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May 5, 2016 · 2 Comments

Why I Share Our Journey to Debt Freedom

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Debt Free· Debt Free Tips· Our Journey

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For the last few months I’ve shared the breakdown of our monthly budget, as well as what we pay each month towards our debt.  I don’t share these because I want to boast.  Goodness knows that’s not the answer.  I share these because it is a way for me to keep track of our finances, both savings and spending, as well as seeing what accomplishments we made over the course of the year.  I share these so that you’re able to see a real-life example of how one family is working with what they’ve got to reach a goal.  But at the heart of my blogging is a simple way for me to track the ways I’ve saved and show how we’re getting out of debt.

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Our debt.  I haven’t talked much about it.  I shared a little bit of how we got here and where we’d like to be in the future, but other than that, I just don’t talk about it.  We didn’t go into debt through extravagant vacations.  We didn’t feel the need to the newest iPhone, high definition TV, or car so we could keep up with the neighbors.  We didn’t even go into debt trying to keep up on our bills.  Our bills were always paid on time and we always had money to eat.  That’s not how we got into debt.

No.  Most of our debt was because Hubs and I got an education.  A large portion of our debt is our student loans.  And if you combine the balances on Hubs and my student loans, it’s more than our mortgage.  {I’m still debating whether I will post what our total balance is.}

So here’s what I refer to as Our Big Three:

Student Loans

Undergraduate and graduate degrees for both Hubs and I.  We did each have graduate assistantships, which waivered our tuition for 2 years.  If we didn’t, our student loan balance would be a lot higher than what it currently is.  However, a good chunk of my current balance came from interest capitalization on my loans while I spent 4.5 years in graduate school and 2 years of repayment in economic forbearance.  For a few years I couldn’t look at my balance.  I would get nauseous, be unable to sleep and start having panic attacks just thinking about how much money it was.

A lot of my anxiety stemmed from the fact that I was in the middle of my graduate degree when the economy tanked in 2008, and I was worried that I wouldn’t find a job.  At the time, I was told not to worry; I’d find a job.  I was told that a teacher entering the work force with an advanced degree and children was desirable among school districts because the district wouldn’t be paying for my maternity leave or an advanced degree.

But when 2012 came and I had graduated, a booming economy and growing work force simply wasn’t the case in our area.  Teaching positions were being cut, and new openings were being filled by currently tenured teachers in order to keep budgets down.  Four years later, this cycle is still the case.  State budgets cannot be agreed on, school budgets are slashed, property taxes are rising, and many positions are still being cut.  This cycle is not just limited to teaching positions either.

Mortgage

We bought our house in 2014, and it has actually saved us money.  Sounds backwards, doesn’t it?  We live in the heart of the Marcellus operations in Pennsylvania.  At its height, we were paying $805 per month in rent for a 3 bedroom, 1 bathroom half double house with an unreliable heating source.  The place had 6 rooms total.  To say it was cramped for 4 people is an understatement; fitting 5 people there was just insane.

But it was the only available place when we moved to the area after graduate school.  We were looking for places to rent months in advance, and were just fortunate enough that the gas workers were evicted not long before my husband called the landlord inquiring about a separate rental.

If you’ve followed my monthly budgets, you know that we’re currently spending $500 per month on our mortgage.  We bought a 4 bedroom, 1 bathroom house ranch house.  It has 12 rooms, a garage, and over 1.5 acres.  There’s plenty of room for our family, and plenty of money left over after payments {and even saving for taxes} to help us reach our financial goals.

Credit Cards

When we started getting serious about our finances, we had 6 credit cards, 4 with balances on them.  Currently, we still have the 6 cards, but just one has a balance remaining: my credit card.

The balance was run up via gas purchases and car maintenance while I was commuting long distances to finish up my graduate degree.  I was commuting 160 miles round trip, five days a week to one university, and 240 miles round trip to my second university occasionally.  I also was driving 260 miles round trip each time one of the boys was sick since doctors local to us were no longer accepting new patients on the insurance we had at the time.

What’s left after those three…

Car Loan

In 2008, we had two clunkers that we had put so much money into.  Between head gaskets, two alternator changes, and a new engine in 2009, by the time the heater core went in 2010, we were done.  We were tired of putting repairs on one credit card, and tired of worrying whether the car would leave us stranded somewhere again, let alone start when we needed to go somewhere.  Rather than put the money back into the cars, we took out a loan for a new car.  In 2011, we found out we were having Lady Bug.  We sold that car {for the remainder balance on the loan} and took out another car loan.  This is still the car we have today.

UPDATE:  As of June 2016, our car loan is paid off!

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But I know that I’m not the the only one out there in this situation.

We’re digging our way out as best as we can, while still paying all the bills on time.  Since I became a stay-at-home-mom at the end of 2013, it’s taken a lot of learning, a lot of cut-backs, and a lot of creativity.  But we’ve come a long way from where we were.  And I’m still learning along the way.

That’s why I’m blogging about our debt repayment and monthly budgets.  Yes, it is a way for me to keep track of what we’re doing to get out from under out debt.  It’s also to show how far we’ve come.  If I had started this blog back in 2010 while I was still in grad school and commuting insane distances, our spending would be a lot different than what you see now.

On the flip side, this blog is also about helping you.  So what if you’re not in as far as we are, or you make more or less.  I don’t care if it’s $500 or $500,000 in debt.  Being in debt sucks.  And I want you to see that if we can pull ourselves out of a mountain of debt, whether it’s 5¢ or $5 at a time, it’s pulling ourselves out.

And you can too!

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  1. Emily says

    August 14, 2016 at 8:51 pm

    I’m in the same boat. Though my debt is not because of student loans. I’m actually just going back to school now. Only working on my associate’s degree but I didn’t really enjoy school for a long time. Got out into the workforce for the past 10 years and finally decided it was time to finish one degree. If it couldn’t be a bachelor’s yet, at least let me get an associate’s! My debt comes from a few big purchases that didn’t really need to be made. My current debt stands at around $3000. We also work on paying off my mother-in-law’s mortgage which is thankfully only at around $16,000 to finish it off. And finally, we’re in savings mode. We’re working on a $400,000 savings to be able to pay for a house. I’ve worked up about 1/8 of that total, but am still working toward it. At this rate, it almost feels like I’ll never get there. But hard work, determination, it all pays off!

    Reply
    • Kate says

      August 15, 2016 at 4:57 am

      You’ll get there! You are absolutely right, hard work and determination will pay off. It’s a mindset change, which is the toughest part. There’s nothing wrong with waiting to get your degree; sometimes I wish that’s what I had done rather than just trudging on for our Master’s with young kids at the time because “university was what we knew”. That was seriously our reason! Our combined debt, including our mortgage, stands around $273,000. It’s still a daunting number, but it’s one that makes me no less determined. We’ll both reach our goals!

      Reply

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makingcentsmatter

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Payday is today! Actually, payday was Friday the 1 Payday is today! Actually, payday was Friday the 12th because we completely forgot today is a bank holiday in the US. The feeling of being paid and not needing it is a nice one.⁠
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Here's what our paycheck needs to get us through for bills until March 14th. For a full look at our budget over the next month, head over to my budget with me on YouTube: https://youtu.be/rb8uyi1-rNc⁠
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#monthlyincome #monthlybudget #monthlybudget #zerobasedbudget #payday #budgetwithme #budgeting #budgettips #budgetcalendar #frugalliving #savingmoney #paycheck #makingcentsmatter #debtfreejourney #debtfreeprogress
This weekend was focused on a pantry shop and meal This weekend was focused on a pantry shop and meal plan creation! This meal plan to get us to our February payday. We also picked fast meals, because it's a busy two weeks between doctor's appointments,. Academic Decathalon, dance, and drama. I'm unsure we'll be able to shop on payday, hence the extras.⁠
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Total spent: $112.39 for items to get us through this and lunches.⁠
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Keep in mind, just over $112 for 12 meals isn't sustainable for our family, just in times when we need to stretch the last bits of our monthly income. I really wish $112 was enough to feed two teenaged boys in our household.⁠
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The point being... do what works for you, and your situation based on your location. Don't try to fit yourself into someone else's situation!⁠
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#mealplan #mealplanning #frugalliving #frugalmom #makingcentsmatter #savingmoney #monthlyincome #budgeting #budgetmom #groceryshop
January's real numbers:⁠ .⁠ House: $511.13⁠ January's real numbers:⁠
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House: $511.13⁠
Citi: $720⁠
D NelNet: $100⁠
K NelNet: $100⁠
K Chase: $150⁠
Explorer: $343⁠
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Extra Payment to Citi: $500⁠
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Noteworthy... our car payment had a late fee assessed because the mail was SLOWED down over Christmas. Three headaches later, and we potentially have online banking finally set up with them. It is still a headache. And we are never taking another car loan out with this bank!⁠
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How was January?⁠
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#makingcentsmatter #debt #debtfreejouney #debtfreeprogress #debtfreecommunity #realbudget #savingmoney #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom
Sometimes in order to see progress, you need to ta Sometimes in order to see progress, you need to take a step back.
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I'll be honest, I didn't think that we got this far in 2020. With everything going on - and more importantly, everything NOT going on - we didn't keep up with this every month. We just threw what we could at our goal. I'm simply amazed at how far we came.
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Things are still hectic, and I'm simply mentally exhausted between remote learning, extended remote learning, offset quarantining children... it goes on and on.
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But I also cannot wait to see what strides we will make in 2021.
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#makingcentsmatter #debtfreejouney #debtfreeprogress #savingmoney #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance
This is what school looks like when it's a hybrid This is what school looks like when it's a hybrid model, and your house does not have unlimited space. I was standing in our kitchen when I took this picture, the kids behind me making lunch.
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Our district is carefully monitoring our local infection rates, and we are currently in a hybrid form. That means they divided the district into two groups; half are in school on Monday and Tuesday, the other half on Thursday and Friday. They are offering an all remote option, but Verizon for some reason supplies our house with speeds so slow that it would shock a tortoise. Remote was a no-go.
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Each kid gets their own color bin for their school work. This includes school-issued Chromebooks and other standard items they need to get work done - headphones, pencils, and so on. When we are done for the day, we clean up everything, place them neatly in these bins, and place them in cubbies (on my current left) at night while the Chromebooks charge.
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I do NOT bother to clean up at lunchtime. It would take us more time to clean up and reset everything than it takes us to eat lunch. So we only pack it all up for the day and call it done.
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During the day, I sit between my younger two and field any questions they may have, troubleshoot technical issues we all have, and be the overall bouncer when things get off-topic. My high schooler will occasionally emerge from his bedroom, which opens to the kitchen. So he is close by when he has questions.
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Please remember that with all things in life, you need to work with what's available to you. And there is no shame in that. Don't ever feel like you're not doing good enough because it's not picture perfect. Work with what you have available to you, and you'll do amazing things.
School is in session, the garden is slowing, and I School is in session, the garden is slowing, and I’ve finally realized I haven’t shared our payoff numbers for July or August. Yeah……
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Please keep in mind, we are paid monthly on the 15th, but we don’t go by a “monthly” budget. So I have to go back and look at these numbers based off their due dates in the calendar. Because our pay falls in the middle of the month, I can’t tell you what portion of our income went to debt. It’s going to vary paycheck to paycheck anyways because our priorities vary with each check. Nothing is ever the same month to month, and pay to pay.
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That said, inJuly we paid off $2,694.43.
In August we paid off $1,673.40.
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EF Reimbursement: $146 / $1,200
Checking Buffer Reimbursement: $227 / $500
Vet Sinking Fund: $40 / $200
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It’s progress, and that’s what matters!
While I wait for the canner to finish the last rou While I wait for the canner to finish the last round... I rearranged our recipe binder. It's only taken me 8 or so years. 🤣😶😭
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Super busy here... but I wanted to share that wins Super busy here... but I wanted to share that wins can come in super small packages. I thought I'd spend $380 to clean the band instruments in this house. I ended up spending $234. So the remaining $146 can go to reimbursing what I pulled from our EF.
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No matter the win, celebrate it!
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What are some wins you have had lately?
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