Category: Debt Free Journey

Daily Tasks

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Part of my journey, in the 4ish years we have been “attempting” to pay off debt, we have been using Mint.com. I loved it. What I do not love is I just automatically had it assigning my categories to transactions. I never really paid too much attention to whether I was hitting my budget or not. I never really made sure that I was not spending more than was coming in. I mean, if there’s money in my account, I can spend it, right?

WRONG! This year I decided I needed to go through a VERY time consuming process. I decided to completely redo everything as far as my budget goes. I have two ways I track things.

  1. I am tracking the amount of money going into my account and out of my account each day, to make sure that I have enough to pay my bills every week. This Google Sheet tells me if there is enough money in my account to cover my bills for the week. I highlight in yellow the transactions that have not shown up on my account yet.
  2. I am using EveryDollar.com which keeps track of my spending for the month and tells me if there was an overage that can go towards my goals at the moment (right now the $1,000 Baby Emergency Fund).
  3. I am not using the paid version because I need the activity of having to look at every transaction, see how much was spent, and log it into the correct category, I log on here after the transaction has cleared my account.
  4. I keep all of my recurring bills on a Google Calendar, I have a special calendar for bills, I chose the color red because red says “money being paid to someone else” to me.

What are some ways you use to keep you on track? What are the best strategies you have found?

Month 2

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Okay, so it’s the beginning of a new month.

Since hubby works delivering pizza’s, I had him deposit his tips last night, so on the last day of the month. This gives me an accurate accounting of the money we had come in during the month of January.

What I did this morning was finish entering transactions for January, started entering a few that need to go against February’s budgets, and make my new Every Dollar budget for March so I can tweak with new minimums as I find them out during the month of February.

I also looked at January’s budget to see what our “overage” was for the month. We had about $300 over what I had budgeted for the month so I did half into savings to fund our $1,000 Baby Emergency Fund and did the other half into the “we really got behind and need to get back ahead fund.” Ideally, we would have enough in our account where we can pay all of our bills from last month’s money so I can plan out our entire money of spending at the end and not have to tweak as the month goes on.

I really didn’t like the idea of not contributing anything into savings though so I split the amounts in half. Hubby and I agreed this would be a good strategy going forward.

I was also about to finish our taxes for 2018 so we will be using that money to do some much needed car repairs, then ideally we’ll be able to fully fund our emergency fund and put the rest aside for the “get ahead” fund.

Overall, my numbers for the month of January are as follows:

Starting January Baby Step 2 balance: $55,427.45

Amount sent to debt: $1,483.46

Amount to Emergency Fund: $158.37

February Starting Balance: $55,038.95

Monday’s

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The first thing I do on Monday mornings is to update my transactions on my Google Drive spreadsheet and to update my Every Dollar transactions.

Then I look at my calendar to see what bills are due for the week. Since me and my husband both get paid this week, I actually don’t have the money in the account today to pay the bills BUT I will pay them tomorrow when he gets paid.

We are working to build our account up to where we are living on last month’s income, which makes budgeting for the money easier, when you know EXACTLY how much you have to spend.

This will probably take us a while, I will be making some deposits into our Emergency Fund (BS1) so we can be building that at the same time, but I feel padding our checking account is important so we are not living paycheck to paycheck every month. I’ll let you guys know how much we were able to put toward both funds at the beginning of every month. This is the first month we are trying it this way so it will be a bit of a trial and error process but it’s a good jumping off point.

Getting Started

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I ready Dave Ramsey’s book “Total Money Makeover” several years ago. The concepts made sense to me.

  1. Start with a $1,000 emergency fund.
  2. List debts in order from smallest to largest, pay the minimums on all but the smallest debt and throw everything else you have at the smallest debt

These are really the only two steps I paid attention to since they immediately concerned me and I figured I’d read the book when I got close to the end of 2.

What it didn’t really address was how to get the numbers to set up your budget at the beginning. (At least not that I recall)

So this year, I have read several books from other people, just seeing how other people began their debt free journeys. There is a few that I do not agree with. Several of the books that I have read say “hey, you’ve decided to get out of debt but need to create a budget. Let’s spend the next two months continuing to spend like you normally would and keep the receipts so we can create a budget based on your spending.”

I don’t agree with this. So basically, you want me to go into further debt for 2 more months just so I can keep the receipts? My recommendation would be login to your bank account, all your credit cards, whatever bank system you have a card to that you have used for the last 2 months and download and print your bank statement for 2 months. You should have a general idea of what you are buying at each store to get an idea. And start your journey immediately.

When we started poorly a couple of years ago, that’s what I did. We cut down our grocery budget and started meal planning and making a grocery list, but we started immediately, not 2 months later.

Now, we have NOT been perfect. We have fallen off, added a car loan, used the credit cards a couple more times that we should not have. My advice here would be, if your car transmission dies and you or your spouse are a delivery driver, buying a junk car is probably not a good idea. We were spending more in car repairs then we spend on our current car payment.

If you are hesitant to cut your cards up until your emergency fund is in place, take the cards our of your wallet, leave them at home, delete them from your online shopping accounts. (I finally did this this year)

Take at least a month to think over anything you are wanting to purchase, discuss it with your spouse. The exception being food, utilities, housing, debt payments, these are obvious expenses.

We do not even have a clothing budget. Our income is not too high above what our minimum payments are. So we have clothes, if we have a pair of jeans that needs to hit the trash, we discuss it, we may take some money away from our snowball for a month but the reality is, these purchases are sporadic.

My daughter luckily does not grow very fast. My sister’s kids are also a little older so we get all the hand me downs. I have not even had to purchase clothes for the most recent size because I was given plenty. Little is not very hard on clothes so we don’t run through them very much.

This month I finally decided she was 4 and it is time to transition to panties full time. She has been potty trained for potty for about 6 months now but we would put her in a pull-up for naptime and bedtime. In January we started transitioning to panties during naptime, even though she had never pooped in the potty. We ruined a couple of pairs of panties but FINALLY this week she pooped in the toilet WITHOUT getting any on the panties. A couple more weeks of successful pooping in the potty and we will start doing this overnight. We have always included diapers in the grocery budget but, cutting these down to 1 a day has saved our budget significantly. I also bought them at Aldi this last time.

So my best advice is:

  1. Start now, print your statements for the last couple of months to build your budget.
  2. Meal plan and take a list to the store with you and ONLY get things on the list
  3. Discuss purchases with your spouse, wait at least a month before making a decision
  4. Remove credit cards from your wallet, online shopping accounts, or cut them up if you want
  5. Give yourself grace. Life happens but as long as you keep pushing forward, you can do this! I’m still learning this one but I know it will happen.

Every Morning

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Starting this year, I got in the habit of looking at my bank account EVERY MORNING.

I have two different ways I have been tracking incoming and outgoing expenses.

The first is in Google Drive. It is a spreadsheet. Across the top I have all of my categories and how much I have budgeted for each of them and as I subtract transactions, it tells me how much is truly left in my bank account (Including ones that have not cleared yet).

The second is Every Dollar. This tells me how much I have left over for the month after the planned income and expenses. At the end of the month I will be taking the overage and putting half into savings to build my Baby Emergency Fund. And Half to getting us back ahead. I would like to be living off last month’s income on a regular basis but I don’t want to stop all contributions to the emergency fund. This strategy may not work, but until I try it I won’t know.

I also HATE the idea of using cash. I hate the idea of walking around with cash. Stuff happens, cash gets lost. I am also super crazy about my list making and meal planning. I never buy anything off the list. And I compare prices at different stores to make sure I am getting the best price. So I have a separate account with NO OVERDRAFT protection that is used for groceries and gas only. I track to make sure I am within my budget for these two categories. This is a new thing we started in January, this also may not work for us but it’s been going well so far.

I love the idea of getting out of debt. When I started with Every Dollar at the beginning of the month, I went through the last year and did essentially a budget for the last 12 months to see how mad we have been. Let me just say that it was not pretty. It was incredibly humbling to see what was happening. We have been back on track for the last 3 months but I now have the hubby on board. We opened the Etsy store which is mostly his stuff, and we are working on selling off our stuff.

Every little bit helps!

This month we have paid off $716.22 so far and that is just paying the minimums while trying to build our emergency fund.

Time to Start… Again

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I wish I could say this was the first year I was trying this thing. I wish I could say that everything has been perfect for the last couple of years and we are almost debt free. But the reality is, we have not been committed enough, we have not been accountable enough, we have not focused on budgeting enough.

This year I want it to be different. This year I have started up an Instagram for accountability and this blog as well. I am hoping that writing about it, listening to podcasts on it, and reading books about it, will keep me focused.

So we had our first issue this week. I have done an awesome job all month of sticking to the budget. Trying to get a little ahead, since we have fallen a little behind. Then, both cars start having issues, then my husband get a call from his Neurologist letting him know that he needs another appointment. Then, then, then, then.

Unfortunately, all of these things need to be taken care of BEFORE we can get an emergency fund together. I can’t make money fall from the sky. I can’t make something from nothing. We are not ridiculously far behind but enough that it hurts when things pop up. So the goal is to get through these immediate expenses with our dignity in tact. Then it’s time to buckle down and get this done. I need to get ahead but our necessary expenses are barely under out income.

So we have started selling things on Etsy (svalesoncreations), we have started selling movies on Mercari, and we have started selling some unused appliances on Craigslist and Facebook. Any little bit of money we can bring in we are putting towards our emergency fund and getting ahead. I am thinking split whatever the “overage” is each month to both places.

Here’s to my final start to this journey. I don’t care if it’s slow. What I care about is that it gets done. Even if it takes us 10,000 years. We will get there.