We are just seventeen months away from when when we want to have all of our debt paid off. I know the numbers don’t look like that’s possible at this point, but we’re not giving up! Our goal is definitely a stretching goal, as it has never looked possible with the current numbers on paper. We really wanted a goal that would push us. We want to reach our goal as soon as possible so we can move onto saving up for a house.
As you probably already read, we bought a new van this month. I took the opportunity to analyze the total cost of our old van in the four years that we had it. I really enjoyed reading everyone’s experience and opinions on whether or not buying a used car is worth it in the comments. Definitely good food for thought!
Between purchasing a new-to-us vehicle and paying some medical bills from our daughter’s birth, our debt payment was smaller than normal this month. In addition, all of our income was down this month so next month’s debt payment won’t be spectacular either. Even so our motivation and spirits are still up!
Debt Repayment
During July, we put $1,336 toward our student loans. That’s a pretty low payoff this month. Most of this went toward the 0% APR balance transfer that we’re using to save money on interest. We also had a small amount from SmarterBucks that was credited toward the student loans. When a payment comes from SmarterBucks, it is divided equally between all of your student loans.
There is still some mystery as to what goes on behind the scenes with these student loans. Sometimes the final payoff amount goes up and sometimes it goes down. The interface for the loan servicer is pretty useless, so we have no idea why the payoff amount randomly fluctuates for the four loans we have remaining. If you aren’t tracking yours on your own spreadsheet, you probably wouldn’t notice (and there’s no way to look back and see historical data like that). I definitely recommend tracking your final payoff amount regularly. In our monthly budgeting meeting, we make note of the current payoff amount of each loan (with our servicer, you actually have to click to have the payoff amount of each one be calculated).
Income
Our total net income for July was $4,226. Since we live on last month’s income, this is income that we haven’t touched yet. We will budget and spend it in August.
Attorney Income– $2,610 July happened to be a low month for attorney income commissions. It just depends on how the cases fall and when the bills come in. In case you missed it, I explained our switch to variable income recently if you’re interested in more details. Next month is looking much better already.
Blog Income– $1,471 This is the income I actually received this month, which means I earned it a month or two ago (payments always lag a month or two). I have already subtracted my blogging expenses, but taxes are not taken out yet.
For those who are curious about how my blogging income breaks down, please sign up for my Behind-the-Scenes Blogging emails. Since most of my readers aren’t bloggers, I’ve decided to share my blogging details (income breakdown, blogging tips, answers to your burning blogging questions, etc) via email instead of here.
Etsy Income– $145 With my blog and baby taking more time, Etsy has taken the back burner, which is fine for now.
Spending
We use YNAB (YouNeedABudget) for our budgeting and absolutely adore it. Each month we budget down to zero using last month’s income. Our spending in July came from the income we earned in June. In addition to the debt payment above, here’s how we spent money in July:
Tithing– $603 This is our normal 10% tithe on our income. We pay tithing at the first of the month on the total income we had the previous month. You can read more about why we pay tithing even though we’re in debt.
Other Giving– $20 Other charitable donations this month.
Mortgage/Rent– $0 For those who are new here, we don’t pay any rent living in my in-laws unfinished basement. This not only frees up money in the budget to put toward debt, but it provides a constant reminder of our goal to get this debt paid off as fast as possible.
Internet– $70 We are still loving our unlimited internet! It’s wonderful not having to budget my bandwidth anymore! My in-laws take care of all the other utilities, so this is the only utility we pay and we pay it with a smile.
Republic Wireless Cell Phones– $22 We both have smartphones through Republic Wireless (you can read my review here). With tax, each phone with unlimited talk, text and WiFi data is around $11. I recently wrote an updated review Republic Wireless: A Year Later.
Health Insurance– $152 Our insurance went down slightly because our subsidy went up when our family size increased in April. I’m sure we’ll end up paying more when it’s all evened out at tax time because we expect to make more money than we did last year.
Car Insurance– $97 We have auto insurance through USAA for our two older vehicles (both 1997) with a $250 deductible.
Renters Insurance– $14 We also have our renters insurance through USAA. It doesn’t cost much and it’s really great to have when you need it.
Food– $327 Our weakness this month was stopping by the store to buy popsicles when we were in town on a hot day. We always got more than just a frozen treat, which is the main reason we went over our normal $300 grocery budget. There was also twice when my husband got Subway at work for lunch or dinner. One time he accidentally left his lunch at home and the other night he stayed super late and needed dinner.
Gas– $478 Gas is at $3.29 where we live. We took a small road trip (about 6 hours each way) at the end of the month for a family reunion and memorial service. Other than that, our gas usage was normal. My husband commutes an hour+ each way to work, which would normally be a ridiculous proposition to save money, except it means that we can live in my in-laws’ basement for free.
Fun– $37 There is a theater in town that has $1 matinees for kids during the summer. We saw Muppets Most Wanted. We paid for parking when we went swimming with friends at a great spot on the river in the mountains. There are plenty of places we can swim in rivers for free, but one of our favorite spots has a parking fee. I also put $25 into a pool with others who are trying to lose weight. Everyone who loses 4% of their weight in 4 weeks is considered a winner and gets to split the pot. I succeeded, so I will be getting at least my $25 back, but probably more!
Clothing– $92 My husband needed new running shoes (so he could go running with me!). I found some packages of new kids socks on clearance, so we should be set on socks for a while! I spend $32 at my favorite thrift store mostly on kids clothes. I bought 33 items, so they averaged less than a dollar each. The store has tag colors that are 25% off, 50% off and 75% off. It’s fun for the kids to help me find the 50 and 75% off tags. I even got a few things for myself! I also ordered some things on Schoola with free credit and had to pay tax.
Household– $32 I always wear rubber gloves when I clean or wash dishes, so I stocked up on them when I found the size and style I like. I also bought the ingredients for my homemade laundry detergent and another DIY project I’ll be sharing on the blog soon!
Medical– $1,035 We paid some bills related to the birth of our newest little one.
Baby– $0 I bought some bows, a teething toy, and teething medicine using a gift card that I received as a baby shower gift.
Gifts– $20 We went to a party for two three-year-old girls, so I made them art boxes for gifts. While I was at it, I purchased the supplies to make six more for future kids gifts.
New Van Fund– $1,600 We didn’t have a fund set up for a new van, but knowing that we weren’t going to be spending too much on it, we decided to just buy one with cash and “finance” it through our own budget over two months. Since we’re a month ahead we can do this (similar to how we handle unexpected expenses (method #2), though this expense was not unexpected). We will budget the rest of the van’s cost in next month’s budget
Registration– $158 Registering the new van.
Law Practice– $51 This is the monthly subscription for law practice management software that we pay for out of pocket, as well as paying for parking downtown one day.
College Savings– $100 We contribute $25 per month per kid to 529 accounts. More on our decision to start saving for college in this post.
A Special Treat
For those of you who made it all the way to the end, I have a special treat. I made my first-ever blog video last week for the #MoneyMinute contest. I didn’t hold anything back– I’m in costume and singing about something dear to my heart that you’ve heard me mention many times. If you enjoy it, click the thumbs up under the video to vote for me! Feel free to share! 🙂
How did your finances go in July?
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Jenni says
August 5, 2015 at 4:51 amI know it seemed like a low month for you given your goals, but still, you’re doing great! All of the expenses you had were necessary ones, and you’ve come so far even despite the unexpected costs. My husband used to clerk at a law firm where some of the attorneys billed individually/operated their own practices within one office building, and he learned how difficult the whole income side of things can be when you are running your own business.
Our finances did okay, but we had to pay to have a French drain installed which basically will be financed by not making most of our student loan payment in August.
Stephanie says
August 6, 2015 at 10:19 amThanks for the encouragement Jenni! The income side of your own practice (or just earning commission) is tricky! Sorry to hear about the drain!
Linda P. says
August 5, 2015 at 5:56 amYou may have termed your $1,336 payment “a pretty low payoff,” but it’s still a hefty percentage of your income. It’s only low if compared to what you’re used to paying against that debt. Congratulations for managing any payment at all in month when you’re paying medical bills for your beautiful child’s birth and also buying a new vehicle for your expanded family.
And singing a cappella! I definitely voted for you!
Stephanie says
August 6, 2015 at 10:21 amThank you Linda! You are always so supportive! Our payment just seems small in light of our big goal, but you’re right– it is a good percentage of our income! 🙂
Monica S says
August 5, 2015 at 6:18 amI think you did great considering all the expenses you paid during the month! Congrats!
I was just wondering what year and model of van you decided to get? Will your insurance go up because the year model is newer?
Stephanie says
August 6, 2015 at 10:24 amIt’s a 2003 Chevy Venture. I imagine I’ll write about it more in the future. The funny thing is that even though it’s newer, it’s not as nice as our old one. Our 1997 Plymouth Grand Voyager was the top trim line and the Chevy is pretty bare bones. BUT it has A/C which is pretty heavenly after going without it for so long, so I won’t complain! 🙂
Jennifer says
August 5, 2015 at 6:26 amCongrats on the continued debt payment progress – you are such an inspiration! So, I have a strange question… Would you care to share the type of rubber gloves you prefer for cleaning? I’m looking for a recommendation. 🙂
Stephanie says
August 6, 2015 at 10:37 amHa ha… they are Clean Ones Everyday Cleaning Natural Latex Gloves. There’s nothing super special about them except that they are about half the price of most of the gloves of the same quality (they are nice and thick and don’t puncture easily like those cheap ones), so they are often out of them. So when I saw they had my size and had plenty, I stocked up. I looked them up on Amazon for that you could see what they look like, and I saw that the price is pretty much the same as Walmart! I’m so glad you asked– now I know to get them on Amazon in the future!
Gail says
August 6, 2015 at 3:28 amI wish I knew about this 40 years ago. Never had a budget and though we did OK raising 3 boys, various home improvements, and had some nice vacations, we had a few struggles along the way. Now we are retired and on the fixed income. The only debt we have is a mortgage and a car. I’m still trying to get this budget thing worked out. Tracking spending is most helpful. I’ve found we spend a lot on groceries and just by limiting my trips to the store to once a week is huge. We do like to entertain and have cut back on that a little too. Our emergency savings was looking promising until we had our generator serviced for the first time in years. Our next big expense is a new roof, for which we cashed in some investments to cover that expense. Still trying to figure out where everything goes on the spreadsheet. I put $ in a savings account monthly to cover bills that come every 3 or 4 months. Now, when I use that money to pay for LTC , for example, do I have to include that into this months income, then pay the bill as an expense? I’m doing that all on paper, because my computer is not working and iPad doesn’t work for something like this – that I know of. Keep up the good work Stephanie. You’re an inspiration.
Stephanie says
August 6, 2015 at 10:40 amIt sounds like you are doing a great job Gail! As for putting away money for periodic expenses , I would say that you wouldn’t count it as income, you would just pay the periodic expense from the funds you have saved up over the months before the due date (even if it means you are transferring the money from one account to another).
Karen says
August 6, 2015 at 8:51 amMy husband used to be self-employed, and I know full well how frustrating it can be sometimes to live with a fluctuating salary. However, you two seem to have conquered a feat that I wasn’t able to; from reading various posts of yours it seems that your success in paying down debt is in first of all your joint focus on doing so, but also also in how you know in advance what you are working with (living off of the last month’s income). With both of you earning variable salaries I admire your stick-to-your-guns attitude in keeping your expenses reigned in, rather than ‘celebrating’ an income influx with some expensive and/or frivolous purchase. I admire your persistence; when we were in this scenario we almost always felt that we needed to ‘treat’ ourselves with a restaurant meal (or three) that month rather than put the extra toward a debt. This month’s loan payment may be less than a previous one, but it is a great progress none the less (and most likely a greater progress than many others are able to do).
Stephanie says
August 6, 2015 at 10:43 amThanks Karen! I totally agree that being on the same page with my husband is one of the secrets of our success. We are a great team! Thanks for your encouragement.
Jill says
August 6, 2015 at 2:08 pmHi Steph! I plan to purchase YNAB within the next month so if there are any deals happening or if you get credit when you recommend people, let me know! xo Jill
Stephanie says
August 10, 2015 at 10:10 amHi Jill! The only deal now is the $6 off for using my referral link, which makes it $54. I hope you love YNAB as much as we do! Be sure to watch the videos so you can get started on the right foot. 🙂
Crystal @ Frugal Chic Living says
August 6, 2015 at 4:31 pmI love reading these updates! I just realized today that we also are planning on 17 months left of debt pay-off. Makes it even more encouraging for me that we are on the same schedule 🙂
Stephanie says
August 10, 2015 at 10:11 amThanks Crystal! That’s fun that’s we have the same goal timeline!
Candice says
August 7, 2015 at 4:01 amVoted for your ace video. Good luck!
Stephanie says
August 10, 2015 at 10:11 amThanks Candice! 🙂
Jessi Fearon @ The Budget Mama says
August 10, 2015 at 7:22 pmI love following y’all’s debt repayment progress! 🙂 I hate that your servicer is making figuring out your payoff totals complicated. I had a similar problem before I had my loans switched over to NelNet. Not sure if you can do that with your loans or not but it helps me know what my payoffs are each day. And congrats on your new-to-you car! 🙂 it’s always nice to get something “new”. 🙂
Stephanie says
August 18, 2015 at 11:45 amOur servicer is FedLoan Servicing. They are not transparent at all!! I don’t think we have the option to switch them to a different servicer. That’s nice that NelNet is easier to work with.
Midori says
August 15, 2015 at 9:38 amI look forward to your monthly debt repayment progress reports to inspire and encourage us on our debt repayment project. Thank you! Your family is making fantastic progress – persistence wins the race!! We’re cheering you on!
Stephanie says
August 18, 2015 at 11:45 amThanks for the encouragement Midori! 🙂
Anderson Smith says
August 24, 2015 at 10:11 amI just started doing research on budgeting a few days ago. I’m 21 and I’ve never really had to worry about it till now. Its refreshing reading a blog like this, everything you do seems more practical and easy to understand. Most of the other blogs i found use complicated terms i don’t really understand :(. Anyways, thanks for the info! you make budgeting seem a lot more practical and doable! keep it up!