Hey there! If this is your first time visiting Coffee + Moxie, please read Our Debt Story to learn why we are on this Destroy Debt journey! You can also learn about our long and short term goals in this post here.
I don’t know about you, but I feel like the month of April flew by! I don’t know if it was the Easter holiday, the heightened outdoor activity due to the warm weather, or the fact that we worked on tackling some projects in our home, but April was a blur. With the arrival of May comes the time to update you regarding our debt free journey! Read on to find out how it went!
DEBT SNOWBALL METHOD
- Arranging debts from smallest to largest (don’t pay attention to interest rates)
- Pay minimums on all debts except for the smallest
- Pay the minimum on the smallest PLUS whatever extra money is available that month
- Once the smallest debt is paid off, take that minimum payment and add it to the next smallest debt minimum payment (this is what begins the “snowball” effect!)
Going into April, the balance of our smallest debt (a school loan) was $3,829 dollars. Our goal was to pay and additional $400 over the minimum $88 monthly payment. We didn’t quite hit our goal this month but did manage to pay off an additional $300. It’s really exciting to see the balance continue to fall drastically month after month and it helps us to keep pushing toward our goal to get out of debt.
We are doing a better job of sticking to our budget in most categories, but we are still dealing with individual weaknesses that cause us to overspend in certain areas. My biggest enemy is my favorite coffee shop. Whenever I am nearby I HAVE to get a frozen salted caramel latte…at least that’s what I tell myself. It’s non-negotiable. I mean, I can’t NOT get my coffee. I’m a mom running on fumes most days. I need the boost!
But what I am realizing is that stopping for coffee has become more of a habit than anything else. I’ve grown so accustomed to having one whenever I run errands that I find myself in the drive thru regardless of whether or not I’ve stopped to ask myself if it actually sounds good.
If my husband aids in the overspending it usually means our food budget went out the window. The man loves to eat out. It’s his kryptonite. And I’m not gonna lie, if he suggests an option that fills the family’s bellies and doesn’t require me to cook dinner or clean it up…I don’t have to be asked twice!
We hit another snag this month but it had more to do with the dynamics that were occurring in our household regarding our finances.
I act as the CFO of the family. It’s my job to pay the bills and do the budget so I know how much money we have and where it’s supposed to go. I keep my husband in the loop as much as possible but he doesn’t think much about the finances since he knows I’ve got it taken care of. But that’s really not okay because it unintentionally creates a dynamic where I have more say over how money is spent.
A couple of weeks ago, my husband showed me a purchase he wanted to make. It wasn’t a big purchase…just a few books costing less than $50. But I looked at him and said, “Sorry Hon, could you rent them from the library? We don’t have enough in the budget.”
He got a bit frustrated, and rightfully so. He rarely buys anything for himself and more often than not, whenever he does want to buy something, he’s told it’s not in the budget (even though I might have made a purchase earlier that day that I couldn’t pass up because it was a S-T-E-A-L).
And that’s really not fair. He works hard to support our family and should be able to have some spending money to use for whatever he wants without checking in with me to make sure we can swing it. So we had a discussion mid-month and talked about how we needed to make some adjustments.
Changes and Improvements
We decided that we will have budget meetings at the beginning of each month to take a closer look at our spending habits from the previous month, find where we can do better, and reset our focus towards our financial goals.
This way, he will have a more active role in our family’s finances. And hopefully, it will reduce the common frustrations we experience from not being on the same page.
We also talked about holding each other accountable. If I want to buy a coffee or my husband wants to eat at Chipotle but we’ve already maxed out the budget in those areas, we have to be able to hold each other to it. Even if it means more dishes for me or a moody wife for him!
Another change we want to make is to budget for “pocket money”. Each of us will receive a designated amount of cash for the month that is ours to spend however we wish without having to check with each other. That way, when I find a deal that is “too good to pass up” or he wants to go out to lunch with a friend, we can do so without feeling guilty that we are overspending.
Hopefully, these changes will not only improve our chances at sticking to our budget but will also serve to unite us further as a team with equal input and participation in our journey to become debt free.
Unfortunately, we didn’t receive any additional income from work travel this month to put towards debt. I try not to depend on money from this category for our budget since it can change drastically from month to month so I don’t think it really affected the overall picture.
PUTTING IT ALL TOGETHER
We set a goal to pay off an additional $400 of debt. We didn’t quite hit that goal but we did manage to pay $300 extra. This brought debt snowball total to $388 when you include the minimum payment which brought our loan balance down to $3,470! Even though it wasn’t the best we could do and we didn’t hit our goal, we are focusing on the small wins to keep us motivated.
We are finding out that there is still so much to learn when it comes to effectively managing a budget. I think the best thing we can do is continue to look back on how the month went and create a plan to improve.
We will have to cash flow a few events this month, which will likely put off our ability to pay extra on debt. Mother’s Day is next week followed by our daughter’s birthday party, so we will need the extra money for gifts, food, and decorations. While those things will definitely affect our budget, I am hoping to save an additional $100 for some other expenses we have coming up in the near future as well.
It’s not much fun knowing that we won’t see our debt balance drop as much this month, but that is just the nature of this process. Each month brings new and different expenses in addition to what we regularly budget for, so we just have to take it in stride and keep moving forward.
What’s key is that we aren’t using our credit card to fund the extra purchases like we would have in the past and I think that’s something that we can be happy about!
That’s all for now! Take care!
P.S. Are you currently working to pay off debt? I’d love to hear all about your “why” for doing so! What are your goals and dreams? Comment below:)