Debt Payoff Update
We are seven months into our debt payoff journey!
I had a fun thing happen when I totaled our debt for this month’s budget review: It came out to a perfectly even number: $27,000.00. I find that odd that I can add a bunch of random numbers and come up with a perfectly round number. I’m just weird. It’s kind of like being able to stop the pump at the gas station at exactly $30.00 or something.
In addition to that making my inner math nerd happy, I’m also thrilled with our progress. I’ve tried many times through the years to figure out our finances, and each month when I see us moving closer to being debt-free, I’m just so grateful. We still have far to go, but we are moving forward!
The Beginning
In July 2024, we started with $38,276.85 of debt. That was also the time we began to talk about when we would like to retire, which would be impossible with all that debt! So, we had our total debt and a date we wanted to retire–June of 2027. That gave us three years to become debt-free. So we started to budget and began our debt payoff plan.
It took a while to see real progress on paper, like seeing the number going steadily down each month. The real progress was the confidence we were gaining, and grasping the idea that this time, we may actually succeed!
Things I’m Learning in the Middle
Well, we’re not actually to the middle. But we’re not at the beginning anymore. Things I’ve learned since we started:
Knowing how we’re spending our money is powerful.
Having a record of where our money has gone each month makes planning ahead a breeze. I know that this month we will be stocking up on dog food and cat litter. We buy it every other month and it’s not a small amount because we have three dogs and three cats. Last month we did a stock-up order from Sam’s club. I purchase our paper supplies and some supplies for my daycare from there. Our spending log helps me plan ahead and avoid going over on our budget.
It also helps me stay motivated, and keeps me trying to do just a little better each month. I know groceries are very expensive right now, but I’m working on lowering our grocery budget by a small amount each month. If it gets to where we’re feeling too pinched, I can raise it. But I’m kind of hooked on this paying off debt thing. I want to find all the extra money I can to help us reach our goal.
I’m learning to try harder and do better.
Using the grocery budget example above, I’m striving to become an amazing steward of our grocery budget. I do pretty well, but I want to do better. I’ve become even more mindful about food waste. I’m planning meals based on the pantry and freezer, and buying things that are on a really good sale. I’ve started incorporating beans into our meals at least once each week. Since meat is usually the most expensive part of a meal, I’m making soups, stews, and casseroles to stretch it. Here’s a favorite–Hearty Hamburger Tomato Stew.
I’m researching ways to make things myself to see if I can make them for less than I can buy them at the grocery store. When my current bottle of French Vanilla creamer runs out, I’m going to try a DIY recipe. I got tired of spending $4.00 for a small container of I Can’t Believe It’s Not Butter, and I’ve started making homemade spreadable butter with butter I buy on sale.
I’ve learned to save for things.
I’m learning to plan ahead, and I love the feeling of knowing the money will be there when it is needed. Part of our debt consists of medical bills. I will be having a minor medical procedure next month, and this is the first time I will be able to pay the bill and not turn it into debt and have to put it on a payment plan to pay each month. I’m grateful that that is an option when needed, but I’ll be so happy to be not adding to our total debt. We want to pay it off, not add to it.
Contentment
I actually think that moving to a tiny town has made me a more content person. Where we used to live, there were all the stores with all the things and I loved to go to them. Now I wonder why I thought I needed to go buy…stuff. I don’t miss the stores and I don’t miss the stuff. We have amazing thrift stores here, and if I feel the need to shop, we go, I spend a few dollars and I’m good for a month or two.
I think part of my contentment comes from knowing that the sacrifices we are making now will benefit us in the future. Being debt-free will make retirement possible for us. We want to retire more than we want to go on trips or buy more stuff. We choose to be content.
Making progress!
By the middle of this year, we will be paying off a car loan, two credit cards and a medical bill. On average, our debt has been decreasing by around $1400 per month. I’ve been doing the “snowball method” of debt payoff, where I take the payment from the bill I paid off and add it to the next one in line.
The car payment is $286.00, the first credit card payment is $210.00, the second credit card payment is $200.00, and the payment on the medical bill is $150.00. That’s an extra $846.00 per month when all of those are paid off. I could take that and apply it to our last and largest credit card payment each month, but I may need to reroute some of it to savings to replenish it after I pay my new medical bill. Sometimes you have to make adjustments, but as long as you’re still moving forward, it’s okay.
I share all of this to show that it takes time and patience to begin to see real progress on your budget and paying off debt. Be patient and don’t give up. There will be setbacks. Groceries will go up in price, medical bills will float in as soon as you’ve paid one off. Be on the lookout for little changes you can make to your spending. They really do add up. Give yourself some grace and a little treat once in a while. Becoming debt-free is hard work. But it’s worth it!
Until next time, happy budgeting!
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