Our $25,000 Debt Reduction Goal
Closing in on these final months of our year long Operation Debt Reduction, we feel the need to set a dollar amount goal for our debt payoff from July 1, 2011 to July 1, 2012. Initially, we didn’t want to give a specific number so we wouldn’t feel defeated if we were nowhere near reaching it. Last summer, when Brad and I set about this challenge to change our spending behavior in an effort to pay down our debts, we honestly had no idea what we were even capable of saving on a monthly basis or paying towards debt. We were newbies to the world of saving. However, we feel now that we can aim for a set number knowing how much time is left in our spending lockdown. Having already paid down nearly $20,000 in just over 9 months, we believe we are capable of paying off $25,000 by July 1. What an achievement it would be to say we paid off $25,000 in 1 year just by changing our spending habits. So there it is, our goal is set.
Updates from the Bay
It’s been a while since I’ve given the low down on our savings progress, and it’s not because everything is going smoothly. In fact, we’ve been facing challenges with saving money recently, but our lifestyle spending changes over the past 8 months have equipped us to deal with it better. We are not in crisis mode like we often were in the first few months of our Operation Debt Reduction. First of all, it’s like second nature for us to hunker down and get by on minimal spending when necessary. But more importantly, we understand now, like never before, that patience is key to achieving our goals—there’s no magic wand to wave, zap the debt and put ourselves on a jet plane to paradise. It’s unrealistic to think that life isn’t free from hardship. Surprisingly to me, this whole savings challenge has awakened me to accepting patience into my life.
So what’s been troubling us? Lately, my husband’s freelance career has gone through it’s fair share of trials and tribulations, but just when we think his jobs are drying up or falling through, another opportunity always arises. And the future looks bright. Another reason that we have to be patient and remain focused on our long term goals. Life is not always gumdrops and lollipops.
WooHOO!
This is just the kind of savings we needed to regain some spark in our Operation Debt Reduction mission. Living on $30 for the last 10 days of the month help lay the path to BIG savings! Obviously, we would have had a pretty big number even if we hadn’t created that challenge, but it’s surprising how much money can waste away in a 10 day period if we’re not paying attention. As always, the majority of this, $2,000 to be exact, is going toward our current lowest debt which is my student loan. And that is being applied on top of my monthly minimum payment. As I wrote in last month’s savings post, we have started a separate savings account for travel that is on our summer calendar. We will apply February’s remaining savings of $382.28 to that fund. Of course, this savings account will also act as an additional emergency fund if we need it to.
To check out our progress in saving for the past 8 months, visit here. To better understand how we’re pulling this off, go here. And look out for tomorrow’s post which will show our new debt totals.
$30 for 10 Days
I think I’m finally coming out of my New Year funk…maybe it’s the beginning of a seasonal shift, maybe it’s astrological, or maybe it’s a side effect of a full day free music festival I attended yesterday. Whatever, I finally get the feeling I’m in a better place mentally. January and February have been much tougher months for saving money. Brad thinks it was the elation of saving a load of money the last 2 months of 2011, resulting in nearly $10,000 of debt reduction. I basically came off an emotional high. On top of that, we’re both kind of sick of being restricted on spending. Our grocery bills have been up due to lack of planning meals and budgeting properly. We’ve gone over our individual $25 allowances, which allow us to spend freely outside our normal guidelines. Heck, we splurged big on the first day of February with a guitar purchase! I can’t claim any prestigious penny pinching titles this month.
However we look at it, we realize it’s a dip on this bumpy road. We still have the potential to show up at the end of February with some big savings. Closing in on the final stretch of the month, there’s nothing like a good ol’ challenge to muster up some of our initial fire with Operation Debt Reduction. Strategic planning is in full effect this Monday, on how little money we can survive on for the next 10 days left in February. With an empty fridge and cabinets, we’re facing a difficult task. We only have $30 left in our cash envelope. We’ll let you know how we fare.
Our First Official Splurge
Confession.
So we’ve been going about the business of sticking to our Operation Debt Reduction spending guidelines for the past 7 months. But yesterday, I think we technically went off of it with a pretty big purchase. We bought an acoustic guitar.
Now, we could try to validate this purchase by saying that musical instruments were not included on our “no spend” list. Yeah, that would be pushing it. We could even think of it abstractly, like playing the guitar is therapeutic so this is an authorized health related investment. Ummmm okay. Or we could just say, “You know what? We splurged!”
No matter how we categorize this purchase, it’s definitely not a necessity. Despite that, we are finding pure joy in owning a new acoustic. This decision to buy one came about over the past month while we borrowed my sister’s guitar. Brad’s love of the acoustic was rekindled on top of my newfound love in learning to play. Some things just can’t be explained, and I won’t even try. We’re really going to try to buckle down and get back on track with low spending for the month of February. We’re still laser focused on our Operation Debt Reduction mission.
Looks like we won’t be hanging around the 70’s much longer. After applying $414.97 worth of monthly savings to my student loan on top of monthly minimum payments on both loans, we’ve reduced our overall debt by over $800 this month. It would be impressive to bring our debt total down to the 60’s by the beginning of next month. This will require some diligent penny pinching on our part, but we’ve proven we can save big when we cut back on grocery and general household spending. To check out the progress of our debt reduction over the past 7 months, visit here. To see how we’re saving money, check out our Operation Debt Reduction spending guidelines.
Not even close to matching our nearly $6000.00 dollars worth of savings last month, but hey, we’ll take whatever we can get. Our number is on the low side due to freelancin’ husband’s paycheck not being received this month. He picked up some work with a new company which required official paperwork to place him into their pay cycle. It’s the end of the month, and he’s still not in their system. This is one of the downsides to freelance, and we expected this scenario pretty early on. Although, we were never thrown off course, we still find it frustrating when my husband doesn’t receive immediate payment for his hard work.
All the same, we’re starting off 2012 with savings. And with this savings, we are applying $414.97 to my student loan. The remaining $200 will be applied to our new travel savings account. In anticipation of a trip this summer to our good friend’s wedding in Southern Cali, we decided to start officially saving for it. We would much rather tuck a little away each month rather than dishing it out all at once.
I’ll post new debt totals tomorrow!
About Me
My husband and I, both artists, are seeking financial sanity amidst the financial insanity in the San Francisco Bay Area. We are on a quest to change our spending habits, get out of debt and start saving.
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