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This month went pretty smoothly in terms of finances. We didn’t have any major surprises, and trying to watch my calorie intake helped our dining out budget quite a bit too!
Our biggest challenge (poor us) was deciding how to use my annual bonus from work. We kept debating how much to put towards debt vs savings vs spending for fun. Ultimately we decided to use some for debt, some to start our buffer (trying to get 1 month ahead), and some for small savings goals. It felt REALLY weird to get a bonus check and not really spend anything. This year, we paid for our past spending and saved for our future spending. Is this what adulting is like? Are we finally making smart financial decisions? It’s crazy.
|Type of Debt||Expected Payoff||Balance|
|Credit Card||2017 – November||$927.28|
|Credit Card||2018 – May||$5,695.47|
|Credit Card (HE Loan)||2018 – September||$8,181.00|
|Student Loan||2019 – September||$21,452.56|
|Student Loan||2020 – October||$32,108.14|
|Auto Loan||2021 – June||$18,133.35|
|Mortgage||2022 – May||$47,155.59|
|Student Loan||2023 – January||$35,901.78|
|TOTAL DEBT INCLUDING MORTGAGE||$169,555.17|
|TOTAL DEBT WITHOUT MORTGAGE||$122,399.58|
Look how small that first credit card balance is. I was REALLY conflicted about that one. I wanted to pay it in full, but I also know we need to start working on building our buffer if we are ever going to get ahead. Rule 4 in YNAB talks about aging your money. This essentially means building a buffer and living on your previous month’s income. The buffer is what breaks the paycheck to paycheck cycle. Instead of waiting for money to arrive to pay a bill, you have money hanging out waiting for the bill to arrive.
We have NEVER been in that position. It’s important for us to get there to have a little security and to reduce financial stress. It’s just such a struggle to save when we have debt. I have to remember that our other goals are important too. We’re on a great debt repayment plan, and paying off that card in September wouldn’t have changed our final payoff date anyway.
Not much changed this month except for lowering balances, but that’s great. We shouldn’t feel all worked up and stressed about our finances, right? My goal is to make our finances boring and easy. It is nice to see that our unsecured debt is finally our smallest category. We’re so close to paying off the first credit card!
Our overall percentage will fluctuate as we pay things off, so I’m not too worried about this number. However, it is exciting to see that ALL of our debt is at an interest rate of 6% or less (Mortgage 6%, Student Loans 5.41% & 4.13%, Auto Loan 3.79%, Credit Cards 1.9% & 0%). We’ve lowered all the rates we can lower at this point unless we refinance the mortgage. We don’t want to refinance because we plan to move in a few years. The interest saved wouldn’t make up for the closing costs.
TLDR: Modified snowball method using Undebt.it
We lowered our debt balance by $6,875.22 in September, and we’re out of the 170s! It was hard not to use my bonus for fun, but it feels so great to have made such progress this month. We’re more than 1/5 of the way done.
You know I hate seeing that huge number going to interest, but the amount keeps going down! In July it was $724 and in August it was $672. It’s progress, so I’m trying to celebrate it! It’s still frustrating, but I’m trying not to dwell on it. We’ve lowered our rates as much as possible, and we’ve definitely learned from our mistakes.
More Wasted Money??
If you’ve read any of my prior debt reports, you know that dining out has been one of our biggest challenges. We’ve really done a great job the past two months of reigning that in. Now it seems our grocery budget is out of control, so I’ll have to evaluate that next. (Note: YNAB shows all of our spending on a credit card. We use the credit card for the cash back benefits and pay it off each month.)
We didn’t stick to only eating out once per week, but we did stick to keeping the cost down! Our original budget was $100, and we spent $135.84. It’s still not exactly what we’re shooting for, but it keeps getting better. This is the lowest month we’ve had in Dining Out for this entire year, as you can see from the chart below. I love being able to see this kind of information in YNAB because it helps me see that we are making progress!
Where do you overspend? What are you doing to reign it in? Share in the comments!