Saturday, January 30, 2016

January 2016 Update: Total Debt of $79,215.19

Wow, in many ways, this month has flown by, yet as always, I approach the end of the month feeling like I wished it was over so that we could transfer expenses to the next month! Our debt remaining as of today is $79,215.19. This includes a $465 payment we made to our student loans yesterday, but which has not yet registered.

I had a lot of high hopes for this month. After all, Christmas was behind us, and January did not seem like it would hold a lot of extra expenses. At least planned ones.

I took extra time this month to meticulously comb through each and every expenditure we had related to this month. I was inspired by Stephanie's post on their annual spending, and resolved that I would track down every dollar and cent that we spent this month. I don't know why I struggle so much with this - I majored in Economics and had two years of engineering math as well, but those little purchases just seem to escape me. I think part of the reason is that the spending is coming from different sources (we use a credit card and debit card) and different people (my husband and I). And honestly, I know there are times I just don't want to add another expense to the month, so even though we make it, it doesn't get written down.

That said, when I added up every expense we had, I was surprised that we didn't go over too much, and that the spending that was over budget was something we can easily rein in in other months. We had relatives visit for five days, and while it was good to see them, it was a challenging situation because we want to "have fun" and eat out with them, but our budget cannot afford to do that very much. And since they were in town, my husband and I took the opportunity to go out for pizza since we had free babysitting. But it was one of those things where I was really stressed about the eating out part, and then I got discouraged over always being the ones who "couldn't" afford things, and it took awhile to get over it and keep plugging away at the debt.

Since I took the time to tally up our expenses, I thought I would list them:

Food spending: $374.94 *
Gardening: $18.54 - I got a great deal on a Greenhouse from Menard's for starting seeds
Gasoline: $40.67 - WOW - can I just say I'm loving low gas prices?
Homeschool: $11.22
Insurance: $79.52 (includes life and auto)
Miscellaneous: $94.06
House and subscriptions and medicine: $40 - these are savings we have for annual expenses
Mortgage: $675
Orthodontist: $95
Restaurants: $74.20
Security: $47.22 (includes ADT and computer backup)
Tithe: $385
Utilities: $281.53 (includes water, sewage, garbage, natural gas, electric, and Internet)
Cell phones: $52.54
Debt: $759.96 (auto loan and student loans)

Total spending: $3029.40

* some of the miscellaneous expenses are food expenses that were purchased at the Dollar Tree, but I did not break down the receipts - my estimate is that about $20 of the Dollar Tree expenses were food)

Our take-home income for the month was $2935. This is after paying health insurance premiums, hsa contributions, retirement, and taxes. $2935-3029.40 = -$95.40

We went over-budget by about $95. While this is discouraging, we do have savings to cover it, but I certainly don't want to do this every month. That said, some of these expenses were related to categories we planned on spending on, like clothing, gardening, and homeschooling.

Now onto the nerdy number-analysis - if your eyes are already crossing, please feel free to stop reading now :). As I look at these expenses, I realize that while we went over budget, many of the "one-time" expenses are avoidable in the future. Our atypical expenses were:

* Homeschool: $11.22
* Miscellaneous: $74.06 (adjusted for the food)
* Gardening: $18.54
* Restaurants: $70.20 ($4 is for coffee which is a regular purchase)
* Utilities: $23.77 (we switched providers and had our new bill come earlier than the other one, resulting in two internet payments in one month)

Total atypical expenses: $197.79

As I looked at the numbers, I realized that if we didn't have those atypical expenses, we actually would have come under budget by more than $100. This is encouraging to think about for the month to come.

And just to spur me on to paying off this debt, here's another thing to consider: if we did not have debt (or orthodontia), we would come in under budget by around $950. Considering that our take-home pay is less than $3000, that is a significant savings rate.

I think that when it comes to paying debt, it's also easy to fall into discouragement when you have expectations that don't work out as you hoped. I had hoped that we would come in under budget for our food, and that didn't happen (but at least we stayed on budget). Yet while we had more expenses than I had planned for (medications, clothing, restaurants, etc.) we still managed to pay our planned amount toward debt.

Remember, for those of who you are also in this debt journey, numbers are important, but you are also more than a number. I am trying to focus on other areas of my life while paying off debt because truly, I have so many other blessings - health, family, a home (that must be cleaned . . . sigh), a sunny backyard for a garden, hobbies to pursue, and most importantly, God. I hope that the rest of you have also seen success as well - here's to February!

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