After many months of thinking about doing them, I started my debt repayment posts in January 2014. I calculated that I would need to put a minimum of $2,068 per month towards our non-mortgage debt if we wanted to be debt free in 50 months. Four months into tracking and we’re not too far off our goal. February had a few setbacks and we were short by about $500, not a huge amount to make up at the end of the day. I’ve received a few comments and emails about how we’re able to reach our goals every month.
To start, both my husband and I have good, stable jobs, with a lot of room to grow. We’re both young in our professional careers and my husband especially has a lot of potential in terms of professional growth. In the last two years alone he’s gone up by $5.00/hour with potential on the near horizon for even more raises. Having reliable income is the main source of our monthly payments. There is no way I could even fathom making these sorts of payments if I wasn’t in a good-paying career.
While I took on more debt to get my job (through further education) I have no regret about it. While I went into more debt I entered the job force and immediately had many job prospects and a life-long career. If you’re in debt and don’t have a good stable job, get one. I understand this sounds easier than it actually is, but do everything in your power to make it happen. Speak to career counselors, look into post secondary options, exhaust every option.
Budget Our Extra Debt Payments
We ”spend” every single penny we make each month. I’ve set up our budget in such a way that even extra debt payments are established as a ”bill”. If I just let the money sit in our account until the end of the month to roll over it would be absorbed or spent somehow. Because my pay varies (I’m paid hourly) our budget is based upon the least I would make on average if it’s more than my estimated minimum (I sometimes work an extra day or don’t take a lunch break), our very fluid budget is adjusted to account for an extra debt payment ”bill”. Working one extra day per month along gives us an extra $200 to play with on average (less daycare etc). The change in my income alone and living on a budget that is a low estimate helps a lot in making our $2,000+ goal every month.
Because we’re both paid bi-weekly I don’t budget the two ”extra” pays every year we get allowing us to put some of this money towards our debt as well.
Make More Money
There’s no way around it. We needed to make more money. My main source of additional income is my online income through this blog and freelance writing, for this I am eternally grateful. My husband also writes online and makes a little bit himself. I also have the option of working more at my current job. When I went back from maternity leave, I started working a four day work week to give a little more work/life balance. The beauty of this being that I have one day per week I can work if we need me to either at my office or as a fill-in. I like that I have this ”card in my pocket” if I need to.
While we could be debt free even faster by me working five days per week it’s not something either one of us is interested in right now. I’d rather balance my life and work on debt than have a stressed out life just to be debt free faster. Paying off debt is a very personal journey. You have to figure out what you need to do and make it happen. For us it was making the most of our monthly budget and supplementing it in any way possible. Accept that you’ll have good months and bad months. Moving in the right direction is the most important thing!
Picture adapted from one found here.