Debt Repayment Update - December 2017 Edition

 

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Happy 2018 everyone!

No matter how you feel about 2017, the start of a new year is the perfect time to start anew. It’s time to look forward, set your intentions for the new year, and work towards getting to where you want to be.

But, before I turn to 2018, it’s time to quickly look back at the end of 2017. And specifically how December turned out financially for us.

As I explained, we’re putting it all out there so that we can hold ourselves accountable. We’re sharing how much we earn, how much we spent, and how we’re doing on paying off our debt.

December was another good month. We were able to pay $901.48 towards our target student loan, surpassing our goal of paying at least $683.00.

And our total debt decreased by $1,131.67 from November (after accounting for interest).

Let’s take a look at the numbers.

 

 
Holding ourselves accountable by sharing our earnings, spending, and debt progress. Let's look at how we paid $1,137.67 in debt in one month.
 

Income

Attorney income (Me) - $2,831.32. This number is my take-home pay from my job in public service. I have $310.11 in benefits automatically deducted from my paycheck each month. Currently, my employer covers my health insurance fully. I pay $21.22 for dental insurance and I put $10.00 into an FSA account. I contribute $238.89 to a 401k and $40.00 to a Roth 401k.

Attorney Income (DJ) - $1,250.00. DJ has his own private law practice. This is his take-home pay (after business expenses) and fluctuates from month to month.

Coaching income - $135.83. DJ is an assistant high school football coach. He gets paid a bonus for each week of the playoffs that they play. Their team made it to the first round of playoffs (though they lost).

Teaching income - $1,126.51. DJ also teaches for two local colleges during the year. He got paid twice this month (one for his work in November and one for his work in December).

DJ didn’t really budget his own money before, so now he’s trying to do that. He’s also trying to get to the point where he’s got the money before he spends it. So, from his December pay, he needed $397.85 to put towards December expenses. The remaining $330.81 will go towards January expenses, so I’ll include it in January’s report.

TD Bank Cash Back - $103.01. DJ earned cash back from his credit card. He applied it directly towards paying his monthly bill.

Debt repayment & Snowflaking

Our total debt is currently $332,907.23, which is a decrease of $1,131.67 from last month. Here's the breakdown of our debt:

Student Loans - $1,314.46. We put $901.48 towards AES, our target loan. This surpassed our reach goal of $683.00. We were able to put $5.12 from my income and $825.00 from DJ’s income. We were also able to snowflake a total of $71.36, which came from:

  • $.20 in interest earned in November
  • $2.51 leftover from groceries in November
  • $5.91 left over from gasoline in November
  • $28.52 from cash back earned from our Capital One credit card
  • $34.22 from a reimbursement to DJ related to coaching

We paid the minimum ($412.98) on all our other loans. After accounting for interest, our current balance on all our student loans is $156,981.74 (an overall decrease of $670.56).

Greensky - $99.03. This brings the balance to $5,446.85. The 0% interest rate expires in July 2022, which is also when it will be paid in full.

Discover - $88.00. This brings the balance to $4,300.97.

We also put $15.10 into savings so that we can pay the card off in full when the 0% interest rate expires in May 2018. (This included $12.00 from our budget and $3.10 in interest.) Currently, we have $3,863.57 saved (or 879.8% of what is owed).

Mortgage - $1086.58. This also covers our taxes and insurance.

Our currently mortgage balance is $166,177.67 (a decrease of $274.08). We’ve only had our mortgage since March 2016, so the bulk of our payment each month still goes towards interest.

Monthly expenses

Here’s how we spent our money on monthly expenses this month (not including our debt):

Internet - $44.99 (Budgeted $44.99)

Hulu/Netflix - $17.08 (Budgeted $17.08)

Electric/Gas - $78.24 (Budgeted $100.00). Whatever we don’t use for the month is saved to cover higher usage months.

Water - $0.00 (Budgeted $60.00). We pay water every other month. So, we set $60 aside each month to cover it. Whatever we don’t use is saved to cover higher usage months.

Groceries - $241.78 (Budgeted $240.00). We overspent by $1.78. But we can cover it with money left over from another category.

Eating Out - $62.95 (Budgeted $100.00). With traveling, we budgeted a little extra money to pay for eating out at the airport. The $37.05 leftover will be snowflaked next month

Household/Other - $34.07 (Budgeted $40.00). Usually we snowflake anything leftover. But I'll probably keep the leftover $9.13 here in case we need it in January.

Cats - $85.67 (Budgeted $100.00). We use this to buy cat food, litter, and seizure medicine for one of our cats. Whatever we don’t use is saved to cover higher cost months.

Cell - $67.65 (Budgeted $67.65)

My Fuel - $29.86 (Budgeted $30.00). The $0.14 leftover will be snowflaked next month.

DJ Fuel - $77.52 (Budgeted $77.52)

Parking - $30.00 (Budgeted $30.00). I have to pay to park at work.

My Misc - $35.29 (Budgeted $30.00). I overspent based on what I budgeted for the month. But I had money left over from previous months, so the overspending was covered.

DJ Misc - $112.77 (Budgeted $112.77).

DJ’s Health Insurance - $411.62 (Budgeted $411.62). This is DJ’s health insurance through the Affordable Care Act. To be on my health insurance, we’d have to pay a lot more than this.

DJ Food & Beverage - $30.51 (Budgeted $38.74). This covers any food or beverages DJ spends while out with friends.

DJ New Business - $74.25 (Budgeted $74.25). DJ closed his law firm at the end of the year. He's starting a new legal business, so he had some start-up costs to pay.

DJ’s Credit Card - $674.95 (Budgeted $674.95). As I mentioned earlier, DJ didn’t really budget previously. This was what was needed to pay off his credit card for expenses charged between the end of October and early December (when he started tracking).

Sinking funds

Each month, we set money aside to cover our irregular expenses. These are things that don’t happen every month but will need to be paid for in the future. These are called "sinking funds".

Here’s how much we allocated towards each this month:

Blog - $112.50. I’m setting aside money to pay for blogging expenses until I start earning money.

Car Inspection/Registration - $5.50

Car Insurance - $33.43. I pay my car insurance every 6 months (in June and December) so, each month, I save one-sixth of what I anticipate the insurance being. In December, I paid $233.43 to cover the first half of 2018.

Car Taxes - $5.50

Clothing - $13.30. We visited DJ's family in Minnesota for Christmas, so I needed better winter shoes. So I spent $42.79.

Gifts for Family - $89.00. We spent $77.42 on gifts for Christmas in December. (By saving all year for Christmas, we were able to buy presents for everyone without incurring any debt.)

Life Insurance - $0.00. We already saved enough to pay the premium (due in January), so I didn't put anything towards this in December.

Travel - $70.00. We spent $195.61 between gas, parking at the airport, and boarding one of our cats.

Home Maintenance - $49.61. DJ bought some dirt for a plant we inherited.

Biannual Maintenance - $19.00. We have our furnace and heat pumped twice a year, in May and November.

Professional Fees - $37.50. I have to pay dues to stay a licensed attorney.

Quarterly Taxes - $0.00. This is money we set aside to pay for quarterly estimated taxes for DJ’s law practice. We have enough set aside already, so we didn't need to set aside any in December.

YNAB - $3.75. I use You Need a Budget to keep track of my budget and finances. It makes managing everything so easy.

Toodledo - $3.33. I use Toodledo to manage my to-do list and make sure I don’t forget to pay any of my bills.

Other - $70.85. This covers any car maintenance, medical costs, veterinary costs for our cats, and continuing education that I have to take as an attorney. DJ had to get a new tire, so we spent $70.85.

Savings goals

We are currently saving for a few specific things.

Tree removal - $153.27. We got our tree removed in December. We worried about it falling during the winter and landing on someone's house. We didn't want to risk it. The final cost was $1,500.00, which was more than we planned. But it's well worth it. We ended up pulling money from other categories to cover the additional cost so that we didn't take on any debt.

Replace windows - $0.00. The windows in our house are old (single pane, frost on inside of windows old). We already replaced four windows in 2016. We hope to replace 5 more as soon as we can. Based on what we spent on the other windows, we estimate we’ll need about $2,700. We temporarily put this on hold to pay for the tree.

Cruise - $0.00. We rarely go on vacation together, other than to see family. DJ’s never been on a cruise. It’s not a high priority, but we still want to save up to go on one in the future. We want to save about $1,600 for it. Again, we put this temporarily on hold to pay for the tree.

Emergency Fund - $0.00. We have an Emergency Fund of $1,013.20. We chose $1,000 based on Dave Ramsey’s Baby Step 1. The additional money is interest that has accrued. Eventually, we’ll increase our emergency fund, but not at this time.

Your Turn

How did your budget and/or debt repayment goes in December?