The hardest part of approaching the finish line

Our debt free journey has been a long one. We started our journey in 2008. It’s been a long seven years. Now that we are approaching the finish line, we have also entered the most difficult part of the journey, making it to the end.

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We started this marathon with over $220,000 in debt. We have paid off over $158,000. It started slow but as we cut our budget and increased our income, we started making huge progress. We faltered a bit after we paid off the credit cards but we got back on the track and started running again.

We have $62,071.23 left and it is becoming more difficult to stay motivated.

When we started our minimum required payments were over $2,000 per month. That was a tremendous amount of money, especially since we were making about half of our current income. Today, our minimum payments are $436.48.

It’s easy to get into a false sense of security. When I make those large debt payments every time we get paid, I think of all the things we could do with that money. $436.48 per month isn’t a lot. We could swing that even if one of us lost our job. We should ratchet up our savings, go on a trip, buy my husband a car. There are so many things we could do with that money rather than sending it to the stupid bank.

Then I remember the outstanding balance. $62,071.23 hanging over our heads. It’s like a weight holding us down. While $436.48 doesn’t seem like a lot of money, $62,071.23 sure is. It’s keeping us from fully following our dreams. It is risk that we just don’t want to have.

Next to my desk, taped to the wall is our debt snowball from when we got back on track in August 2013.

Debt snowball

 

It is a reminder every day to keep me on track. It not only reminds me where we are now, but also where we have been and how far we have come.

While I enjoy the sense of security that I have from paying down the debt, I’m fairly certain that I will love the sense of security when that debt is completely gone.

 

Because sometimes you just need a coffee

This morning I woke up later than usual. I was up late last night reading, doing laundry and dishes. I wanted to write a blog post and do a few things for my other site but housework was tugging at me. I packed up my Chromebook and am currently writing this post at Starbucks.

I have three hours to be creative before I must go to work. I could have stayed home and been distracted by counters that need to be wiped down, laundry that needs to be done and odd job phone calls that need to be made. Instead, I am enjoying my skinny soy caramel macchiato and writing this post.

Why you need blow money in your budget

This is why everyone needs a little blow money.

Whatever you want to call it (blow money, mad money, fun money), every budget needs a bit of it. This isn’t lunch money if you eat out everyday. This isn’t entertainment money. This is “I want an occasional coffee while I’m writing” money. This is “I want to meet a friend for lunch” money.

Jeff and I each get $50 per month to spend on whatever we wish. I usually spend mine on coffee, Costco frozen yogurt (wow that stuff is good), the occasional lunch, and books. Fifty dollars might not sounds like a lot but most months, we don’t even spend it all. That $50 saves my sanity, too.

Before we allowed ourselves some blow money in the budget, we would have a few good months and then fall off the budgeting bandwagon. A DVD would turn into other purchases and snowball out of control. We felt like we were deprived because there was no room to purchase a pack of gum. That deprivation led to rebellion and later regret. We would retighten our belts only to fall again.

Blow money made all the difference. We each had a little bit of money to play with, to do whatever we wanted with. Since we started allocating blow money, we have not fallen off the wagon. That doesn’t mean we haven’t had months with emergencies, but we haven’t broken our budget with wants. We no longer feel deprived.

If you are having trouble staying on budget, try adding some blow money to your budget. It just might bring you peace and get you back on track.

Do you work blow money into your budget? How has it helped you stay on budget?

Why I’ve never been so happy to be $99,604.91 in debt

Why would anyone be happy to be $99,604.91 in debt? That is a tremendous amount of debt. Yes, I know and today I’m doing a happy dance about it.

Last week, I was paying bills after we got paid. I logged into my husband’s student loan account to make a large extra payment. After the loan payment, the amount due was less than $3,000. I started running some numbers in my head. Then I started logging in to check my balances.

  • Husband’s student loan: $2,776.48
  • Home equity line: $46,937.24
  • Combined student loan: $49,891.24

Total debt remaining: $99,604.91

We owe less than $100,000! We owe less than six figures. Now we only owe five figures!

Over the last few months, it’s been harder and harder to stay focused. It probably doesn’t help that I keep getting cruise guides in the mail. It also doesn’t help that all we have left are large debts. There are fewer quick wins to keep the momentum going.

Seeing this was just the recharge I needed. Having to pay off $220,000 worth of debt is a long road. When we first started, it was a huge mountain that I never thought we could climb. The weight of it was unbearable. There were times I didn’t think it was possible.

huge mountain to climb

Then we started to hit milestones. Each small debt was another milestone. Paying off the credit cards was a huge step up that mountain. Paying off the car was another. As the debts got larger, there were fewer milestones and it got harder to stay focused.

This is a marathon. Going below $100,000 was the energy drink I needed to keep running after my legs and back are sore and I just want to get in the hot tub on a really big cruise ship.

I’m hoping to pay off the last of my husband’s student loan this month, then it is going to be a while until we get the next debt paid off. I’m going to be tracking $10,000 milestones to stay focused. The debt free date is getting closer. I can’t wait to reach the finish line. Until I get there, I’ll just listen to this:

Do you track milestones while getting out of debt? If you’ve paid off a lot of debt, how did you stay motivated?

I want to go on a cruise

It is cold here in Connecticut. Really cold and windy, with blowing snow. Weather like this makes me think of escaping to somewhere warm. I start to think about sitting on the deck of a cruise ship, drinking something fruity. I want to go on a cruise.

Photo from the upper deck of the Norwegian Epic, looking out into the Mediterranean.

Photo from the upper deck of the Norwegian Epic, looking out into the Mediterranean.

Why I keep going

Saturday, I was having a pretty rough day. I was frustrated with a lot of things in my life and just wanted to stop. I logged into Facebook to play a game check my notifications. Early that morning, I had posted the following on my personal Facebook page:

Close to 10,000 views on my YouTube videos…WOW! Even more impressive when you realize they are accounting videos! WOW!

Not long after that one of my nephews posted the following response:

That’s awesome, and just to think that more people have viewed your tutoring than you could have reached in 10 years in the classroom alone. Spread the knowledge around like a boss Aunt Kristin

Sometimes it takes a little perspective to get the motivation going again. I can’t tell you how much that comment changed my entire weekend. When I started to think of all the students all over the world (THE WORLD!!) who are watching my videos and leaving comments on them about how I was helping them, it confirmed my calling. Were there still some bumps in the road this weekend? Yup. But I approached things with an entirely different way of thinking.

By the way, I made seven more videos yesterday. Thanks, A.J.