supplies, personal care products, gifts, clothes and other shopping
purchases, as well as home improvement and entertainment. It’s about a
30% reduction to our spending budget. We’ve almost met our goal to save enough to cover a trip to Disney World in the spring!
(essentially we only have to pay for airfare and 1 child’s ticket). It’s the best time for our family to go educationally
and financially,
but I only feel comfortable doing it if we can make significant
progress on the mortgages too.
I have a confession to make. In January I shopped without ever stopping to add up how much we were spending. There were clearance sales galore at Target. I restocked my gift closet on boy toys, replaced several pairs of shoes and bought several plastic tubs to help with organization. And of course there were lots of great goodies after Christmas that were perfect for party favors and teacher gifts. I also bought several items off of a local swap and shop site that we had been looking for. Ok, ok, that I had been looking for!
Some of the purchases I’d planned to use my own Christmas money for, and others I’d planned to use the money from selling some items on the swap and shop site. Even so, last night I sat down to add everything up with a bit of trepidation. I was actually surprised – Our spending added up to $411.25! After I consider the $45 from selling items that puts us at $366.25 for January! As I looked back at everything I realized why we didn’t go over our budget by a huge margin as expected: We spent less than $90 on groceries last month. We had bought so much sale meat in November and December that we needed very little. I was well stocked on our regular staples, so really I just bought the great sale items and milk/bread/fresh fruit each week. I’d say it’s a great example of how staying ahead of your family’s needs can really pay off!
As far as progress goes on our mortgages, we only applied an extra $35
to the mortgage on our house in Arkansas. The only reason we did that
much was because I set up the draft to automatically pay $35 extra each
month. (Just that small amount cuts about 4 years off the length of the
loan!) I just never took the time to make any other extra payments, although we had the funds to do so. We sold my husband’s truck last week since it was only driven about 10 miles a month. I’ve also been hired to teach 2 classes in the next couple of months so thankfully I’ll also be able to contribute to paying down the principal. Needless to say, we’ll be knocking several payments off the mortgages over the next few months and it’s a great feeling to know we’ll be paying less interest.
If you haven’t been following our quest to pay off both houses and be 100% debt free, you can catch up here.
Getting Out of Debt Step 1: Know how much debt you have and the associated interest rates.
Getting Out of Debt Step 2: Build an Emergency Fund
Getting Out of Debt Step 3 (Budgeting Step 1): Know how much money you have to spend and make sure your tax withholdings are correct.
Getting Out of Debt Step 4: Create a Budget
Budgeting Step 2: Track your current expenses– preferably 1 year’s worth – to see where you’re spending money.
Budgeting Step 3: Make a plan for all your money, taking into account one time expenses.
Budgeting Step 4: Check up weekly
Budgeting Step 5: Reassess monthly
June Update
July Update
August Update
September Update
October Update
November Update
December Update
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