A lot of people these days are doing income reports for the money they make online. Personally, even though it maybe benefit me in some ways, I don’t want to share my income for the whole world to see. However, I have spent a lot of time thinking about how I could motivate people and encourage them through our financial experience a little bit more. Then I thought about doing an income report in reverse! Instead of sharing how much I make each month, I will be sharing a debt payoff report showing how much money we put toward our debt payoff each month. You may already be following my final $10,000 debt payoff journey. If you are, these reports will go hand in hand with that. I will take you through the steps we take to plan for this money, where it comes from, and the strategies we have implemented that are working to get us out of debt. So let’s take a look at our debt payoff for March 2018.*This post contains affiliate links through which I may make a commission. All thoughts and opinions are my own.
If you’re in debt
If you yourself are struggling to get out of debt and having yet heard about the Snowball Method, you can read my post all about how we paid off $6,000 in just 6 months! If you are totally unsure of where to start I highly recommend following Dave Ramsey’s 7 Baby Steps as laid out in Financial Peace University. Another great idea is to get yourself set up with a free credit consultation to see if you are able to dispute any of your debts!
Debt payoff summary
This month our family was able to put $800 toward our final debt payoff. For me this meant finally paying off the new laptop I bought when I started blogging almost a year ago. We had just been making the minimum payment ($30) plus an additional $20 for a total of about $50 per month to pay it off. Naturally, as per usual with credit cards, it was taking forever!
After downsizing 2 years ago, Tom and I got serious about getting ourselves out of debt. Downsizing freed up a huge amount of money for us each month by reducing our monthly mortgage payment. Then, when we paid off $6,000 of debt, we also gained an additional $800 per month! Instead of continuing with our debt payoff, we decided to start saving, improve our budget, and get better about our sinking funds. Then, at the beginning of this year, we joined Dave Ramsey’s Financial Peace University and have really kicked our finances back into gear.
3 Major changes we made
- Stopped paying off medical bills – This sounds so terrible (at least to me) because we have really had a lot of medical expenses in the last 12 months. The thing is, we would pay them off instantly even if it meant taking money out of our savings just to be done with these bills. After going through Financial Peace, we realized this wasn’t the smartest method. Not only were we taking away from our security funds, but we were also letting major interest rack up on our debts by not using our extra funds to pay them off. We now do our budget each month, get at least $200 set aside to put toward our debt on top of our monthly payment and then budget a certain amount to put toward our medical bills.
- We started doing more than $200 – When we did our first debt payoff, we stuck with Dave Ramsey’s suggested $200 per month on top of our minimum payment. This time, we decided whatever extra we could get, we were throwing it right at that debt!
- We stopped saving – Yikes! This one made us nervous, for sure! But, we had already built up our savings and in following Dave Ramsey’s methods, after $1,000 in the bank, you should start paying off your debts! So, we again went to our budget, shifted some things around, and started taking the money we usually put into savings and started adding it to paying off our debt and adding to our sinking funds.
- Why add to sinking funds? –We had major repairs we had been putting off on our vehicles and wanted to make sure we didn’t have to dip into our savings in order to get them fixed. To prevent this, we chose to set aside more money each month to get our cars fixed up as soon as possible.
- Pay off $6,000 in 6 Months with the Snowball Method
- What to do When Budgeting Goes Wrong
- Should I Save Money or Pay Off Debt?
- 12 Ways to Save Over $1,000 Fast
Where the funds came from
- $30 – As I said, $30 was our original minimum payment due on the credit card I used to purchase my laptop.
- $200 – This was $200 we decided to stop putting into our savings while we worked toward paying off our debt. We added this $200 in addition to our minimum payment of $30.
- $270 – This amount is our minimum payment due on the loan that we have out which is something we budget for. Because we are doing the Snowball Method, we did not put any additional funds toward our loan.
- $300 – As you may know by now, I have been working hard to make money with the blog in order to help us pay off our debt. This $300 was taken from these funds. The rest was used to help us make the necessary repairs to our cars.
If you feel like you are a slave to your debts, I highly recommend checking out these 2 companies that offer free debt analysis: CuraDebt and Credit Assistance Network. Because they both offer free consultations, it would be a good idea to get information from both to make sure you are making the best financial decisions for you and your family.
Where we’re at
Because we were able to put more toward our credit card this month, I believe we will be able to pay it off next month and easily put any additional funds toward our final loan (which is our big one.)
Since we were also able to make repairs to our cars this month, I’m hopeful that after going over our budget, we will potentially be able to put even more of our original savings funds toward our final debt.
The Goal: The goal is to hopefully have these final debts paid off by August 2018 instead of the 3 years it would take if we continued to make minimum payments!
If you personally are struggling to pay off debt as well, you can get access to my personal budgeting tools as well as my totally FREE, private Facebook group. In the group, I try to ask questions to help everyone get ideas from each other, learn better ways of budgeting and all around get support when it comes to personal finances!
I hope you found this post helpful and if you have any questions please leave them in the comments below!