Debt Payoff and Spending Update

The Road to Debt Free
The Road to Debt Free

It’s been forever and a day since I’ve done a debt payoff and spending update, so I thought today would be the perfect time. If you read our 2014 summary and 2015 goals, you’d know that we switched to using the Debt Snowball at the beginning of the year. We started 2013 with a HUGE debt load, and wanted to begin by paying off the highest interest cards first, because mathematically it just makes sense.  However, when 2014 brought Polar Vortex hell heating bills, a laundry room remodel after our laundry room flooded (twice) and the “need” for a new TV (our former 15-year-old tube TV – the only TV in the house – died), we got extra discouraged with our debt payoff plan.

In order to stay on track, we decided that we needed to switch to the debt snowball for those emotional wins if we were going to stay on track with debt payoff.  So far, it’s working well.

We had two small credit cards that we incurred charges on in 2014, as a result of the above incidents. They only totaled $1,000 or so, but that 1k felt super overwhelming to us on top of our 3 big credit card balances.

We started the snowball in December of 2014, and the first credit card balance was paid off by mid-February. The second card is down about $100, and I expect to put still another $100 toward it this month. So, we are moving forward.   The goal is to have this second card paid off by August, but I’m convinced we’ll be able to knock it out sooner than that.

The rest of the debt is decreasing, slowing but surely, and I’m certain that if we stay with the snowball plan we’ll meet our goal to have all non-mortgage debt gone by within 3 years at the most, in February of 2018. Finally, a debt-be-gone date.  Woohoo!

Expenditure wise we’re doing well too. Our goal for groceries for 2015 was to keep it at $400 a month.

For January we spent: $425.69

For February we spent: $397.90

Not bad for a family of six. Gas and other expenses have been good too, but we’ve had some extra costs (propane fills, beef purchase) that have cost some cash.

Entertainment costs have been a little rough: our goal of $60 a month has been exceeded in both January and February, due mostly to some extended family crises that have caused us to be a little lax in our entertainment budgeting. March is looking better though.

I just have to reiterate here that if you are struggling with a high debt load, please don’t give up. Those first months and years might seem slow, and you might feel as if you’re going nowhere fast, but eventually your snowball will pick up steam and you’ll dump those debts, one by one. Stay the course, my friend. You can do this.

53 comments

  1. “… for those emotional wins…” I think many discount the power of this with the debt snowball method. To me it makes that payoff method worth it, even if it might cost you a few pennies in the long run. You need that psychological boost that comes with paying off those debts, especially for a debt-payoff journey that’s going to be a long one. Keep fighting Laurie! 🙂

  2. My friend, I think you all are doing wonderful. It’s interesting how the snowball method works. When I first read about it I was like this doesn’t make sense but we tried it and it worked for us. I am so with you that you will be able to be to pay your debt sooner. I think you got this!

    • Laurie says:

      Thank you so much, my dear friend. Your support means the world. So excited to be soon joining the debt free ranks with you guys. 🙂

  3. Thanks for the inspiration Laurie. We definitely had some setbacks on our debt payoff in 2014 as well, but so far 2015 is more or less off to a good start in that department. We are also looking at probably three years until all the non-mortgage debt is gone. We will get there!

  4. Continued success Laurie and family! Hopefully with the warmer weather will ease up on the heating and entertainment budgets a bit. We have nothing to do, well then go outside and find something to do!

  5. We had a financial setback at the end of 2014 and it is easy to want to throw in the towel and feel overwhelmed, but you just have to keep chipping away at things the best you can and continue to move forward. I am proud of you guys for adjusting your focus and finding a different plan that works for you!

    • Laurie says:

      Thank you so much, Shannon. Yeah, those setbacks, suck, but it’s great when you can use them as a catalyst to motivate yourself to keep even more tail. 🙂

  6. I love that you reassessed and decided a different course action that felt like it would keep you more motivated. It appears to be working and that is what matters, Laurie! There will also be setbacks, slow times and it’s hard in the moment, but remember – it is just a moment too. 🙂

  7. I’m all for the debt snowball too. Logically, it makes sense to take down highest interest rate loans first. But how much logic was involved in getting into debt? There is so much psychology and emotion going on with financial management. So it’s just not logical to apply cold logic to debt reduction. I hope that your extended family crisis is in hand. Take care.

    • Laurie says:

      Thanks so much, my friend. I agree with you. I’m so in awe of the people that can buck the emotion and work in favor of the math, but I know for us we just needed to take a different route.

  8. It’s so hard to look at the big picture and realize it will take years to get out of debt. One step in front of the other and small victories give us motivation to stick with it. Recently we used our tax refund to pay off one card but considered paying down a different card thinking it would be better for our credit score. In the end it just felt better to have one paid off!

  9. Jason B says:

    Those emotional wins keep you motivated. I am currently doing the debt snowball method right now. It’s a great feeling to see it actually work.

  10. Yay for progress! Hopefully the warm weather will bring about lots of positive energy around your household along with free activities that will everyone entertained for cheap! It’s great that you are working on seeing the big picture because that’s where I usually get super discouraged and sometimes need someone to remind me that everything will work out for the best.

    • Laurie says:

      I hear you, Amanda. It’s easy to get discouraged when there’s so much more of the journey to walk, but we need to remember that every step is a step toward victory. 🙂

  11. Don’t get discouraged. You will get there.

    We had a rough couple of weeks with an $800 car repair and then a $700 emergency vet bill (didn’t expect that when we walked in the door). You just have to forgive yourself and get back on the path.

    • Laurie says:

      OUCH, Adam! Sorry to hear about the big expenses. You’re right though – just gotta move on and keep heading toward that finish line.

  12. jim says:

    Laurie,
    Good for you and yours! You’re getting there. It’s weird, but we started our debt pay off in Jan, 2013 – when, ironically, I stumbled across your blog – love it, by the way.

    We got slammed from every imaginable side the first 6 months of 2013 and it got hard and scary. We gritted our teeth and mustered thru the next 18 months (with a few bumps along the way). Now – it’s not even hard. We’ve grown comfortable with not blowing our budget and we are well on our way to reaching our 2015 goal.

    Love your blog. Keep it up!

    • Laurie says:

      Hey there, friend! Good to see you here again! So glad you are so close to that goal! Make sure and write us when you reach victory. 🙂

  13. Thanks for the update, Laurie! I’m very impressed with your grocery spending. There’s only two of us (plus the cats) and even with couponing and planning ahead we sometimes end up spending more than we’d like.

    I think you’re right about debt paydown going by quicker than you think. My wife and I have a lot of student loans but it’s hard to believe that I’m halfway done with mine (not on a principle basis, but I’m paying them back over 10 years and I just passed the 5 year mark with my wife not too far behind). Before you know it the loans will be gone and we’ll have a brand new cash flow hitting our bank account each month (or I should say not LEAVING our bank account). I’m looking forward to it!

    • Laurie says:

      That’s great about your student loans, DC! I hear you about looking forward to that new cash flow in the bank account – won’t that be grand! 🙂

  14. Thanks for the encouragement Laurie. I am now struggling with paying my credit card bills, that is why I have minimal savings. I just wish that it’s over so that I can fully maximize how much I save. That’s actually my motivation. LOL

  15. Just stay the course like you said! It does seem hard in the beginning and it doesn’t seem like you’re making headway early on…but it really does snowball as you gain momentum. And the payoff of debt freedom is absolutely worth it so keep it up!

  16. Athena says:

    I agree that sometimes you really need those emotional wins that the debt snowball can give you, even if it doesn’t make the most sense interest wise. Money is such an emotional tool and it’s best to make it a positive experience and not a draining one.

    • Laurie says:

      Yeah, it’s funny how we tend to get so emotional about money, isn’t it? Thanks for the comment, Athena – we appreciate it! 🙂

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