The road to debt freedom is full of potholes

The road to debt freedom is full of potholes

Photo courtesy of Christian Schnettelker

I have a very specific debt plan. Each month we pay off at least $3,416.59 on my husband’s student loan. This is the minimum we put in the budget in order to reach the goal. We have been able to stay on track or beat that amount every month since we started this journey in August.

Until this month.

Since we are on a 28-day budget, our budget started last Wednesday. As I pulled together the final budget, I realized that we were going to fall short of the $3,416.59 goal. We had hit a pothole.

Actually, we had hit a few potholes.

  • The first was our sick cat, which drained a huge portion of our baby emergency fund. This month I had to replenish that fund before doing anything else.
  • Our quarterly water bill was due this month and has jumped dramatically. That also had to be paid.
  • Our gas bill was higher than last April because it’s been cold in Connecticut. Luckily it is finally starting to warm up.

These three items threw my budget off by $939.43.

I started to panic! The goal would not be met this month! Doom and disaster had hit our budget! I started cutting back on other things to make up the difference. Surely, I could pull $939.43 out of somewhere. My husband thinks I can make money just magically appear but not $939.43.

I needed to take a step back and take a breath. Perfectionist Kristin needed to chill out a bit.

It was time to remember some very important facts:

  • We could still pay all of our bills.
  • We were able to replenish the emergency fund.
  • Even with the extra bills, we were still scheduled to pay $3,004.25 on the student loan.
  • When we first put the snowball on the wall in November, we were scheduled to pay everything off by November 2016. We are now scheduled to pay everything off in July 2016. In six months, we’ve cut our debt free date by FOUR MONTHS.
  • Did I mention I am teaching a summer class to make extra money?
  • Did I mention I will be getting an extra check from work in September?
  • Did I mention I’m completely insane when it comes to paying off the debt? (Just wanted to make sure you were still paying attention)

Once I remembered all the progress we had made, I realized how silly I was being over $400. It was not the end of the world. We hit a few potholes.

Don’t let a pothole keep you off the road. Keep driving. Keep on track. We’ll get there.



Take control of your spending!

There appears to be a stigma about budgets. It has become a dirty word to many.

People tell me budgets are restrictive. They can’t do what they want if they have a budget. A budget is limiting. It is controlling. 

Who would make your budget? Your mom? The mailman? The guy next door?

YOU make your budget!

Since you make your budget, you can put whatever you want into it.

Yarn habit? Yup!

Action figure collection? Sure!

Want to go on vacation? You can budget for that too!

The only limitation on your budget is your income. Now for some people that might be a problem. For the vast majority of people I council, they make enough money to pay all their bills and there is money left over.

It’s time to take control of your spending!

Where did all my money go last month?

Have you ever asked yourself that question? Those of us on a budget never need to ask that question because we made a spending plan before the money went out the door and tracked our spending during the month to ensure we stayed within budget.

A budget

Can you budget for fun things? Absolutely, just make sure your budget aligns with your goals.

If you read the blog, you know our goal is to get out of debt. But that is really just part of a bigger goal. My husband would like to transition out of his full-time job at 55 and focus on his passion. In order to do this, we need to pay off our debt so we can ramp up our retirement savings. We have chosen to make this a priority so we made the decision to cut back on other things.

Do we still budget for some fun stuff? Of course, but that budget is very small compared to our total income. We each get $50 per month for blow money (some people call it mad money). We can spend this on whatever we want. We also budget $100 per month for entertainment. This two items combined represent about 2.5% of our total budget. Typically, we don’t even spend it all, but it gives us breathing room to have a bit of fun while we are on this journey to become debt free. It also doesn’t stop us from achieving our goal. Currently about 50% of our take home pay goes toward our debt snowball.

What are your goals? Does your spending reflect those goals? If not, a budget could help you get there.

You can read more about how to construct a budget here.

Just remember that a budget is just a spending plan. You design it. You control where your money goes.

How to get your spouse onboard

“How do I get my spouse onboard to budget/pay off debt/save more money?”

I hear this question a lot. Typically, one spouse is ready to get cranking and the other doesn’t understand why there is a need for radical change. The spouse that is onboard starts talking about cutting lifestyle, no vacations, and no restaurants. That is a great way to make your spouse run for the hills!

Essentially, when you say those things to your spouse, you make it sound like you are cutting out everything fun for the rest of eternity. Is that something you would willingly sign up for? I didn’t think so. So why are you onboard? You see the goal, the dream. You see what life could be like without payments. I’m with you. I can see it, too. Can your spouse see it? Maybe not.

Don’t just share the how. Share the why. Dream together. Set goals together.