Have you ever had a personal loan from a friend or co-worker?
I sure have.
It’s a situation a lot of people have been in, and it has the potential to destroy relationships.
Debt Update: June
It has been a little while since I posted a debt update on the site. As mentioned in my blog post “Is Your Outlook Holding You Back?” we’ve been able to pay down a significant amount of debt over the past year or so. Most of this has been done by snowballing our debt (to the best of our ability). Here’s a debt update with detailed numbers…
Debt Update
The major three things that have happened since our last debt update on the blog are…
- We paid off my husband’s car! That is $175 per month that we now have available to help pay off other debts.
- My N.C. state taxes has been paid off. This will free up about $463 per month.
- At the end of July, I’ll have paid off my higher-interest credit card. We’ve been paying $175 per month since April to get this done. So, the last payment in July will free up another $175.
Altogether, these three things will free up around $800 per month to go towards paying off other debts and saving.
On top of paying those three things off, we have decided NOT to pull out a loan for my wisdom tooth extraction. Instead, we’ve decided to save and pay in cash for it. With the additional $800 or so per month (starting in August), we should have the money to pay for that in the early fall.
Other “wins” when it comes to our debt freedom progress have been paying down the amount on my husband’s tool bills. Each of them has been paid down significantly each month. We should see them disappear in less than a year (nearly $600 per month). Now that a few other items are paid off, we should be able to reallocate the funds to get these paid off faster.
Earning Extra Cash
We’ve both been searching for ways to make additional money as we continue snowballing our debt as well. My husband has been picking up quick mechanic jobs within the community for extra cash (i.e. putting in a battery on the weekend, or jumping someone’s car).
I’ve been looking for things around the house to sell and picking up a freelance project from time-to-time. More recently, I discovered an old coal bed warmer we’ve had collecting dust. Online it says these can go for between $250 and $1,000. I’m hoping to visit an antique store and sell that soon. That extra cash will go directly into paying for my wisdom tooth extraction.
All in all, our debt update for June is looking pretty good. I’m happy about it and can’t wait to see how it progresses in the future. Of course, I’ll keep you all updated here.
Readers, do you have any easy side hustles that have really helped you decrease your debt? Let me know in the comment section below!
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How to “Spring Clean” Your Finances
It is mid-May, which means many of us are going through our closets, deep cleaning our homes, and getting rid of stuff we just don’t need anymore. It feels good to go through spring cleaning each year. These actions help you clear out things that are holding you back. You can do something similar with your money. Here are some ways to “spring clean” your finances.
7 Ways to Spring Clean Your Finances
Spring cleaning your finances, in some ways, looks just like cleaning out your home. You have to literally get rid of things in your budget, clean out closets and sell things, and reassess what you are doing in terms of managing your money. Here are seven things you should do this spring to evaluate your finances.
- Sweep out bad money habits. We all have bad habits that are hanging out in the corners like dust bunnies. Examine your spending habits and determine what is detrimental to your financial goals. For example, a lot of people have a bad habit of eating out when there is food at home. Identify what is holding you back and get rid of it.
- Catch up on any late payments and get ahead if you can. The spring is a great time to hold a yard sale, raise some extra money, and pay off debt or pay bills you need to get current. Get caught up on anything you’ve fallen behind on and try to get ahead where you can. This will save you money in the long run.
- Toss out any debt you may have. Staying in debt is almost like holding onto an old sweater that you never wear. It is holding you back and just taking up space where you could fit something better. Get rid of it as soon as you possibly can.
- Dust off your budget. Take a hard look at your budget and decide if it is truly working for you. Many people don’t think about creating space in their budget for things that truly matter to them. For instance, if travel is something that is important to you, be sure you make room in your budget to do it.
- Create a simple money system to track key numbers. Most people just aren’t paying enough attention to their money. Usually, this is because they make it difficult for themselves to do so. Find a way to tidy up your finances and make it easier to track things like what you are spending, how much you are saving, and debt payments.
- Plan and budget for irregular expenses through the end of the year. The end of the year brings a lot of irregular spending for many families, including holiday spending, travel, and back-to-school costs. Make a plan for how you’ll deal with these expenses.
- Clear out your paperwork. Old, unnecessary clutter, like paperwork, can be a hindrance to your finances. Instead of keeping everything in an old-fashioned filing cabinet, consider how you can start keeping track of things digitally and get rid of that stack of papers. It will help you keep closer track of your finances too.
How Often Should You Review Your Attitude Towards Money?
Annual reviews or taking a moment to spring clean your finances each year is always a good idea. However, the frequency in which you review your attitude towards money may change with time. You may find that a quarterly review is more necessary for you, especially if you have aggressive debt payoff goals. Others may find it easier to do a quick check-in every month. In the end, it is important to find exactly what works for you in terms of reviewing and organizing your money.
Readers, do you have any annual “to-do” items for spring cleaning your finances?
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A Look At The Labor and Delivery Bill From When I Gave Birth
Bills are still trickling in from when I gave birth last August. Our little one entered the world on August 31 and, surprisingly, I wasn’t hit with a mound of medical bills immediately. In fact, nothing started coming in the mail until late November regarding my labor and delivery bill. Here’s a look at what the out-of-pocket cost will be for our family.
The Cost of Having a Baby
While I was pregnant, I researched the cost of having a baby and posted about it here on the blog. For a lot of people, it is shocking when the labor and delivery bill arrives and it is five figures. The average amount most women pay to give birth in a hospital is around $40,000. That’s if everything goes perfectly. Additional drugs or other medical intervention will cost more. For instance, I was induced and required medication for induction. This meant my pharmacy cost while in the hospital was higher than average, but we will look at a break down of the bill below.
There are plenty of other costs to giving birth in a hospital. Many people don’t consider what they’ll eat while they are there (and trust me, hospital food isn’t it). In fact, during COVID, some of the hospital’s services, such as food delivery, aren’t completely available. On top of that, you may be in the hospital longer than you think. My stay started Monday afternoon and we didn’t leave until Thursday morning. Some hospitals may charge parking during that period of time. Be sure you are prepared for that.
Some of these unexpected costs may throw people for a loop, but what really shocks most couples is when the labor and delivery bill arrives.
The Labor and Delivery Bill
The dates I was in the hospital were August 30 through September 2. When the bill came from the medical center where I gave birth the total came to $26,250.40. Thankfully, my insurance is covering $23,548.85 of that. However, that still leaves me footing $2,701.60 of the bill. Here’s a break down…
- Labor Room/Delivery: $17,630
- Room and Board Private (one bed): $4,416
- Pharmacy: $1,772.45
- Anesthesia: $908
- Special Charges: $243
- Laboratory: $1,281
As mentioned above, I had to stay in the hospital a little longer than most mothers when they give labor. So, my room and board and paying for the labor room is a little higher than average. My pharmacy and laboratory costs are a little more expensive too. I went into the hospital because I was having trouble regulating my blood pressure. So, some additional medication was needed. Many people may pipe up and say we could’ve saved money by sharing a room too. During COVID that simply isn’t an option though, and you still have to pay the private room fees.
I honestly chuckled when I saw the bill. The most important part of labor/delivery was the anesthesiologist (that epidural saved me), but it is one of the cheapest item lines on the bill. The room, which is the most expensive part of the entire ordeal, was uncomfortable and the food was poor. At the end of it all though, we got our sweet little Chicken Nugget (her official nickname). She makes the labor and delivery bill irrelevant.
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Dontae and Laura’s Debt Free Story
Today I have another debt free story to share with you!
One of my favorite ways to research for the blog is to interview people who have paid off their debt or are on the path to become debt free.
It’s no wonder that these stories are some of my most popular posts. [Read more…]
Should We Trade In Our Car?
Around the new year people tend to set financial resolutions and plans for the next 12 months. The beginning of the year is also a good time to get a decent price on a used car. As you know, our little family grew by one last year with the addition of our daughter, Dahlia. Before now, we’ve driven a 2015 Volkswagen Golf GTI. However, fitting the car seat in the backseat isn’t the easiest thing to get done. So, we have been going through the pros and cons to try to decide whether or not we want to trade in our vehicle.
A Little Nostalgia
My husband absolutely loves cars. It is something he’s always been passionate about. One of his lifelong goals was to become an automotive journalism, which he accomplished last year. That being said, there is a little nostalgia attached to the cars we’ve had together.
Before we transitioned into being a one-car family, my husband drove around in a tiny 1999 Mazda Miata. We took a lot of adventures in that car. Eventually, Drew wanted to take it to race at the track. Unfortunately, that never ended up happening. We sold the Miata during the pandemic and still miss it dearly. It was such a fun car with so many memories attached to it.
The Golf is no different. For one, it is the first thing Drew and I truly purchased together. We named the car Gerry and we’ve used it as our primary driver now for three years. There have been road trips, it was the car we brought our daughter home in, the car we packed up and moved states away in. So, even though it is a pain to get the car seat into, part of me wants to hold on to Gerry just a little longer.
Will We Make a Trade In?
While we were initially mulling around the idea of trading in our car for something that would lower our monthly payment, we probably won’t be making a trade in unless we find a crazy good deal. The car seat dilemma is a temporary one. When we go on road trips, we can purchase a roof rack instead of buying another car. Ideally, we will pay the Golf off over the next two years or so and then pay for the next car in cash, keeping the Golf as a beater until it dies.
The only way a trade in would make sense for our family right now is if we found something that would give us lower payments with more space. With cars and real estate, that perfect mix of cheap but spacious is hard to find. Will family road trips in our little Golf be difficult? Yes. Will I also probably bump my head every time I put the car seat in the back? Also yes. At the end of the day, we have to keep our eyes set on what will be best for our family financially.
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This Core Habit Will Lead You to Financial Freedom
The purpose of this blog is to take you through the exact process that my husband and I have used to pay off more than $65,000 of debt in 11 months on a single middle class income.
To get you started on your journey, we began the process with making a promise and getting your spouse on board. Since then, you have calculated your net worth, reviewed the checklist to a strong financial plan, and written your goals.
Now you must develop a specific core habit to ensure your success.
How to Recover from a Setback on Your Debt Free Journey
The concern that I hear the most from people who are trying to pay off debt is how to recover from a setback.
Maybe it’s happened to you.
You get all fired up about paying off debt, take the time to create your debt freedom plan, figure out which debt you’re going to pay off first, create a budget, and start to throw every available dollar toward your debt.
This works fine for a month or two, or maybe just a week or two, but then something comes up to throw your plan off course.
How Do You Create Reasonable Resolutions?
It’s that time of year again when people vow to be better than they were throughout the previous year. I, for one, am a fan of New Year’s resolutions for a number of reasons. The main reason I love the idea of resolving to do better is it gives everyone a fresh, positive outlook. As I’ve mentioned in the past, remaining positive has brought me a long way.
However, many people set goals and make resolutions that are simply not reasonable. For instance, if you have a lot of debt and little-to-no savings, it is unlikely that you will (or should) own a house by the end of the year. So, how do you go about creating reasonable resolutions?
My New Year’s Resolutions
As you can see above, most of my resolutions have nothing to do with our finances (and that’s okay). Cutting our debt in half this year would be a HUGE deal for us and it is totally obtainable.
The other resolutions I’ve listed here are small but extremely important for me to maintain balance. First, my goal of “hustling more” will help us achieve our debt payoff goals. The more money we bring in this year, the more debts we can pay off. Next, self-care and health goals are always on my list. If you don’t invest in yourself (time or money), you won’t have anything to offer anyone else. This includes writing and reading more (for fun). Lastly, my husband and I have been slowly but surely learning German. I’d like to be fluent by the end of the year.
Unfortunately, most people stop trying to obtain their goals by the end of February (if they last that long). That’s usually because they’ve established these huge goals that are overwhelming, instead of breaking it down into smaller, easier tasks.
How to Create Reasonable Resolutions
So, how do you go about creating reasonable resolutions and goals for yourself? Well, first you should read up about SMART goal setting. This method of writing down and setting goals for yourself helps you create smaller tasks and organized your path to success. Here’s a quick breakdown of the process…
- Specific: Have a specific goal in mind. Instead of saying, “I’d like to be thinner by the end of the year,” say, “I’d like to reach 165 pounds by the end of the year.”
- Measurable: Be sure all of your goals are measurable in some way. As I mentioned above, we want to pay off half of our debt. This is measurable and specific.
- Achievable: This goes back to choosing goals that make sense for you to reach within a year (or whatever period of time you’ve set). Consider what is keeping you from that goal now and plan for changes you may need to make. Then assess whether or not it is actually achievable, making those changes as needed.
- Relevant: You always need to be sure the smaller goals you’re looking to reach make sense in the long-run. If you have a five-year plan, for instance, you should be sure you have goals this year to help you get there.
- Time-based: Once you decide on your goals, be sure you outline a timeframe in which you’d like to have it done. For example, to reach my end-of-year weight goal, I’ll need to lose X amount of pounds per month. Then check-in and see if you’re on track every three months, month, week, whatever works for you.
You should also realize that, sometimes, life gets in the way of things. Don’t be too hard on yourself! If you run into problems when you’re attempting to reach your goals, take a step back and assess whether or not you have been specific enough in naming what you want to achieve.
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My Word of the Year: Intentional
It has become popular for people to choose words to describe their goals for the year. This year, my word is going to be “intentional.” I want to be more intentional about how I spend my time and what I focus on, shifting towards things that bring me joy and make me more available to my daughter.
Intentional: Defined
According to Merriam-Webster, intentional is defined as “done by intention or design.” Some common synonyms for the word include conscious, deliberate, purposeful, and willful. So, instead of doing things on a whim or without planning, I’ll take my time and be intentional with how I move forward.
What It Means to Me
It’s more than that though. Since giving birth to my daughter I have avoided things that feel like a waste of time. My time is valuable. I could be spending it with my daughter, watching her continue to grow. So, when I’m not doing that, I want to be using my time to the fullest. This means being more intentional about how I spend my time. For instance, I need to make certain things higher priority during her resting hours instead of scrolling endlessly on social media. That way, when she wakes up from her nap or simply wants to spend time with me, I’m there to do it.
I’m also going to be intentional in other ways. We are working to be more intentional with our money and how we spend it. There are things we are doing (like cleaning out closets and minimizing expenses) that are helping us be more intentional about how we spend. For example, we definitely didn’t need a dozen streaming subscription services. Trimming some of those down can help us save for more important things.
Another way we hope to be more intentional in 2022 is with our health. Towards the end of my pregnancy and since my daughter’s birth we’ve spent so much money on eating out. Instead of spending money on fast food or eating out daily, we are going to put money towards our health and wellness. For me, this will take the form of private yoga sessions once a week. My husband is going to look into martial arts classes. Rather than throwing it away on junk food, we will be more intentional with our money and put it towards improving our body and mind.
Final Thoughts
When it is all said and done, financial resolutions and your “word of the year” only work if you have a plan to put behind them. To be more intentional this year, I am journaling daily, I’ve deleted many social media apps off my phone, and I’ve added more books to my TBR list. We are surrounding ourselves with people and things who are positive, intentionally working to create a happy, healthy life for our family.
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