My husband and I were talking about our goals and dreams for the future for a good while one evening when a light bulb went off in my head.
I jumped out of bed and grabbed my favorite notebook and gel pen. I knew that NOW was the time to get this down on paper. My husband was pumped about the way our future could look, and I knew we needed a plan to get there.
Many times in the past I’d talk about wanting to start budgeting. I’d get a, “that’s great dear” and a head nod as he walked out of the room. The fact is, crunching numbers and setting spending limits is my thing, not his. He has no interest in the technical side of money and always says that he trusts my judgement.
While it’s great he is so trusting of me, I don’t like having our entire financial outlook solely in my hands. I want to be on the same page with him and really feel like we’re doing this together.
So I knew that now was the time to set a budget for the next month. I started by simply listing each bill we had coming out that I could think of. After writing down all the bills that were coming out, I wrote down one category for gas, and one category for groceries. I then added in some spending money for each of us weekly, and I set a category aside for date night.
Next, I added up all the bills that were coming out, the spending money, gas, groceries, and date night, and then I subtracted all of that from our expected income for the month.
I was shocked to see that even after all the essentials were paid for, we still had $1,580 left over for the month! And since I like nice even numbers, I assigned the $80 to “miscellaneous.”
That meant that we could feasibly be able to pay $1,500 towards debt the next month! I wrote it down big and circled it a few times. Seeing that number on paper surprised me and started a fire in me.
I knew that as long as we received the income we expected to get (which largely depended on my husband’s overtime staying put) we could stick to the budget and make it work this time. Since my new financial habit I had picked for February was budgeting, I was excited to see how we would do with our new budget since we’d never really done one before.
Sure, I’d filled out the budgeting forms and even tried using cash envelopes before. But we were never able to stick to these budgets, and usually blew them a few weeks in.
This time though, things were different. By not setting strict spending categories, and allowing ourselves spending money each week to buy lunch or something small for ourselves, I knew we wouldn’t feel as restrained as traditional budgets felt.
And for the most part, our budget worked. We stuck to our weekly spending limits (I pulled this out in cash before the new week began), and I managed to keep our grocery spending in check. We did fail one weekend on our date night/weekend spending. A night out of bowling with friends turned into an almost $100 evening! But we didn’t let this one setback stop us. Instead, we used it as a learning opportunity and are better prepared for the next time we want to go out with friends.
Since we bought a house the year before last, we were able to get the homestead exemption on our taxes for the 2016 tax year. Unfortunately, our mortgage company would not adjust our escrow payment each month, so we ended up paying way too much money throughout the year towards our taxes.
Thankfully, we received a check from our mortgage company for a little over $1,300. This was enough to finish our baby emergency fund, and pay the rest towards a credit card.
Over payment to escrow refund: $550
We receive our yearly bonus at work in February based on the prior year’s performance, and I was fortunate enough to receive a little over $1,400. We used this money to completely pay off one credit card. Win!
Bonus at work: $1,430
We also paid off about $220 worth of debt through our regular minimum payments on our loans and credit cards.
Regular minimum payments: $220
So thanks to budgeting, money back from escrow, my yearly bonus at work, and regular monthly payments, we were able to pay a grand total of $3,700 towards our debt in just one month!
I wish that every month could look like this. I know that I won’t be getting a check from the mortgage company and I won’t be getting another bonus at work anytime soon. But what I can do is keep budgeting and making our regular payments, and I can snowball the payments from the debt we reduced this month. In fact, with the two debts we paid off, we will have at least $120 extra to put on our debt snowball next month!
If my husband’s overtime stays around for a while longer, we can expect to pay off close to $1,700 next month. If we can keep this up, we will be debt free by the end of summer!
What about you? What’s the most debt you’ve ever paid off in one month? Shoot me an email or leave a comment down below!