It’s time for a monthly check-up to account for how we are doing on our big fat goal. In order to pay off our remaining debt by the end of 2016, we will need to put just over $3,000 per month toward our student loans. We know that this is an audacious goal, considering that my husband makes only slightly more than that $3,000 each month.
I am happy to report that we put $2,800 toward our debt in September! While this isn’t as high as our goal of “just over $3,000,” it is very close and almost seems impossible when you crunch the numbers.
For the sake of accountability and record-keeping, as well as keeping this transparent for readers who are in similar situations, I will give you all the numbers. You may notice that they don’t quite add up (the income doesn’t look like it covers all the expenses). There are several reasons for this.
The main reason for the apparent discrepancy between income and spending is that we use credit cards for almost all purchases. We count the expense in the month it was incurred (the month we swiped the card) but we don’t actually pay for it until the next month when the statement comes due. I know many people are dead set against any credit card use, but because we never carry a balance on the cards, we never pay interest or fees. We just let the card company provide a no interest loan each month until the statement due date.
INCOME (You can read more details about our income here)
Regular: $3083 (after taxes) This is par for the course. This won’t change until Mr SixFiguresUnder’s draw is renegotiated.
Etsy: $705– This is the most I have ever made in a single month. Hooray! What a blessing! For the past year, I have averaged around $400 a month, so this is a nice jump up. Now I just need to keep it like this.
Ebay: $90– I didn’t list many new things this month, just relisted some “Buy it Now” (30-day) listings that hadn’t sold. I have more items to list, but October is already going to be a busy month.
|Tithing||$350||$408||We pay a full 10% tithe on our income and make a modest monthly donation to help the less fortunate in our area. This is one category where we don’t skimp.|
|Rent/Mortagage||$0||$0||We have a a little basement apartment in my in-law’s house, so we have no expenses here. Since it’s an hour out of town, we do have a higher-than-average gas budget.|
|Gas||$500||$579||Mr SixFiguresUnder was in charge of helping his Boy Scouts with their rummage sale fundraiser, which involved extra driving around in the van to pick up donations and several other un-predicted trips into town. Even with gas prices fluctuating, we are generally right around $475 each month in this category.Note: My husband commutes an hour each way to work. While we could save on gas if we lived closer to work, we save over $1,000/month by not having rent or utilities.|
|Utilities||$0||$0||Once again, thanks to my husband’s generous parents, we have no expenses in this category.|
|Groceries||$300||$244||All spent in just three transactions: WinCo, Sam’s Club, and Grocery Outlet.|
|Gifts||$25||$23||I bought 8 DVDs without cases (Cars, Monsters Inc, etc) on ebay for $23 for my kids for Christmas. Other birthday gifts given this month were all handmade.|
|Clothing||$10||$4||We bought a few things at the thrift store. No dry cleaning this month!|
|Home & Office Supplies||$40||$12||This category include pretty much everything we use at home that isn’t food, from toner to toilet paper.|
|Cell Phones||$20||$20||$10 each for our antique dumbphones. I think this plan is over 10 years old!|
|Health Insurance||$450||$526||Our premiums increased from $396 to $450, but we also had to renew our Farm Bureau membership to keep the policy. Even with the extra once-a-year expense, our policy is still by far cheaper than any comparable plan in the area. However, we now have an annual membership in the Farm Bureau even though our Farm Bureau insurance policy is being discontinued on January 1.|
|Lawyer Marketing||$450||$394||This is one of those areas where we feel some expense is inevitable and even important. Building a client base early not only increases income now, but will continue to strengthen my husband’s practice in the future.|
|Lawyer Marketing Food||$25||$48||This is a special breakout marketing category. Sometimes meeting the right people includes buying food and eating together. This category usually covers a weekly business meeting where my husband has breakfast, but this month he also had another one-off event.|
You may notice that there is no category for entertainment or eating out. That isn’t an oversight. We didn’t eat out and all our entertainment was free.
There you have it! How’s that for personal finance made public?
Why on earth are you spending $500 a month on gas?? You spend more on gas than food. Drive less, bike more, get more fuel efficient car, DO something. You should be able to easily cut those expenses in half. $250 x 12 will save you an extra $3,000 over the course of a year. That is a lot, considering that is your entire take home pay for 1 month. Also, stop shopping for groceries at Sam’s club. Yes, you get more for you money, but you spend more money than you otherwise would. This will save you money and make what little money you make go further. In addition, your husband needs to get another job. Delivering Pizzas on the weekend, working part time construction, something. Even if he makes and extra $100 or $200 per week (5,000 – $10,000 extra per year), that will result in seriously expediting the debt repayment time line. These few suggestions add up to big numbers over the course of a 3 year period. It will be challenging, but the income return on the MBA/JD aren’t high enough based on his current income. If you take a few extra small steps, you will get out of this debt before you know it.
Thanks for stopping by and commenting with your suggestions Johnny. I appreciate that you took time to share your concerns. I’ll try to address them and look forward to any other advice you may be able to offer.
As for the gas, I agree that it is a pretty ridiculous figure. In addition to gas, there is also a corresponding expense for wear and tear on the car, the second major expense of the commute, although with our older cars, the per-mile cost of driving is fairly low. The only reason this still makes sense for my husband to commute an hour to work is that we currently pay $0 in rent and utilities, and moving anywhere closer to work would increase that number to over $1000 a month. I’m sure Mr SixFiguresUnder would love to ride his bike, but for now, the commute, while constituting our largest expense, is only largest by virtue of our not having to pay rent or mortgage at our current hour-from-work residence.
I agree wholeheartedly that Sam’s Club is more expensive for many (if not most) groceries. We are probably not typical Sam’s Club members. One thing we can never find anywhere cheaper than Sam’s is tires. Paying for a tire, installation, or repair at another local shop costs more than the Sam’s membership, which comes with free tire fixes for life. This year we’ve even gotten two new tires for free because of irreparable flats on tires that were still under Sam’s warranty. Actually, we often let our membership expire until we need new tires or have a purchase to make that justifies the membership cost. Apart from tires, pretty much the only things we buy at Sam’s are milk, butter, bananas, cheese and sour cream, which are as cheap there as anywhere else in town. Last week when I was there and spent $20, the cashier said something like “Wow! I never see people who make it out of here for less than $100.”
The side job you suggest is attractive as a way to instantly increase income in the short term. We know a lot of people who have gone that route and been happy with it. In our case, though, we decided it made more sense to have Mr SixFiguresUnder spend his time building his law practice, rather than seeking side income. Starting a business takes time, and right now, at the beginning, he spends a lot of time for what sometimes seems like small returns. Over the next few years, though, we expect his income from the law practice to increase substantially, in direct correlation to the time he spends time building a client pool and working on relationships that will keep bringing him work for years to come. We hope and expect that each hour spent building the business will be more profitable in the short term, and vastly more profitable in the long term, than an hour spent at a part-time job on the side. Plus, we see him so little as it is. Paying off our loans is important (and considering standard repayment plans, this is seriously expedited), but time with family is more important.
Thanks for taking the time to comment. We may not change our plans immediately, but it’s great to have generous readers who are willing to share their own experience and advice.
Brandy @ The Prudent Homemaker says
Our income is very similar, but most of our money goes to the mortgage and utilities. That leaves very little left over.
You must have a fantastic thrift store near you. It would be difficult to purchase even one item of clothing at the thrift store near me for that amount.
I went garage sale shopping on Saturday (I go twice a year to a community sale with my mom. She drives, so no gas expense there) and I was able to find four items of clothing for $1 each. Thrift store clothing is $5-$7 an item where I live.
Hi Brandy! Thanks for stopping by!
If we weren’t living in my in-law’s basement, we would have a much harder time making headway on our student loans. We are so grateful that they are so kind (and easy to get along with).
The thrift stores here typically charge $3 for shirts, $4-5 for pants, kids clothes go from $.50 to $2, depending on the store. The good thrift stores here have one day a month where the whole store is 50% off. We live in the boonies, but I try to to go in on the half off day. Garage sales have much better deals on clothes though!