How to Start Crushing Credit – 6 Month Debt Update

A 6 month debt update on this financial repayment journey. How we survived the holidays without buying gifts, ringing in the new year on a budget, credit card payments and other unexpected expenses. Progress made, a few steps backward, and a new financial perspective for the future (including an apology.)

 

Debt Update – 6 Months into Repayment

Well hello there — Fancy meeting you here, on my Debt Update page.

What have I been up to? Well, as you might have noticed, my last Debt progress report was quite some time ago.

Yup. The ball was essentially dropped. Several of them, actually.

While I’ve been floundering around in non-blogging land, the rest of the world has been turning.

Time has passed me by while I’ve been Pinning, Tweeting, Facebooking (is that a verb?), and doing other less-than-strategic activities in order to avoid actual writing.

But then a sweet and wonderful person did something to shake me out of my blogging coma —

She asked me for an update.

It was as simple as that.

I’m documenting my financial journey so that others might learn from it —

  • How to pay off debt
  • What’s working, what isn’t
  • How to make extra money to pay off bills
  • And how to make everyday life a little more enjoyable

And – shocker of all shockers – someone actually wants to read it. (Isn’t that the point??) So why in the world I’m not openly providing this information is entirely beyond my realm of knowledge.

Talk about being one’s own worst enemy — silly, rabbit.

So there you have it. My poor yet humble excuse for being semi-absent. And my apologies for neglecting what I initially set out to do.

I have this platform, a story to tell and an obligation to be transparent with my audience.

And I want you to know I appreciate each and every one of you — so thank you for hanging in there while I’ve been trying to get my priorities in order!!

Okay, so now that my blogging confessional is out in the open — let’s move on to more juicy stuff —

 

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Debt Update

Believe it or not, it’s been 4 months since my last debt update.

We moved past Thanksgiving, made it through Christmas, and welcomed in the New Year.

We witnessed an epic Super Bowl, shrugged through yet another Valentine’s Day, and dribbled into March Madness.

And here we are – 4 nor’easters later – and barely any evidence of Spring having sprung.

But boy, did the bills get paid.

No, I’m not even close to being debt-free … but these past few months have definitely been eventful!

Let’s begin with how my family and I survived the holiday season …


The Holiday Season

When we last spoke, I indicated our plan for Christmas was to avoid using any form of credit to buy gifts.

I am happy to say that we were able to hold true to that promise. We did not use any form of plastic, nor did we use any lines of credit to buy Christmas gifts.

How did we do it? A couple of ways —

First off, we were fully transparent with family and friends.

 

Gift-giving

My husband and I did not participate in any office gift-giving parties, Secret Santa, or anything like that. We did, however, contribute to gifts for our actual bosses.

For our two sons, we are pretty lucky that they are somewhat older (23 & 25). With little kids, I don’t think you can get away with not buying them tangible gifts for the holidays.

I mean, what could you possibly say — “Santa must’ve lost the directions to our house”?

Or go with that whole “Guess you were just too naughty this year” claim? Nah, you’re right – that would never fly. Plus I’d feel too darn bad to do that to a little kid. They absolutely live for Christmas (or Hanukkah, whichever your preference.)

But I digress – and we certainly did not squelch on gifts for our own children. We just reduced the amount we would normally give, and kept it cash-only. (Which, to be honest, I think they actually prefer …)

In the past, we would give them some cash, several gifts, and then also buy them a fair amount of clothing.

Our boys are now full-fledged adults, so they certainly don’t need (or want) us to pick out clothes for them any longer. They’re pretty much ecstatic just to receive cold hard cash anyway.

And they understood that we were looking to cut spending, realizing we had an influx of unexpected expenses over the past year. So thankfully, they were fine with our frugal gift-giving decision.

We also gave a small amount of cash to each of our nieces, as we do every year. As they get older, we may decide as a family to no longer provide gifts for nieces/nephews.

But that’s a conversation that needs to happen between us and my sister-in-law. It needs to be fair on both sides.

For our other adult relatives (siblings, parents, in-laws), we explained the situation and everyone thankfully agreed that there would be no gift exchange. And they actually appreciated our suggestion, so they wouldn’t have to worry about what to get us.

 

See Related Post:  9 Better Alternatives to Buying Gifts

 

It seems like everyone is looking to cut spending here and there. So it was kind of a blessing to be honest and upfront with our relatives.

I mean, how many times do we rush out to the department stores right before Christmas, desperate to find last minute gifts?

Then we wind up either picking up a gift card (for way more $$ than we actually plan on spending), or some sort of over-priced gift basket concoction.

 

Holiday Traditions

Our second strategy to cut spending was related to a long-standing holiday tradition.

One of our holiday traditions is to create a photo Christmas card to send out to family and friends. It’s usually a photo collage of our dogs, but sometimes I’m actually able to wrangle up a quick picture with the boys. They aren’t normally in the same place at the same time, so some years it just doesn’t happen.

For this past year, I nixed the photo card, and was going to forego card-sending altogether.

I waffled back and forth on the cost of Christmas cards in general, as well as buying stamps. But ultimately decided to send out normal cards, with no photos.

I figured it’s just one time a year that we usually connect with some of these people, and I didn’t want to ignore that opportunity. Also, I was very pleased to pick up two sets of these simple yet classy Christmas cards, at an extremely reasonable price — and received so many compliments on them.


 

My Holiday Fail

One thing I attempted that didn’t work out was trying to convince my family to put up an artificial Christmas tree. Every year we buy a real tree that sits in our living room window and almost grazes the ceiling.

The refreshing smell of pine puts us all in the holiday spirit. But the constant cascade of pine needles on my hardwood floor makes me feel like The Grinch.

This past year I casually suggested we just set up the smaller artificial tree, since the kids are now grown.

You’d have thought I asked them to perform an impromptu tap dance to the Star Spangled Banner. This was not a suggestion that anyone was even willing to entertain.

So then I took a different route — I tried to make it a teaching moment.

I sent the kids on a mission to pick out a tree and stick to our $50 budget. I even suggested they select a slightly smaller one than usual, and that it didn’t need to be as high as the ceiling. (That certainly was never a requirement of mine — I’d be happy with a Charlie Brown tree.)

They came home with a slightly shorter tree — but it was practically double the width as what we normally get. I kid you not — this tree basically took up our entire picture window! 

And they spent $75.
On a tree.

Upon questioning, they said all of the cheaper trees were not as nice looking, and this was a much better tree. So there you go.

Apparently we taught them that you get what you pay for, and more money means better quality.

But not necessarily how to stick to a budget, and why it’s necessary to only spend what you can afford

girl pulling hair out
A 6 month debt update on this financial repayment journey. How we survived the holidays without buying gifts, ringing in the new year on a budget, credit card payments and other unexpected expenses. Progress made, a few steps backward, and a new financial perspective for the future (including an apology.)

 

Debt Payments made

Since we agreed not to use credit cards to buy Christmas gifts, you can probably guess that our debt repayment plan did not make any progress in December … or in January, for that matter.

The one bright side was that my other half had a few vacation days left over by the end of the year, which he was able to sell back to his employer for some extra cash. That entire amount was used to fund the majority of our Christmas spending. (I believe the reimbursement amount was just under $600.)

But as far as credit card bill payments, it appears we paid out $2,520 in December and $2,425 in January.

This was essentially for minimum payments.

Can you imagine how we might use this money, once this debt is finally paid off??

I mean, it’s crazy how much of it is just being thrown away — especially on high interest credit cards. If we were able to stash this amount of money away each month in a savings or retirement account, our future would start looking a whole lot brighter.

 

See Related Post:  How to Steer Clear of the Balance Transfer Shuffle

 

And just so you know, the tool below is what I’m using to track our outstanding debt. Undebt.it is an awesome website that tracks all of your accounts, monthly payments and due dates. On top of all that, you can also view various reports to streamline your payoff strategy, and play around with different calculators to find the best option for you.

A 6 month debt update on my financial repayment journey. How we survived the holidays without buying gifts, ringing in the new year on a budget and expecting the unexpected.

 

Those February Feelz

Now that we’ve addressed the holidays and the new year, let’s move right along into February –

The month of February typically brings a feeling of anticipation, knowing we will be filing our taxes and usually receive a pretty decent refund. Now, I know there are many people out there who would suggest we adjust our withholding so we don’t receive a refund (or at least not a large one.)

But from our perspective, it’s a way for us to save a substantial amount and make a plan for its use. Yes, we could potentially have a little more in our paychecks, but would we really be putting that smaller amount of money to better use?

Maybe some day down the road, once we have our financial ducks in a row, we can create a budget. One that we can actually stick to, so that extra amount would actually mean something.

But I feel like the tax refund is forcing us to acknowledge this chunk of savings in February, which we then apply to a certain goal (paying off bills, allotting for a larger purchase, putting away for vacation, etc.).

With that being said, in February, we paid $5,011 toward credit card bills. That’s double what we normally pay in minimum payments. And by doing so, we paid off 3 of our lower-balance credit cards (Kohl’s, PayPal, Comenity).

The rest we used to beef up our emergency savings account, which is nowhere near where it needs to be for a family of four.


 

Cupid Don’t Live Here

As far as February spending went, it was a pretty quiet month. We did hold our annual Super Bowl Party, which entailed  five of us eating porterhouse and lobster tails. The lobster tails were on sale — 4 for $20.

Years ago, we used to throw epic Super Bowl Parties with plenty of people, food and beverages. Now that hubby and I are in our early forties, there’s a lot less partying going on.

I’m fine with that though. I’m more of a homebody anyway. For me, a fun night consists of cozying up with a juicy book, or binge watching Netflix. *Introverts unite!*

In addition, Valentine’s Day is not recognized as a holiday in our household. (After 20 years, what can you expect … )

Although I did buy myself a box of candy — so that’s $5 taken from the annual romance budget, LOL. (kidding … there is no romance budget …)

That’s about as extravagant as we got in February.

 

March Madness

March was another whirlwind of a month, in terms of debt payoff. This was the month that we found out our annual bonuses through our employers. My husband and I strive to be high performers, but realize we can never fully depend on receiving an annual bonus. It depends heavily on how profitable the company was the previous year.

So even if we worked our butts off, it’s not a guarantee that we’ll get a bonus, or even a raise.

This year happened to be a profitable one. We both had really positive reviews, and the company did well overall.

Needless to say, we did a happy dance when our bonuses hit our bank account.

Here’s the breakdown for how we are using this money:

  • Vacation – paying off the balance on our summer beach rental. We only take one family vacation per year. We don’t go far, but this rest and relaxation is a must. 
  • Annual Expenses – my newly created budget includes large expenses like annual property taxes, oil/firewood deliveries and future vet bills. Setting this money aside ahead of time will save us a lot of grief going forward.
  • Savings – Another buffer added to our emergency savings fund, just in case.

 

In addition, we each decided to spend a portion of our bonuses on individual choices.

I chose to pay off one of our peer-to-peer loans through Lending Club. It had two years left before payoff, and the monthly payment was quite large. Freeing up that $450 payment and applying to another debt will provide the fuel to keep us going. Snowballing that amount into our remaining debt will allow us to pay the rest off quicker.

My husband decided to take a boys’ trip to Vegas. Let’s just leave that statement right there, and move along. 

At the very least … it was an entire week for me to dedicate to my blog.

Although our individual plans for the money varied, our overall strategy for paying off our debt is fairly consistent. And as long as there is compromise, I believe any relationship can persevere.

At the end of the day, for the month of March, we paid $14,637 toward our debt. (Woohoo!!)

I don’t expect we will be able to chunk out this amount ever again. It’s something that happens once a year, and I doubt we will receive the same bonuses next year.

So we were lucky to be able to take advantage of this while we had it.

 

Expect the Unexpected

In terms of unexpected expenses, there were a couple of big ticket items that popped up.

First off, a few months back I indicated we would need a new set of tires for vehicle #1. I think at the time, we had budgeted a cost of $800. Which seemed like a lot.

Well, I guess I had no idea.

Turns out, we were upgrading the size of the tires. And for that, we’d need new rims. Which also required an extra charge to install 4 of them, as well as the spare in the back.

All in all, the cost of 5 brand new tires (including the spare), the new rims and the installation = $2,500. Yikes.

That whole ordeal stung a little less since we actually had the money available, and were already planning to spend $800. But two and a half grand for tires? Dear Lord … who knew?

Unexpected expense #2 was a little more tolerable.

At the end of March, my trusty old Chromebook up and died on me. That left me without the means to blog for a few days. Fortunately, I was able to order a replacement and get it delivered with Amazon Prime shipping. And now I’m able to type like a madwoman again (but with a faster Intel processor and back-lit keyboard — Woot! Woot!)

 

Side Hustles  

There was basically no hustling going on in December or January, so the below reflects income mainly from February and March. Not much to really write home about, but still nothing to sneeze at!

A couple of points to note:

  • The affiliate amount was from my very first referral sale for someone else’s ebook, so it’s kind of sentimental. And it shows that if I can keep on writing honest & thoughtful reviews, then it’s possible to be successful earning an affiliate income.
  • The Focus Forward payment was from a single online focus group, which I participated in every day for a week. I spent roughly 2 hours per night answering questions and contributing to the online forum. And there was a final activity where I needed to visit a store and then provide a lengthy written review. So I definitely had to put work into it.

Ebates – $15
Share-A-Sale – $16
Affiliate Referral – $12.80
Survey Savvy – $10
Digital Reflections – $50
Quickthoughts – $40
Focus Forward – $225


 

Summary

So there you have it. What I’ve been up to for the past few months. Financially, anyway.

I know this was a super-long post, but I felt like if I stopped at any point, then I’d never be able to start back up again. So I just let it flow.

Maybe at some point I’ll split this up into a few smaller posts. But for now, I just had to let it gush out.

I *promise* I won’t stray from my updates for this long again.

Sometimes denial is more than just a river … And thank you for holding me accountable (You know who you are, girlfriend!)

And more to come on the accountability front as well — it’s so easy to make excuses when you’re working it solo …

But here’s to the next quarter, the next month, the next week — and keeping this momentum going!

 

Got thoughts? Please share!!

Let me know what you think —
Hit me up in the Comments — 

Robin

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