Blogging Away Debt Our Journeys to a Debt-Free Life

by Ashley

You may recall that in one of my first posts I shared my budget and asked for opinions on where to cut back. After examining patterns of our spending and listening to reader comments, I’ve made some revisions I wanted to share here:

(Note: I’m new to TablePress so if it cuts off some rows, click to change to showing 25 entries)

Let’s talk about some of the changes.

First, you’ll notice the total budget has actually gone UP by a couple hundred dollars. I guess we’re just going to have to make more money : ) This is accounted for by a $450 monthly increase in the amount I will be paying toward debt. I ran the numbers and, after accounting for the minimums due on other debt, if I’m going to make the 1-year goal for paying off my Credit Cards I must increase the overall amount I’m paying toward debt.

I tried to offset this increase by lowering the amount budgeted toward a couple of different categories:

• Natural gas (not gasoline) fell from $75 down to $40. Wish I could say I’d done something to somehow save, but I just edited this after looking at the past year and realizing that I was simply budgeting too much to that category. Our bill tends to hover around $30, but can be as high as $55ish. $40 was a good average number.
• Car insurance fell from $130 down to $90. It was even lower, but several comments made me nervous about our precariously low coverage. I increased our coverage back up a little (to $25,000/$50,00/$50,000). It’s still much lower than our original coverage, which is where the savings come into play, but up a bit from what I discussed in this post.
• I reduced our “Miscellaneous” budget from $350 down to $250.
• I reduced our “Savings” from $200 down to $190.

Lets talk about the latter two….

Per the recommendation of readers, I decided to break apart my “miscellaneous” category in the budget. Although in the table I posted there is only one line-item for “miscellaneous,” in my excel file at home I actually have it broken down into a separate table where the item totals fill in the “misc” category (does that make sense?) Here it is:

Miscellaneous (was $350/month; reduced to $250/month)

• Entertainment = $20/month

This includes things like going to a movie, renting a Netflix, going to a fair or carnival, zoo, children’s museum, etc. My goal is to further reduce this category, but I want to start here and see how it goes – I don’t want to set myself up for failure!

• Eating Out/Going Out = $75/month

I know this is probably an unpopular decision, as many will think we should not eat out AT ALL during this process (or at least much less than $75/month worth). However, this will probably amount to one family “night out” and one time where I eat out with my friends, so we’re talking about twice a month. This is a HUGE cut-back from previously (based on looking at my past eating-out expenses). I’d love to see this budgeted category fall even more, but this is where I feel comfortable starting.

• Personal Maintenance = $30/month

From looking at the past year, I noted these types of things that will fall into this category:  yoga, nails, eyebrow wax, hair cut/color. Note shampoo/conditioner/makeup will remain in the “grocery” budget, and I will try to further reduce these costs (e.g., coloring my own hair and painting my own nails instead of going to a salon).

• Other = $125/month

I know some said to split everything apart, but a lot of these items are irregular purchases that didn’t make sense to have their own column. Again, I selected example items from looking at the last year’s worth of purchases, but note that many of these I may try to DIY or do without this year, so hopefully I can further reduce this category in the future, too: Xmas cards/Xmas photos, parking, dog food, itunes purchases, dollar tree, Bookmans, pet sitter, stamps, gifts, doctor’s copays.

Savings (was $200/month, reduced to $190/month)

In redoing my budget I realized that I am going to need to redo my savings as well. YES, I am keeping a savings. BUT, instead of just randomly depositing this money into the bank, I made some sub-categories in my CapOne360 account so this money is for a specific purpose. I also reduced the overall amount of savings per month (albeit only by $10/month…every bit helps!).

• Semi-Annual Fees = $40/month

I think the main item here is car registration ($350 annual for me, $100 annual for Chris, so there’s still a little buffer, too).

• Car maintenance = $50/month

Oil change, taking care of any unexpected repairs, and savings toward a new vehicle (Chris’s truck is ancient and has 200,000 miles on it – as discussed here – so I think it’s wise to start a little savings for a just-in-case moment that is inevitably going to happen at some point).

• Dental & Vision = $50/month

We have no dental coverage, but I usually buy Groupons to go get a teeth cleaning once or twice a year (I actually average about every 9 months). Chris’ teeth are a total mess (and a story for another time), but suffice it to say, we will need this money. Also, I wear glasses/contacts and although my annual eye exam is covered on our insurance, we have no coverage for frames/lenses, so this money can be used for that as well. Regular health care expenses (copay for doctor’s visit) will fall under the “other” category from the “miscellaneous” column.

• Travel/Christmas = $25/month

Before you jump on me, realize that the total saved is SMALL…only $300/year. We do like to drive back home for Christmas so I’m not talking about “travel” in the sense of an extravagant vacation; I’m talking about extra gas money for a long drive. Also, Chris and I have actually talked about not going back for Christmas this year and staying in Tucson instead (it will be the first time in our lives not to go back for Christmas if this happens). I’ll keep you updated on this one.

• 3-6 Months Expenses = $25/month

I know this is probably controversial, as many will tell me to eliminate this category and throw the extra $300/year toward debt. This is my “peace of mind” extra money. It’s not going to significantly tip the scale either direction, but it makes me psychologically feel better to save a little every month. Indulge me – I know this is dumb, but it’s rooted deep within me (in my Intro post I even talked about how my family had always instilled in me the importance of saving while I was young!). Some may argue I need to get over my irrational psychological issues, but I would argue that money is HIGHLY psychological. By doing something for “me” (saving money…no crazy spending or anything), I am more likely to be able to stay the course on this journey.

How We Fared in March

I was originally going to give you a big update (broken down by budget category) on how I fared for the month of March, but decided to start those updates next month, given that I have just now revised the budget and we didn’t even start blogging until the second half of March. (You can, however, see my debt update post from this morning!) I will say that we did well for the month (both in terms of lowered spending and extra earnings) and ended up with a surplus of $2225!!!

With this money, my husband and I decided to make some one-time “snowflake” payments toward debt.

• $1,000 went immediately toward my Wells Fargo CC (with the 13.65% APR – note, this payment was not made until the beginning of April, so it is not included in this morning’s debt update)
• $1225 went toward outstanding medical debt (note – this payment was made at the end of March, so it WAS included in this morning’s debt update).
• And we decided to put an additional $1,000 toward Mattress Firm out of our savings (see Savings info in this post. note – this payment was also not reflected in this morning’s debt update).

I alluded to the medical debt snowflake payment in this morning’s post. I took the advice of several readers and called to ask for reduced rates in exchange for paying the bill in-full. In spite of my efforts, I was turned down by every single place (all 8 of the places I called). It was a huge bummer, particularly since it took half a day to make all the calls. I ended up using the $1225 to knock out a bunch of the smaller bills, leaving myself with 3 separate monthly payments (amounting to $150/month), and 1 monthly payment to the Mayo Clinic that is yet to be determined. Apparently, even though they are out-of-network, our insurance pays a flat rate of $100 toward our bill, which Mayo has not yet received. They will not discuss or set up a payment plan with me until that money has been handled so I’m not sure what we’ll owe them yet, but my guess is our medical debt will go up to probably about $200/month.

Charitable Donation Update

Also, as another random update to our discussion about charitable donations, we have decided to forego adding a line to our current budget for charity. In lieu of this, I am beyond thankful to Marie(!!!) for pointing out that in the state of Arizona, you can make charitable donations (up to a certain dollar amount) that give you a tax CREDIT (not deduction)….basically its like picking and choosing where your tax money goes (and if you are owed a refund, you actually get the money BACK at the end of the year). For any Arizona readers interested, HERE is a link to a list of qualifying organizations in the state (note – this may not be an exhaustive list. I’m not sure). This is how we will donate for the time being and if something happens to come up that we would like to donate more toward (generally these are the pay-it-forward/non”charitable” organization things I mentioned – like friends’ Go Fund Me sites), then it will have to come out of our “other” miscellaneous budget. If it doesn’t fit for the month, then we can’t donate. I feel good about this decision because it still allows us to give, but to do so in a way that won’t financially harm my own family.

Current Debt Monthly Payments

For those astute readers, you will notice we are paying nearly $1700 toward debt per month at this point. Yet, our budget only allots for $1550 per month. Clearly there will need to be other places where we cut back to allow for this ballooning debt payment (and hopefully Mattress Firm will fall off the list in another month or two). I’d also like to note that this budget is a work-in-progress. My hope is to continue reducing our expenses across the board in various categories, while simultaneously increasing our debt-payments. It’s a process (and I talked about some of the changes I’ve already made earlier today), so stick with me!

Anyone have Sprint as a wireless provider??? Want to do a Framily Plan?? (just kidding……but not really!) I think our phone bill (at $150/month) is SCREAMING to be slashed! The childcare expense has been another one weighing heavily on my mind. Perhaps it deserves its own post soon. Changes are on the horizon, folks!

Any big, glaring areas where you think I could cut back more??? What have you done to cut costs in your budget?

Ashley

Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!