Phew, January is finally over! Did anyone else feel like it just dragged on and on? (Did you see the memes?)
It was long but it was a great month! We started the year finishing up our Christmas break and taking care of flu-ridden family members and (almost) avoiding getting sick ourselves.
The end of January/beginning of February is always a little hectic for us because it’s birthday time! We have my mom’s birthday, Hayden’s birthday, my father-in-law’s birthday and finally my dad’s birthday all in a row. We had a wonderful time this year celebrating everyone.
Before we get into the numbers for January I have a confession to make. We have more debt then I’ve been letting on. I know, I know, how could I?? I’ll tell you!
Aside from our credit card debt we also have a car loan. We purchased a mom-car last January – Aurelia was due in March and not only did we not feel safe in our 20 year old SUV, but we also knew we couldn’t get by with one vehicle for much longer.
Having had two very bad car buying experiences previously (ie 20% plus interest loans and slippery, slimy, lying salesmen) I went in to the dealership determined to not take any crap. In retrospect being a cranky, uncomfortable 7 month pregnant woman was probably also a factor, but I’ll admit that I was still shocked at the outcome! We bought a 2016 Honda Fit for $24,634.87 and qualified for a 1.9% APR 72 month loan. That’s a measly $1450.01 in finance charges, and when we pay that baby off early it will be even less.
I didn’t mention the car loan before because that has never been our problem – it’s the credit cards that keep us in perpetual debt. Those two previous car loans? We got fed up pretty quickly and doubled our payments to pay them off early both times!
So, there’s our truth. Now everything is on the table! Let’s take a look at January.
Income: $4380 (actual $4719)
Savings: $175 (actual $391)
Debt payment: $1725 (actual $1785)
I think it’s safe to say we killed it this month! Thanks to some side hustlin’ we now have a full $1000 emergency fund and still had some leftover to boost our avalanche payment.
Since we paid off our first credit card in December we are now working on my Barclay account. We paid almost $1000 on it in January bringing the balance from $1804 to $867!
This brings our total credit card balance to $11,283.93 and our total debt balance to $32,036.45.
Our first goal this month is to use the cash envelope system. I had to rework our budget spreadsheet and it was really exciting to withdraw and distribute the cash after payday. I can already see how this is going to help us stay on budget and knock our debt out fast.
We’re still working on our Christmas fund and have added a vehicle registration sinking fund as well. Our goal for both of those is $90.
Our daughter’s fall preschool registration snuck up on us so our debt avalanche will be a little smaller this month at $1088 (including minimum payments). But it turns out we gave the government a sizable loan this year and we’ll be getting $4598 back. If all goes according to plan we’ll have two more credit cards paid off before March!
We have a new debt free date (from credit cards) of July 2018. At that point we plan to take two months off to cash flow a trip home to Alaska and then get to work on our car loan. That gives us a projected totally debt free date of April 2020.