have, but with Christmas coming up we did not want to break our budget for gifts (like last month). Instead, we used this money to purchase all of our gifts for friends, family, and ourselves. We also are using it as some gas money to get to our parents’ houses for Christmas.
Here’s what our income breaks down to for the month of December:
Don’t forget our assets!
I’m excited to report that our assets have been replenished fully this month after a big depletion last month! As I said previously, we used my wife’s checks to help with this situation. As of the end of December, we have a full $1,000 in our emergency fund and have been able to add the monthly-contribution of $100 to our New Family Fund – leaving us with $332.03!
Now, you may notice two areas that have been taken out for this month’s debt repayment update – the coin jar and the Paypal account. Now that I am not writing articles for the aforementioned company, our Paypal account does not have any funds so I removed the section. As for the coin jar, we have decided that this will be our vacation fund (so as not to break the budget for vacations) so we have removed this section as well.
Where do we hope to be, looking forward?
First: Well, we know that we have a big expense coming up with our car and we will not be counting this in our No Spend Challenge. Car repairs are unexpected costs, but a necessary thing if we hope to keep getting to work to earn more money. So, this is something that we will have to pay regardless of the No Spend Challenge (and I hope you won’t count it against us!). You can look for it in the debt repayment update – don’t be surprised!
Second: However, since we are completing the No Spend Challenge this month, we hope to really do a number to our debts and put some extra funds toward them (even with the car payment). Want to join us? There’s still time. Check out the post HERE.
Third: We hope to keep earning side income from catering (we have one event lined up for January 9th, but know that the events will be less now that the holiday is over). I also hope to keep earning extra with DIY Jahn and (hopefully) release my first product soon which will, in theory, help us to keep earning some money to pay off our debts!
Fourth: We’ll be reevaluating our budget as we move through the No Spend Challenge and that should change how we pay back our debts. Read about this in next month’s debt repayment update!
So, stay tuned for more – big things are coming our way (and yours)! Thank you for joining us on this journey, supporting us, and keeping us going. We truly appreciate it.
Disclaimer: Some of DIY Jahn posts contain affiliate links. While I do earn money through Fronto, Ibotta, and other companies, and bonuses for referring people, all of my opinions on the company are 100% honest and my own. Also, please note that recipes, fitness tips, and financial tips are not given by a professional. To understand what this all means for you, click here.