I recently shared that I was starting to pay off my debt this year, and since we’re almost halfway through the month, I wanted to give a quick update! I have already made a bit of progress, and I have some plans for how I’m going to make more.
If you didn’t read my initial post, you can check out my plan for being debt free and catch up on my January plans. If you need a refresher, we are currently working to pay off $47,524.20 in debt, and my first goal is to get rid of my laptop loan, which has $2,373 left on it. I was hoping to pay that off by the end of January. That’s two weeks from now…eek!
So, how is my progress?
Honestly, I’m feeling pretty stoked to be where I’m at even though I haven’t even come close to meeting my goal yet. If I do make my goal this month, it will be because I am owed payments from last year that haven’t hit my bank account yet. What really has me excited is that I’m starting to set plans in place for how I’m going to get out of this hole.
I’ll share the final numbers at the end of January and we’ll see if I make my big goal!
What has helped my mindset so far?
Both my husband and I have set goals for the new year. One of his was to cook more, so he has been buying the majority of our groceries. When I buy groceries, I usually have three kids in tow, and since I’m home all day with them I like to buy a lot of snack food. Since he is on the road a lot for work, he packs a lunch and focuses on making actual meals. He is currently doing most of the shopping and a lot of the cooking, so it’s kept me out of the store and away from making little impulse purchases. Sometimes a little shake up to the way your normal family routine works is a benefit. Hey, I’ll take it.
Another thing that has definitely been helping is using my Start Today journal. This was a great habit I picked up at the beginning of the new year. Every day I write down five things I’m grateful for, and ten things I am working towards. I do this in the morning before I do anything else. So far, it’s been an easy habit to adopt and I haven’t missed a day. Doing this every morning before I leave the house has served as a great reminder of the type of person I’m hoping to be.
Brainstorming what will help us with predictable expenses this year is also making a difference. Our most expensive months as a family are September and December. We have three kid birthdays in the same month as school and activities start, and then a few short months later it’s already Christmas. We decided it made sense to set aside $60 per paycheck starting now, knowing that we have a solid nine months before these expenses come up again. It will feel good to know that by the end of the summer we’ll have almost a thousand dollars to put towards birthdays and back to school expenses and a good head start on Christmas expenses also.
In the past, cash envelopes haven’t really worked for us even though they seem to be a cornerstone in most debt repayment plans. I am considering giving them a go anyway and seeing what happens.
What has been tricky?
Being self employed is weird. I don’t have a steady paycheck. I don’t always know when people who owe me money are going to pay. Sometimes it’s within 30 days of the work I do, and sometimes within 60 days. Other times I have to hunt them down! Work I do this month to get ahead of my goals may not reach me until March.
Also, if I’m counting on bringing in a large amount of money, I need to stay on top of taxes all year. I can get lazy with business income and just worry about it at the end of the tax year, but I don’t want any surprises to come my way in December. For that reason, I’m going to set aside 30% of everything I make to pay in on taxes.
I also want to set up a retirement account for myself, which is a long overdue move for me to make. I’m trying to decide if I should do that NOW, or if I should wait until my debt is paid off. I’m not the best at financial decisions (which is partly why I’m even on this journey LOL) but I suppose now is as good a time as any to learn! Weigh in on the comments if you have an opinion.
So what’s next?
So far, I feel like this is a daunting amount of money to pay off, but I’m hopeful. I bit off a lot more than I could chew this month for a goal, but we’ll see what happens. I am starting to put plans into place for the coming months and that will keep me motivated even if I don’t reach January’s goal.
All in all, I’m full of hope about how I’m going to proceed. I have a few more posts to share about my debt journey this month, so if you’re following along, keep your eyes peeled!