Recent Mintly Progress!

I don’t think I’ve mentioned it much on the blog, but I have this goal in the back of my mind: I want to pay off $20,000 of our student loans this year. Not just send Navient that amount, but actually see the total of those two loans (which are H’s) plus the Citibank card balance (which is where we transferred part of the loans) decrease to somewhere in the neighborhood of $40,000. (The balance of those three loans was at $60k at the end of December, 2014.) That means paying MORE than $20k in a year. It’s not my written-down, committed-to goal, but it’s my pet goal that I’ve been nursing as I’ve been squirreling away money each month to send to Navient.

It’s not the end of the month, but I had a little bit of time yesterday to update the “About Our Debt” page. I use Mint.com and happened to be poking around and I discovered something pretty awesome:

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According to this, we had $68,998 of debt in June, 2014. On May 17th, we have $50,883 in debt.

If we can pay off $2k of debt by the end of June, then we will have successfully paid off $20,000 in 12 months! Of course, I’m really looking to decrease our debt amount to $40,000 by December 2015, but this would still be a milestone to celebrate and would give me the confidence that we can really get that amount paid off this calendar year.

In related news, I’ve been cautiously enthusiastic about our rising net worth – after we sold our house, our net worth decreased rather significantly (which I wasn’t expecting, as we made money on the sale!). However, we’ve more than made up for it and we’re now up to around $78,000!

This is important to me because it’s another way of demonstrating how our hard work of paying down debt is working in our favor: every $1000 we send to debt eradication is another $700 we raise our net worth. (Okay, that’s a crazy guesstimate, totally based on the fact that interest is a bastard.)

Despite all of that good news, I do have to make up our “Budget Check In” post for this month – and it is not pretty. Oof. More later this week.

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Money Conversations: Vol. 2

 

Welcome to Money Conversations: Volume 2!

As I wrote in my introduction to this series, I’m pretty obsessed with talking about money, and I don’t get to do it often in real life. You can read Volume 1 here.

Today, I’m going to share a conversation I had with my friend who went to the beach with me last month.

Here are the stats that I’ll share:

Name: Betsy (changed for privacy)

Family: Married to a guy (with a full-time job), has two kids (one in daycare, one in elementary school)

Career: Full-time job in teaching

Salary: Unknown, but I estimate around $45k; her husband makes more as a university professor (probably $50k – the university does not go out of its way to pay its faculty the outrageous salaries people might suppose)

Debt: From our discussion, it sounds like Betsy and her husband carry credit card debt (from being “stupid” and “immature” and “trying to keep up with the Joneses” when they were younger) as well as student loan debt. (I am not sure of the amount, but I’m going to guess, based on our conversations, that their consumer debt is somewhere in the vicinity of $10k?)

Location: Small Town (where I live!)

Background: I met Betsy when I moved to Small Town the first time, which is now about 8 years ago! We worked in the same school for a while (before I got a different job and we moved to Small City).

Betsy has told me previously that she would love nothing more than to be a stay-at-home mom, but that their finances will not permit it. She was able to stay at home for one year after her eldest son was born, because they had just sold their house when they moved to live in Small Town.

Here are some of the points that stuck out to me in our conversation:

  • Betsy doesn’t like to think about how much debt they have (similar to Allie, from my first Conversation).

She knows it will eventually go away, but she, like many of my friends, believes that it won’t help to obsess over the amount, as long as it continues to decrease. (This makes sense to me, it’s just not how I roll these days.)

  • Betsy regrets the amount of money they spent when she stayed home with her first son for a year.

She told me specifically that she loved staying home and that she wanted to do it again, but that she had been spending money on things they didn’t need. She wished they had been more frugal when they were younger, but especially during that year when they were living on only her husband’s income and the money from the house sale.

  • Betsy and her husband recently revisited their finances and are putting a bigger effort into paying down their debt than they have in the past. 

Betsy told me that, in the past, she and her husband had basically decided that their debt was just going to be there until they managed to pay it off, which they are slowly doing, month-by-month, paying the minimums. However, they have a new plan!

  •  Betsy and her husband were previously tithing $800 a month to their church.

This blows my mind! I don’t know how high their debt is, but if I had debt that I was worried about (well, who doesn’t?), I would not be tithing so much! I do know of many personal finance bloggers who hold steadfast to the idea of tithing 10%, so that doesn’t surprise me so much (I understand that 10% is a number given in the Bible?). (Six Figures Under and Crumb Savers come to mind.) Interestingly, Betsy and her husband tithe 10% of their pre-tax income, which I find even more astounding… and not in a bad way. I mean, these people are serious in their support of their church! I know they’re not bringing home $8k a month, so I know they’re basically giving away more than 10% of their take-home pay. Wow!

  • They are now tithing only $200 and devoting the rest of the money to paying down their debts. That’s $600 a month! (Even with a huge amount of debt looming over you, $600 is a good chunk of change.)

And they’re excited! What brought about this change, you might ask? Betsy described how her husband heard a man on a Christian Talk Radio show explain that the Bible indicates that it’s a sin to have debt (hmmm…). That caused her husband to really consider his and Betsy’s situation, and he reframed his thoughts about the balance between the sin of having debt and the sin of not tithing 10%. After talking with Betsy, they decided that they would feel good about making a change. I applaud them for this. I’m not religious, but I do remember some phrase about “Taking care of one’s own house,” or something similar. Betsy told him that they would absolutely need to keep tithing, though, so they settled on $200 a month.

I’m excited for my friends that they were able to come to a solution that drastically reduces their debt while also tithing. I’m sure they will increase their tithing back to 10% once their debt is gone. As I said above, I’m not religious, and we don’t tithe personally, but I understand why others do. (We do make charitable contributions to other organizations, however.) I really would like to know how many others who are working so hard on paying down their debt continue to tithe at 10%!


Do you tithe? If so, do you tithe based on your pre-tax income or post-tax income? I’m curious!


For previous posts in this series, see: 

May 2015 Budget Preview

If you’d like more details regarding our monthly budget, please see my first 2015 Budget Post.

Welcome to the (slightly belated) Mintly Budget Preview for May 2015!

Some info:

  • We use a zero-sum budget.
  • We get paid a little more than what I budget for – but I use that extra either to pay down unexpected expenses from the month before or I can snowflake it to Debt Eradication. Most month’s we’ve been able to stash it away in our Money Market account to build up before I send a lump payment to our Student Loans, and the same was true at the beginning of this month!

Note: This image is a screenshot from the Budget tab of my account on Mint.com.

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May Budget Breakdown:

Debt Eradication: This category includes the budgeted money we send to our student loans on top of the minimum payments. I classify all of these transactions as “Transfers,” though, and not counted as “expenses,” so they don’t actually count as “spending” in the Mint.com world.

Sinking Funds: This is where we save money each month for known upcoming expenses. I have a spreadsheet with different line items to keep track of how much money each category has in it. (This transaction is also classified as a transfer, not spending, in Mint.)

Food & Dining: This month, I optimistically reduced our budget by $100 in order to focus more on our spending in this category. The $500 is broken down (in my mind, at least) as $400 on groceries and $100 on restaurants. There are a few problems already: my parents came for a spontaneous overnight stay this week (on their way to see other family) and we treated them to dinner ($50 for four people ain’t bad, but that’s half of our eating-out budget for the month), and I’d already splurged earlier in the month on taking out a newly-retired family friend for brunch as a celebration (that was another $40)…. You can see the problem.  Another issue is that when we don’t do our grocery shopping properly, H doesn’t end up with any food to take for lunch and buys a sandwich (about $5 each time). That’s happened 3 times this month already, though it won’t be repeated! We’ve spent $143 on groceries so far this month and need to get more for the coming week, so the next three weeks will have to be around $85 each to stay under the $400 grocery budget limit! CAN IT BE DONE. (We’re already $12 over the $100 restaurant budget, nothing to be done about it now!)

Student Loan: This amount is our minimum payment for four separate student loans. (Debt Eradication funds are separate from these automatic payments.)

Bills & Utilities: Cell phone bill, Water, Electric, and Internet are included in this category.

Business Services: With only one business trip this month that was about 4 days long, I only budgeted $100 (which was, admittedly, optimistic!). It has now been determined that H will get a $25 per diem, which is great, and his gas will be covered, so all of that is under Business Services. Although it went over, I’m not too worried. It may mean it’s a bit tight at the end of the month, but I am hopeful that we will not use all of our Bills & Utilities allotment so can cover it ourselves! (Then the reimbursements are icing on the cake!)

Gas & Fuel: We’re keeping it this high since if we DON’T use the allotted amount, it’ll just get snowflaked to our Student Loan Debt Eradication fund anyway.

Kids Activities: L’s piano and ballet.

Slush Fund: I lowered this to $100 to account for the $100 that we set aside for paying for H’s business trip up front.

Babysitter & Daycare: L’s after-school care program.

Home Services: Mowing guy comes 2x a month (we only have an electric mower, and the cord doesn’t reach!). This also includes trash collection.

Entertainment: $9 for Netflix.

Fee: $1 for the credit union.

May Extra Funds: $210.96 – The money over $5000 from our paychecks went directly to our Student Loan Debt Eradication fund. (That will be reflected in our Snowflaking area of our May recap at the end of this month.)


Once summer hits “for real” next month, things are gonna be all crazy with this budget… L’s after-school program will only run for part of the month, then we have her enrolled in a week-long program while H is out of town on business (and I’m working), and we’ll see how the rest of our expenses shake out while H is not working for the summer months! I’m SO looking forward to June, when we will make our last Citibank payment and be able to send that $450 monthly payment to H’s interest-accumulating student loans instead!

Who else has already blown their budget for the month of May?