My Debt Pay-Off Journey | Fourth Quarter Report

Before we dig into the financial failure that was 2017, let me be honest with you. The last half of this year was difficult for me. I fell into a pattern of buying things I had gone without for a long time.

All those times of telling myself no to save money had its long-term effects on my personal belongings and emotions. When I finally felt in control of my money (after separating my finances from my ex-husband), the desire to buy nice things for myself rekindled. My divorce made me feel free and alive again, and I wanted to capitalize on that desire.

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It started with new clothes. I didn’t go crazy, but it would be an understatement to say that my wardrobe was depressing. I hadn’t bought jeans in 5 to 10 years. New tops were few and far between, and thanks to all my purging, I had rid myself of a lot of cheap, ugly garments. Every piece I have purchased over the last six months has been intentional and high-quality. The long wool coat I always wanted? Purchased. New sweaters and wraps? Done. Fresh underwear and pjs? Yep.

But I didn’t stop there. I bought new bedding to transform my once “married” space. My laptop of three years was beginning to fail, so I splurged on a Samsung Chromebook (I can’t sing its praises enough and it was still cheaper than the laptop).

I have stayed on top of my spending, sitting at a plateau of paying off everything I purchased, but never decreasing the overall amount. For the past two years, I have eliminated my debt, slowly but surely. At the end of 2017, I can say that my debt is finally under the $60,000 mark.

Even though I have spent a lot of money this year, I am forgiving myself. I understand what this year has done to me and meant for my life. All I can do is move forward.

I am tired of spending money. I am done with school, and I have everything I could need or want now, so there should be no more big expenditures for a while. I feel no more desire to spend impulsively or selfishly. I have big plans for 2018. Failure is not an option.

A Look at the Numbers

In my 2017 third quarter debt report, I owed $61,636. As mentioned above, I spent a lot of money on myself and family (Christmas gifts), making it nearly impossible to decrease my debt. As of today, I owe $59,787.

Highlights

  • My credit card usage went up. I take responsibility for this. It won’t happen again.
  • I paid my car loan down nearly $2,000.
  • Student loans are officially under $30,000.

4th Quarter Debt Report 2017 | Rose Colored Water

100 Day Spending Fast

Progress will be made. Beginning on January 1st, I am starting a 100 day spending fast. It won’t be perfect because there are a lot of things happening in the first three-four months of the new year. By April 10th, I plan on paying off $5000 in debt. That’s an aggressive goal considering the reduction in my income (from losing a dependent). However, my tax return combined with the spending fast should allow me to reach that goal.

Because a lot of things are happening in the first part of the year, it won’t be a super-strict spending fast like the one I completed in September. I will stop eating out and buying clothes. There will be no splurges. However, there will be some gifts I need to buy and some vet expenses for Motley. I will be budgeting for these things, but they will have an impact on my fast.

Overall, I feel good about 2017, but I’m even more excited for 2018. There is a lot of potential for the new year and I can’t wait to see how much debt I can pay off. How were your finances in 2017? Did you reach your financial goals?

My Debt Pay-Off Journey | Third Quarter Report

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When I wrote my last quarterly debt report, you had no idea I had decided to separate from my husband. There were no clues that my finances were being rocked and ransacked for various expenses. Since it is no longer a secret that I am getting divorced, I can be open about how my finances have changed and where my priorities are now.

Becoming debt-free is still a priority. Since I am managing my finances alone, I have more power over where my money goes, and I believe my debt pay-off journey will be easier and faster. Losing my ex’s income was difficult, but now I can prioritize my needs and wants – making hard decisions and living drastically different without worrying if another person is on board.

On another positive note, I have a roommate splitting the bills with me. This has been life-saving and allowed me to continue making extra payments on my debt. Still, my debt payments are smaller than they were before. Not accounting for possible raises and promotions, if I stay vigilant, I should see financial freedom in 2.5 years. 

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First, a look at the old and new numbers!

At the end of June, my total debt was $65,202. I mentioned that I wasn’t happy with that number, but as I said above, my life was in a rough place, and Mike and I were just beginning to separate our finances.

As of today, my total debt is $61,636. I have made progress, though it hasn’t been much. By the end of the year, I will be less than $60k in debt. I am so excited for that day.

3rd Quarter Debt Report | Rose Colored Water #money #debt #finances

1. I paid off the Discover card.

As I mentioned in my Spending Fast review, I was able to pay off the full amount of my Discover card. It is officially done for and I will never charge on it again. I may take advantage of a balance transfer offer if a good one comes along, but for now, this account is non-existent. I am so happy!

2. I went on a Spending Fast.

A few weeks ago, I wrote a post about September being a no-spend month for me. This was partially successful. The first two weeks, when I was dog/house-sitting for a friend, I spent $0 on non-essential items. The last half of the month had me spending like crazy, with and without my credit cards. I need to cut up my credit cards – especially the Quicksilver. I’ll post the full review of my spending fast next week, but ultimately – I spent money on items that I could have purchased later.

3. I restarted my TSP contributions.

Since deciding to get a divorce, I have re-evaluated my priorities. I never wanted to stop my retirement contributions, but I did so there would be more money in my paycheck to pay off debt. However, my debt interest rates are all at 5% or lower, and saving for retirement has always been a top priority for me. That being said, I changed my TSP contribution to 15% for the Traditional TSP. I plan on increasing that again by putting 5% in my Roth TSP in the new year when I get a raise. Putting 20% in my retirement every month is worth the smaller paycheck and slower debt pay-off journey.

4. I’m changing my debt plan to the CFI plan.

You know I change my debt plan all the time. I have switched from snowball to avalanche back to snowball. Now, I’m changing it up again. I recently read a post by Abandoned Cubicle that talked about cash flow index, or CFI. I had never thought about this before, but the gist is this: Each loan has a CFI, or cash flow index. To find this number, you take the amount of your loan and divide it by your minimum monthly payment on that amount. Do this for each loan. Whichever loan has the lowest number is the one you would start to pay off first.

For me, it is my auto loan. This loan sits at 4.95% and has a monthly payment of $340 over the course of 72 months. Crazy, right? I already know my choice to finance the vehicle over 6 years was a bad idea, but I’m fixing that now. Ultimately, this means that most of my cash flow for debt is going to the car. If I could pay it off first, it would open up way more cash for my next debt than if I paid off my piddly student loan from AES at $25/month and a 3.5% interest rate. Make sense?

So, not only am I underwater on my car, but it’s taking a lot of my monthly cash flow. This is my new debt priority and my goal is to pay it off by August 2018. That would be 3.5 years early.

5. My emergency fund is low.

I dug into my emergency fund to pay off the Discover, so now it’s at $500. I haven’t prioritized bolstering it again because I have a large chunk of extra income to play with every month. Typically, I put it towards debt. However, if a small emergency did happen, I would have plenty to cover it in my regular income. I still have an automatic savings plan with Capital One 360 (get your own free checking and savings account here!) that puts in $100 on the 1st and the 15th. So, it will grow, but not quickly. This is my trade-off to continue contributing to my retirement funds.

So that’s what the next three months look like for me. 1) Save for retirement. 2) Save $200/month for emergencies. 3) Make big extra payments on the car loan. Rinse. Repeat. The holidays are coming, so that’s going to put a dent in my financial plan, but I’m still going to throw extra money at the car. What do you think? Are you working hard on your financial goals?

Our Debt Pay-Off Journey | Second Quarter Review

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We just finished the second quarter of 2017, and I am happy to say that we’ve made some good progress on our debt goals. We definitely made some mistakes, but compared to our first quarter debt pay-off, we have decreased our total debt by about $4000.

Unfortunately, I do think we could have made that total about $6000, but as I said, we made some mistakes and spent some money we probably shouldn’t have.

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Here are some of the things that happened from April through June.

As of today, we have $65,202 in debt.

This number should have been closer to $63,000, but I am happy with any progress, and this definitely shows progress. I plan to pay an additional $2000 towards the Discover card this month, so that will drop us down into that $63k range.

A Look at the Numbers

Second Quarter Debt Report 2017 | Rose Colored Water #debtpayoff #money #personalfinance

1.  Goodbye Sallie Mae.

Sallie Mae is done and gone. Back in May, I was able to KO Sallie Mae, thanks to us taking on a roommate for two months. I am never looking back at that lender ever again. You may be wondering why I paid off that last Sallie Mae loan when my original goal was to start paying off the cars. I decided to pay off the Sallie Mae loan because its interest rate was higher than some of the other debts, and I read a book that fired me up on the debt snowball plan again. It was our smallest loan and it took just one good month to pay it off.

2. The Total Money Makeover by Dave Ramsey

Believe it or not, I had never read this book until April 2017. It blew my mind when I listened to it on audiobook. Dave read the book and his charisma seeped out of every chapter. After listening to him talk about the snowball method, it renewed my motivation to pay off some of our smaller debts. I decided it was time to rid myself of Sallie Mae once and for all, and I did. This has freed up $75/month to apply to our other debts.

However, even though I am a proponent of the debt snowball method, I am not following it systematically. Rather than paying off the AES loan, I am moving up to the Discover card, as it is currently at 0% interest, but will be switching to 6% interest rate at the end of July. My goal is to pay it off by the end of August.

3. A new credit line with USAA

You don’t have to tell me that I already have plenty of credit and credit cards. Trust me, I know. But when USAA offered me a smashing offer of 0% until December 2018 with a $0 transfer fee, I felt it would be foolish to pass up. So, I moved over the truck/credit card debt on the Quicksilver card to this new USAA card. After the Discover card is paid off, I will move to this debt. I will only need to pay $1000/month to beat the end of the promotional period, so my hope is to pay it off by May 2018. Seeing those numbers and dates get me so excited.

4. A change in retirement savings

I stopped contributions to my TSP after listening to Dave Ramsey. I think he made some good points in saying that it doesn’t make sense to contribute to retirement if you’re drowning in debt. He also notes that debt pay-off can be so fast, you may only miss out on a couple of years of contributions. I am happy I have some money in my TSP that will keep building while I’ve stopped contributions, but I feel it is worth stopping those contributions while I finish up some big debt pay-off.

Stopping these contributions freed up an extra $300/month to throw at debt, and once I pay off the credit cards, I will restart the contributions. This is a short-term change, and I look forward to switching back soon.

I believe that is all for the second quarter finances. I believe the third quarter is going to show some big returns on finances, and I cannot wait to see where we’re at in September! How have the last three months gone for you?

Our Debt Pay-Off Journey | First Quarter Report

#debt pay-off journey - 2017 - 1st Quarter Review | Rose Colored Water #debtfreedom #finance #money

As you may have noticed, I stopped doing monthly debt reports back in October. This happened because there were months we made little progress on our goals and I was struggling to keep up with my blog. Between work and college, something had to go. I decided to switch to quarterly reports because I think it gives a better idea of how we’re doing on our debt pay-off and gives me a break from the monotony.

The first months of 2017 have been good and bad. I need not remind you that our dreams for a home fell through in mid-February. While I believe that was a blessing in disguise, it was disappointing and caused us to lose money.

On the positive side, we had been trying to save as much cash as possible during that time, so we were able to make some bigger payments on the truck loan. Unfortunately, because we were trying to save so much cash – our credit card usage went up quite a bit, and we back-tracked several thousand dollars. It is all explained below.

#debt pay-off journey - 2017 - 1st Quarter Review | Rose Colored Water #debtfreedom #finance #money

At the end of 2016, I recorded that we had $68,125 in debt.

Today, we have $69,483.

I am not upset about this. I have accepted our mistakes and turned from them. Since the whole house thing, we have recentered and refocused. We’ve updated our Excel spreadsheet and I even made a “Road to Debt Freedom” poster. Every time we pay off $1000, we color in a patch of road. I started it at $75000 so we would have several patches colored in. We have paid more than $5000 in debt off since we lost the house. Imagine what the numbers would have been if I had showed them to you then!

The “road map” is working well. I think it’s helping Mike to focus better on our end goal and realize that we’re not far from paying off all our debt. We’ve been coloring in 1-2 patches of road every month. This is a vision board we can work with.

A Look at the Numbers

1st Quarter Debt Report 2017

1. The Changes.
The first thing you’ll notice is the Quicksilver card has made it’s way back on to the report, but the USAA truck loan is gone. I mentioned in my 2017 goal review that we transferred our truck loan to the Quicksilver so we could drop the exorbitant 9.7% interest rate down to 4%. The balance transfer has no promotional ending period and will stay at 4% until we pay it off. This is going to save us $$$$ in interest by the time we kill that debt.

2. The Glaring.
You’ll also notice that the Quicksilver is way higher than the amount of our truck loan. We accrued quite a bit of credit card debt while trying to save more cash when we were in the home-buying process. It set us back A LOT. I am acknowledging the mistakes I made and admitting that buying the house would have been extremely negative on our finances, and I probably would have regretted it. Except the yard. Wouldn’t have regretted that. We live and we learn.

3. The Goal.
Our goal this year is to pay off the Quicksilver card. According to our debt pay-off planner app, we can accomplish this by Christmas if we stay the course. That is while paying the minimums on all the other debt. Of course, as I have been known to do, I might change things up as the year progresses.

4. Retirement
We have been saving 10% in our Roth TSP and 10% in our traditional TSP. Find out what a TSP is here. We are going to continue contributing to that while paying off debt because we know we may not put that extra 20% towards debt if we had it in our pockets. I am proud to say that we have reached a cumulative total of $5000 in our retirement savings! Woopee! Gotta start somewhere.

5. The Savings
Our e-fund/savings has also dropped a bit after the whole house charade, but we are working diligently to build it back up again while paying the debt off. We’re sitting at $1300. By the end of the year, we should be in the $2500 range. That’s taking actual car repairs and emergencies in account.

So there’s the dirty laundry. Things could be better, but they could be worse. I am confident with what this year will bring and we are back on the road to debt freedom! How are things going on your side?

Total Debt Pay-Off Report | 2016

2016's Total #Debt Pay-Off Report | Rose Colored Water #money #finance

Last year was full of expenses, but also a lot of income. Mike and I bought a lot of new stuff for our apartment to make it feel more homey. I think that’s part of making more money. I don’t think we’ve suffered from lifestyle inflation. We still make most of our meals at home and rarely eat out. We buy groceries once a week and hardly go shopping.

Overall, I think we do well. However, I want to push ourselves a lot harder in 2017 to live frugally and stop excess spending.

2016's Total #Debt Pay-Off Report | Rose Colored Water #money #finance

Last year, we paid off $15,423 in debt.

It doesn’t seem like a lot, and it’s really not. We spent a lot of money in 2016 on trying to make our apartment feel more like a home. Here are just a few of the things we bought – a mattress for our guest room, a new TV, a dining room table, a tv stand, two new area rugs, and a few new Christmas decorations. I would say that all equaled out to about $2000.

I know that is a lot of money. $2000 could have been used to pay off one of my student loans or bolster our savings. We also blew a lot of cash on eating out and vacationing with family. This all may seem like a waste to some people, but to us, it was necessary.

Before we moved to Colorado, we were broke. When we were both working sub-par jobs in Missouri, we never had money to go out or vacation with family. We didn’t have money for nice things like area rugs or a dining room table. When we moved into our new apartment, we decided we would spend some money to make us feel more at home in our space and make it somewhere our family and friends would want to stay.

Even after spending $2000, it’s still not perfect. We’re going to buy a house within the next two months, so I know the urge to purchase more stuff will be strong. But, 2017 will be the year we really kick our debt’s butt.

The house we buy will lessen our monthly housing payment, so as long as nothing major goes wrong, we can use that extra money to pay more on our debts. We also have enough key furniture pieces for our home that we shouldn’t NEED to buy anything. Everything we might purchase for our home would be purely WANTS.

Our current debt sits at $68,125.

According to my debt pay-off planner app, Mike and I have the ability to pay off the Discover card, Mike’s truck loan, and my two smallest student loans by the end of 2017. That would make 4 less payments to deal with in 2018 (a very busy and vital year to my career). It would free up more than $500 a month to add to our debt pay-off or add to savings.

When I see these numbers, it excites me. I know we can accomplish these goals if we simply put our minds to it. Those are my biggest financial goals for the new year. We’ve come a long way with our debt, but we have a long way to go. 

Cheers to 2017!