Category Archives: Debt Loss

Celebrating One Year Debt-Free

A year ago this month, I paid off the last of my student loan.

Since then, my net worth has more than doubled, now at 85% of my income. More than the positive influence on my net worth, being debt free has provided a degree of flexibility and freedom that I didn’t have before.

For example, I flew back to North Carolina earlier this month. This is a trip that I’ve wanted to do for over a year, but I couldn’t justify slowing down my debt payoff to save for it. Now debt free, I can enjoy such trips without guilt.

Another benefit I see to being debt free is that interest is now my friend. As I was filing my taxes for 2015, I realized that this was the last year I plan on reporting paying more interest than I have received. (Well, at least until I get a mortgage. But I revel in being fully debt free for now.)

While I still practice a tight budget, I much prefer to see the balance of my saving accounts going up to the balance on my student loans going down. I can easily imagine each of those dollars playing their part in buying my dream urban homestead.

I’m anxious to take the next step in my financial plan: buying my house, but I know that I will best be served by preparing first. If I do, I should be able to be permanently debt free in less than a decade after I make that large purchase.

Visiting the beach debt-free doesn't keep it from being a rainy day.
Visiting the beach debt-free doesn’t keep it from being a rainy day.

Frugal Victories

6988272680_97102f42c6_zI’ve been spending quite a bit of time on here lately commenting on reducing our grocery bill, perhaps at the detriment of discussing financial victories we have experienced.

You know me (and Ronnica too)–improving our stewardship of money is a constant quest! I wanted to take a post and share what I’ve been proud of recently, as far as our finances are concerned.

We have been a one-car family for over three years. Darn right I’m proud of this.  We have been a one-car household (remember:  four people and two big dogs comprise our family) for over half of our marriage now.  People said it couldn’t be done, but thanks to careful planning, priorities aligning, and a walkable neighborhood, this has been a noteworthy accomplishment.

I don’t know how long we will be able to swing this, but we have no plans of adding a car any time soon, so as long as we can make one car work for us, we will.  It’s saved us a large amount of money!

We have been without student loan debt for over two years.  I wish we could say “completely debt-free” but the mortgage alone precludes this.  We’ll get there–in the meantime, let me say that not paying a student loan bill has been pretty awesome (as Ronnica can attest to!).

We continue to be on-track for savings–including retirement and college.  Without delving into specific numbers, I will say that I am pleased with our progress in saving for our emergency fund (we’ve needed it more than once!), retirement, and college for the kiddies.  There are times where I wish we had more funds to play with right now, but knowing we won’t have to worry about the future as much (because, as a worrywart, I worry no matter what) is a relief.

What victories have you celebrated lately?

Photo by Phillip Taylor at ptmoney.com

Updates on the Striving Stewardess

A few months have gone by since our last updates, so here’s updates on things we’ve talked about previously:

Ronnica’s Updates

How I Paid Off $10,678.28 in 8 Months

It’s been over 4 months since I got out of debt. The cool thing about not having a mortgage is that I’m completely debt free.

Since then, I’ve been focusing hard on building emergency savings and adding to my retirement account. To balance my two goals, I’ve decided to put 20% of my savings towards retirement (my 401k contributions are handled separately).

How it Works: Living without Air Conditioning

This is the first summer that I’ve gone completely without air conditioning. I’ve become unapologetic about it: if someone is at my house I’ll give them full control over the fans, but do not turn on the air. While it doesn’t get as hot here in Colorado as in anywhere I have lived, it has regularly gotten into the lower to mid-90s.

Yes, I’ve sweat a lot, but I don’t think that’s a bad thing (regular showers are a must).

Parsley has my best performer this year (good for my ranch dressing!).
Parsley has my best performer this year (good for my ranch dressing!).

Ronnica’s Garden Plan

Sadly, this has been my least productive garden, apart from the year I stopped watering due to anemia-caused exhaustion.

The primary cause was the cold and rainy weather we had for most of May. I also tried a few new-to-me varieties that I’m not sure did as well as I would have liked.

The great thing about gardening, though, is that every year is a learning opportunity. I’m going to take what I’ve learned to make better choices next year.

And there’s always my winter garden (details to come).

Amanda’s Updates

Giving Our Time

Just a couple of months after writing this post, an opportunity to give my time presented itself:  serving on the pastoral call committee of our church.

Although we have only met a few times so far, and there is a good chunk of time I have to commit (a few hours a month for meetings and ultimately interviewing potential candidates to serve as our pastor), it is a volunteer position that is well-aligned to my gifts, one that is fairly flexible with our family schedule, and most importantly, is vital to the future of our congregation.  It’s a great opportunity!

Grocery Shopping

It has been six months since I first posted about my grocery shopping method (one word:  methodical).

Since that time, a lot has changed–for starters, the national egg shortage has resulted in eggs no longer being the least expensive item in my cart.  I have also lightened up quite a bit in my grocery shopping prep, because where I get most of our food now (Aldi) doesn’t accept coupons, so that actually saves me time…but also because I’ve become a bit lazy.

Our grocery bill has also crept upwards, due in part to a sales tax increase and cost of food steadily increasing, but also due to the aforementioned lackadaisical attitude.  Since grocery shopping is one of the easiest ways to help or hinder a family budget, I have been working on reducing our grocery bill.  Stay tuned later this month for how that went.

Fall Purge

A quick look at the calendar tells me that, yes, fall is indeed upon us!  Since Riley has started working from home several days a week, this has forced us to adopt a whole new way of looking at cleaning and organization; with no home office, we have had to turn “the dungeon” into a multipurpose area.

That has meant–you guessed it–a whole lot of purging.

It’s a work in progress.  But it definitely doesn’t look like this anymore…

unnamed (5)

…and for that I am very grateful.

How I Paid Off $10,678.28 in 8 Months

My thermometer is full!
My thermometer is full!

I’ve found a lot of inspiration from other’s debt-free journeys, so this is mine.

When I started my job in September 2014, I owed $10,678.28 on my student loan. That was my only debt, but it weighed heavily on me.

I graduated 10 years ago next month with $19,125 in debt (plus interest). Between graduate school and unemployment, I had 5 years of deferment, of which I took complete advantage.  That means it took me 5 years to pay down my debt which is longer than I would have liked, but half of that payoff has been in the last 8 months.

When I accepted my current job last fall, I wasn’t sure that I’d be able to pay more than the minimum payments on my loan. On paper, that was all I could afford. But with single-minded focus, I was able to find the money needed to pay almost $1,000 a month.

I really didn’t expect to have it paid off that quickly. I made my debt thermometer with the stretch goal of having my loan paid off in December. Turns out, that wasn’t much of a stretch.

Including interest, I paid $10,865.27 in 7 1/2 monthsSo how did I do it?

$1092 – Regular monthly payments (if that’s all I had paid, I would still owe almost $10k!)
$3000 – Savings which I emptied out to finish paying off my loan
$1732.38 – Income earned from working overtime
$1350.37 – Extra paychecks. I get paid every 2 weeks, but I budget for 2 paychecks/month. The bulk of those 2 extra paychecks went to my student loans.
$1085 – Tax refund. I don’t recommend saving in the no-interest bank of Uncle Sam, but not working for several months isn’t factored into the tax withholding tables so I had extra withholding coming to me.
$938.16 – Extra income from working a non-standard shift (since I prefer these hours, it’s definitely a win-win)
$465.96 – Work bonus
$391.61 – Cash gifts I received
$353.64 – Redirected money from over-budgeting 
$254.51 – Redirected money from my “Buy Little” month
$136.19 – Money from credit card rewards (don’t worry, I pay off charges as soon as it hit the card)
$58 – Income from odd jobs
$7.45 – Interest on my savings account

When I compiled this list two things stood out to me:

Every little bit counts, and

I could have reasonably been justified to spend any of this on other things. While I haven’t completely deprived myself, I have largely chosen to deny instant gratification in order to accomplish this larger goal.

It was worth it to be free from debt. I can now choose to do other things with my money and let interest work for me, not against me.

So I celebrated by creating a new set of thermometers. Maybe I should aim for completing these 7 months before my stretch goal date as well?

savings thermometers

Updates on the Striving Stewardess

Since the Striving Stewardess has been around for a few months, we wanted to take a few minutes today to update a few of the previous blog posts we’ve done. After all, we’re constantly learning and adjusting.

Ronnica’s Updates

The Art of Sabbathing
My schedule has changed since I wrote the post on Sabbathing. I now have Sundays and Mondays off, so I’ve moved my weekly Sabbath from Saturday and Sunday.

I’m still figuring it out, though, as I don’t find purposeful rest natural. I still find it a useful practice to be purposeful in work and in rest (even if that purpose is to remember that I’m limited).

debt thermometerDebt Loss Motivation
My thermometer is filling up! I’ve been blessed with extra income opportunities which has helped me pay down my debt faster than I had hoped possible.

My Buy Little Month has also helped,  allowing me to put an extra $200 towards my loans, but more on that on Monday.

At this point, I’m trying to stretch myself to have the debt paid off by August. The thermometer continues to be a great visual to excite me towards my goal of being debt-free in six months.

How It Works: Going No ‘Poo
Ironically, shortly after I posted this, I shampooed my hair a couple of times. Even shampooing it once throws it off a lot, so it takes a while to get the natural oils in balance. I’m still getting used to the dry Colorado climate, too, but I’m still pretty happy with my hair routine.

I plan on giving up conditioner as well (replacing it with vinegar) in the next months. I just want to simplify even more.

Amanda’s Updates

More Thoughts on a New Year

I chose to make some New Year’s Resolutions, some of which I shared here with you. January was a challenging month for the “Reduce expenses by 5%” goal; since we get paid every other week, that extra paycheck was super tempting.  Fortunately, there are eleven more months to work on this!  The others are progressing nicely—especially the “Mama Time-Outs.”  I find I’m better able to do all I need to do if I can take a step back and approach a challenging situation anew.

The Fall Purge

What can I say?  Christmas happened, as did a third birthday for Bean.  We are back to clutter central, especially in the upstairs portion of the house, where the bedrooms are.  The good news:  the fall purge will help make the spring purge go much smoother!

How it Works:  One Car

Since starting this blog in early November, we have added to our family—an 85 pound 10404208_10102487618250049_7789266923233122086_n“teacup mastiff” who answers (most of the time) to Wally.  This addition has made extended journeys involving all six of us something of a packing challenge, to say nothing of a smidge uncomfortable.  Looking at what our future may hold (kiddos in school and activities, for starters), we have discussed getting a bigger car more seriously.

We have also toyed with the idea of getting a second car, though that’s certainly not in the short-term plan, and is definitely a last resort.  Right now, priorities being what they are, we make do with our family of six in a Honda Civic just fine—so long as no cross-country trips are in the future!

The takeaway:  Flexibility is key not only in making a one-car household work, but also in making plans for the future.  Stay tuned to see how we continue to “manage the gifts we’ve been given with grit and gumption”!

Buy Little Month

Blue Piggy Bank WIth CoinsMaybe you’ve heard of a “no spend” month. I really like the idea of purposefully giving up spending for a specified amount of time.

However, I’m not a fan of the name.  Unless you’re a hoarder who lives on a farm (or doesn’t eat fresh foods), it’s highly unlikely you can spend nothing in a month.

So, I prefer the name, “Buy Little.”

I’m going to be practicing my first Buy Little month in January. The timing is no accident: I’ve started to get back in the habit of outspending my budget and I want to stop that. Add in the excesses of the holiday season, and I can definitely use a budget and habit cleanse.

So what rules will I be playing by?

1. Fixed expenses like rent, utilities, and insurance don’t count. I like having a roof over my head.

2. If I need something, use something I already have. This will mean getting creative with my food options in particular. There are meals to be had in my cabinets and freezer.

3. If I can’t make do with what I have, I’ll shop my own grocery reserves. These are items I bought on sale previously out of a separate replenishing fund. More information on the system I use, check out my friend Rachel’s blog, where I got the idea.

4. If I absolutely need something and I don’t have something that will work, only then will I buy something.

There are 3 budget items that will be a part of my Buy Little month:

Groceries ($50/week) $250
Eating out $40
Transportation $150

That means that I could save up to a max of $440 by not spending. Of course, that’s not likely…especially since I still have to show up for work or I’ll have a bigger budgeting issue. I’m aiming to spend no more than half of my budget: $220. The money I save will go straight towards paying down my student loan.

I’ll be keeping track of everything I spend in January which will be good accountability. I’ll also write a post at the end of my Buy Little month to share what I have learned.

Photo by Ken Teegardin

Debt Loss Motivation

Like many Americans, I’m in debt. The amount of our national debt (at $17 trillion) gets a lot of attention, as it should. But according to the Federal Bank of New York we Americans carry almost $12 trillion in consumer debt. Like country, like citizen.

Sure, some a lot of that $12 trillion is “good” debt like mortgages and student loans. While some debt is certainly worse than other kinds, can we please all agree to stop calling any debt “good”?

I’m currently just over halfway done paying off my student loan debt from my bachelor’s degree.  After you count out the five years my loans were in forbearance, that leaves almost five years that I’ve spent actively paying down the debt.

I’m not willing to wait another 5 years before I’m debt free. Though I don’t make as much as I wish, I believe that I will be able to pay off the remaining debt by my next birthday (one year from today).

So how do I remain motivated, though I’ve been fighting this debt already for 5 years? One of the biggest obstacles to debt loss is motivation. After all, if properly motivated we can do almost anything. But debt loss is a long-term goal, so I have to maintain motivation until it is completed.

In order to get out of debt, I have to remind myself often as to why I am depriving myself short-term pleasures. Here are a few things that I’ve found helpful for motivation:

debt thermometerA debt thermometer

We’ve all seen thermometers for fundraisers. I would never have thought to do one for paying down my debt, but Amanda did one first.

I’ve got mine posted on my fridge so I see it every time I enter my kitchen. One of my favorite parts of making a payment towards my loans is getting to mark it on my thermometer.

Every little bit counts

If you were particularly observant to my debt thermometer, you’ll notice that I made ten payments in two months. Most of those payments weren’t particularly substantial, but like small chops with an axe, collectively they will fell the tree.

More importantly, it feels like I’m making progress. Every time I have unused money in my budget or receive extra income, it goes towards my debt immediately. Paying it at that time instead of in one monthly payment only makes a few pennies of difference, but it makes me want to continue to make payments.

Give yourself some wiggle room

While the majority of my disposable income is going towards my debt, I still make room occasionally for small discretionary things. This is to keep me from getting burned out. I keep these indulgences small and planned so my eye is still towards paying off debt.

After all, being debt-free is the luxury I want.