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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.
March was a great month in our household filled with some needed changes and big money wins! However, it didn’t come and go without its own challenges that we are hoping to learn from. But it helps me to take a step back and realize that this is a process and one that requires some behavioral changes. Those changes aren’t going to happen overnight. There will be some setbacks. And as long as we view those setbacks as an opportunity to do better instead of an excuse to give up, I think we are on the right track. Let’s dig in!
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 this month, the balance of our smallest debt was $4670 and we set a goal to pay an additional $700 in addition to the minimum $88 payment. I am so happy to report that we hit out goal! This brings our balance going into April to less than $4000! It feels really good to see that number go down so much in such a short amount of time. It is so, so awesome to see the progress we have made already since starting this journey and although we have a LONG way to go, it’s focusing on the little wins like this that help us to keep going!
There were a few things that happened this month that affected our budget, the first of which being that we didn’t actually write one out. Instead, we had a vague idea of what our budget was, so I know that caused some excess spending in certain areas. It was also a struggle to actually track our expenses since we didn’t have any solid numbers to go by.
Our oven broke down in the middle of March which threw a wrench in our food budget. I use our oven for most of our meals since they very often consist of a roasted veggie of some kind, so going without one for two weeks was a challenge. Even though I made a lot of slow cooker meals during that time, we ate out more often than I would have liked. Although eating out was a huge problem for us in the past and we are doing so much better now, I think we can improve even more.
Seasonal Money and Decluttering
We received our tax refund this month, which allowed us to make few bigger purchases that were long overdue. It also helped us hit our debt goal this month since we likely went well over budget in a few areas. One of our personal goals is to optimize our apartment space for functionality and having an office space from which to manage the finances and run my blog was at the top of our list. We had some furniture that wasn’t of much use to us that was taking up much-needed space, so we decided to sell those items and use that money toward the purchase of a desk, chair, and supplies. It was a very welcome change in our home and I am happy that we were able to offset the cost by selling our things rather than tossing them out. We were also in need of a new computer which was purchased with our refund as well!
We had approximately $250 in additional income from my husband’s mileage check that contributed substantially to our ability to pay down our debt.
Putting It All Together
We set a goal to pay off an extra $700 worth of debt this month. We hit that goal and are extremely excited about it! However, we can’t help but think of how much more we could have paid off if we were more focused. While I don’t have concrete numbers to go by, I have a feeling that we could have paid off significantly more if we had written out our budget and tracked our expenses.
We had a few additional expenses this month but were able to cash flow them using our tax refund and selling some of our furniture. The experience of selling unwanted items was great because we are learning to be creative with how we reach our goals. In the past, if we didn’t have the money on hand right when we needed it, we would have charged the expense. The sense of accomplishment we had from doing it this way instead was so much more gratifying.
I think we are going to have to set our debt goal a bit lower for April. Our daughter, C, had a leg injury that required multiple doctor visits and we are now beginning to receive the bills for them. We will also be planning for our youngest daughter’s birthday so there will be that expense as well. All that said, I think a reasonable goal is to pay $400 extra on debt.
I’d also like to try something a little different in terms of our budgeting goals that may help us to stick to them better. I’ll let you know next month how it works out and if it’s something I would recommend!
Okay, so what about you? Were you able to create and stick to a budget this month? What were some challenges? Where did you succeed? What goals do you have for April? Let me know in the comments!