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Hey there! I hope May was an awesome month for you! For us, May was a month of maintenance regarding our finances. With a few bigger expenses that we needed to fund, our basic goal was to not add to our debt balance and to cash flow everything we needed for the month. Read on to find out how we did!
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!)
At the beginning of the month, our smallest debt balance (our school loan) totaled approximately $3,470.
We didn’t set a debt snowball goal this month due to the expenses we knew we would encounter with Mother’s Day and birthday expenses for our youngest daughter.
Our main goal was to continue to pay the minimum amount of $88 on the school loan and cash flow everything. We felt that if we could manage that we would be happy because in the past, we would have just charged irregular expenses. Not a great behavior if you’re wanting to get out of debt! I mean if you’re trying to get out of a hole you have to stop digging first. Novel concept, huh?
Anyway, even though that goal was relatively small it was important for us to set it so we had something to aim for.
Goal Status: Achieved!
As you might have read from our previous progress report, if anything is going to wreck our budget it’s going to be coffee shops and eating out.
This month, however, we did a lot better with avoiding those areas where we tend to overspend and so we were able to stick to our budget with greater success.
Aside from ordering the occasional pizza, we only ate out twice…once on Mother’s Day and once “just because” which was a huge improvement for us.
As far as my coffee habit goes, I think I have managed to whittle my coffee trips down to maybe one a week so we are definitely making progress there! Plus, I found a new way to jazz up my Keurig coffee with International Delight’s One Touch Latte so it makes me feel like I just visited a coffee shop without spending $5 each time I crave that experience.
At the very least, it’ll do until the hubs decides to spoil his wife with a fancy all-in-one coffee bar.;)
We celebrated our daughter, E’s birthday this month which we knew would be a significant expense since the guest list was over 40 people. I was able to keep costs down by borrowing decorations from a friend and making E’s birthday cake (with inspiration from Pinterest, of course).
I even managed to get an artistically-lacking photo! It isn’t Pinterest worthy but it was a labor of love so it’s a win in my book!
My husband travels much less for his job during the spring and summer so we didn’t receive any additional income this month.
Putting It All Together
Even though it’s less exciting, our goal was to get through the month of May without adding to our debt balance by cash-flowing the irregular expenses we had, such as E’s birthday party and Mother’s Day expenses. We also had hoped to save an additional $100 for upcoming expenses and pay $88 on our smallest debt.
Although we didn’t hit our goal of saving the extra $100, we were successful in paying cash for everything else. I’ll be the first to admit that party-planning isn’t a strength of mine so I knew I would encounter last minute expenses.
We also made the $88 payment on the school loan, even though we technically didn’t have to because it was important to us continue reducing our debt, no matter how small the dent. That brought our debt balance on that account from $3,470 to just over $3,400 after interest is figured in.
In slower months like these where we can’t afford to make a drastic payment on a debt, we just have to keep in mind that progress is progress. We just need to keep our heads down and press forward to the next month!
This upcoming month has a lot of irregular expenses as well such as paying for a bridesmaid dress, airline travel, and a mini-vacation that my husband planned for us, so we will be paying for those upfront.
Even though a vacation wasn’t something we were initially planning to do this year, we are keeping costs down by making it a long weekend trip with a group of friends and family and splitting lodging and grocery expenses.
We do expect to receive some additional income through a coaching stipend my husband will receive and a mileage check for work related travel. All things considered, we’re thinking we should still be able to pay extra $300-$400 towards our debt!
If everything goes as planned, our school loan balance will break under the $3000 mark so I am excited to hit that milestone!
That wraps up our May Destroy Debt Series Report! Be sure to come back for the June installment!