by Ashley
On December 30th of last year I sat down and took stock of my progress with debt repayment and made some 2015 financial goals. Some of the goals were more about general bookkeeping (like splitting up my “miscellaneous” category, which I did when I joined YNAB). But my one concrete numbers-based goal was simple.
In 2014 I paid more than $25,000 toward debt. I made the goal that in 2015 I’d pay $30,000 toward debt.
So how have we done?
Wellllllll, not so great. We were struck with a series of months with lower-than-our-average pay, even during the months when we usually make the most (like during summer). There was one month where hubs literally didn’t draw an income at all and almost all of my pay was sucked up into an overdue tax bill. So we had some pretty lackluster debt payments.
We’re 7 months into the year, and here’s where things stand with debt payment.
2015 Debt Payments
| January | $1678 |
| February | $1822 |
| March | $653 |
| April | $1796 |
| May | $1708 |
| June | $725 |
| July | $2125 |
| Total | $10,507 |
By this point in time, we should really have paid closer to $18,000 to be on target to hit our $30,000 goal. So we may be behind, but I’m not ready to admit defeat on this goal just yet.
With my new income stream starting to come in (my first paycheck was this past Friday! Wahoo!), and another goal being to pay off the car by the end of the year (now with just under a $14,000 balance), I think if we focus and are conservative with our spending that we’ll be able to reach BOTH goals (paying off the car by end of 2015 AND putting $30,000 toward debt this year).
There are definitely still some unknowns (e.g., will I get to keep my part-time job???), but right now I’m thinking positive thoughts and I’m going to keep chugging along with the hopes of hitting that big $30,000 mark. Can we have a moment of silence in appreciation of how HUGE that figure is? Granted, that’s not all money going straight toward principal (its money paid toward debt in general, which includes a good chunk of interest, so it’s not the same as a reduction of $30,000 in debt). But still! I’m in amazement, given that just a few years ago our entire ANNUAL INCOME was around $30,000! And now we’re hoping to spend that much just on debt! It feels good! I’m ready for this debt to be gone! It’s far past time!
I’m coming for you, debt! Say your goodbyes now!!!
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!
Now that you have gotten your first paycheck, if it includes all the deductions I would highly recommend looking into your projected tax liability for the year. The last thing you want is to put all your money into paying off your debt and then get hit with an unexpected tax bill in April. I find that companies tend to under-project the taxes withheld every paycheck for two income families. For instance, I have an additional $250 or so withheld every paycheck to account for my husband’s company not withholding enough. If I didn’t forecast the entire year, we easily could have gotten stuck with a “surprise” $6,000 bill in April. This is even more true since you have significant side income that they won’t assume you have.
Your income will be the simple part of the equation. Estimate DH’s income based off previous August-Jan numbers. In future years you may want to pay down your debt less in favor of contributing to a 401k to lower your tax liability. It really depends what bracket you fall into.
That’s a really good point, especially since we got hit with a big tax bill (over $3,000) this past April! I definitely want to avoid that type of situation in the future!
I think you are doing magnificently. This site has over the past few years swung our action about debt completely around. Both of us are retired academics, so had modest but adequate incomes before retiring and, off and on, owed quite a lot, on credit cards in particular.
Now from reading here we have changed our attitude– debt is debt! Only ones we carry from month to month = mortgage ( low, $922) and one car ( SUV bought new in January 2014 for $32,000) and now paid down to $5,850) we could sell our house for more than double what we still owe, which is a restful feeling–it was bought before prices soared and real astate agents
sniff around hopefully every six months or so.
We have a soft spot for you Ashley as our grad. degrees are from UT Austin and my husband is a Texan although we now live in Delaware–a great state for retirees, tax-wise. Keep at it, you are an inspiration and more believable than some of the people who have been on this blog.
Thanks for the kind words, Chantal! And kudos to you and your husband for doing so well to turn around your finances! Very cool that this blog has been part of your inspiration/motivation!
I love that you are still focused on your car loan goal (get that sucker gone!) and your big number goal! $30,000 is a reach, but with your positive attitude and hard work I have no doubt you will achieve it!