Honestly, I thought I would be reporting A LOT less savings this month, if any. I’m delighted with this number. The majority of our “would be” savings from last month, all of our $1000 emergency savings, nearly $600 of travel savings, and then some of our income from this month were put towards paying our federal taxes. Keeping on the sunny side, our poor tax planning with Brad’s 2011 freelance work brought us some valuable lessons. We are already arranging to put more than enough aside from Brad’s pay in a separate savings account solely for taxes.
Because we drained our emergency savings of $1000 that normally sits in our checking account untouched (this helps prevent us from using a credit card), we have to replenish it. So all $855.12 will be applied to our emergency savings, and our April debt reduction will only be from our monthly minimum payments. In order to achieve our $25,000 annual debt reduction goal, we will need to make BIG strides in saving for May and June.
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.
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.
I can’t say that I’ve entered the New Year all Gung-ho and zoomed in on my savings goals. But by golly, I need to snap out it. There is a little bit more time left in the month of February, and I’m all about making it happen.
(Art: peasforeveryone on Flickr)
My favorite thing about creating our budget for January, was that I did not have to include a credit card payment. In the beginning of our debt snowball in July, we were paying close to a $200 minimum monthly payment (which decreased as we paid down the balance). Even if we didn’t have any savings for the month, we still had to pay that minimum. Having that extra money to float around in our monthly budget is giving us more freedom this month - like a hair cut, oil change or budget travel money. Can’t imagine what it’s going to feel like when we get rid of our $750 monthly minimum payments on student loans.
(Art source: thingsweforget.blogspot.com)
Although not anywhere near our stellar savings from last month, we’re just glad to have a number on the board. We felt slightly off course all month long partially due to our cat’s unexpected visit to the vet and realizing that my husband would have another delayed pay cycle that would result in less income than anticipated for October. But also to blame was our overall slacking with grocery shopping—our spending was almost double what it was last month. Our saving grace, literally, was the surprise gift money(early birthday present) and unforseen miscellaneous income we received over the past couple of weeks. This triggered us to rally at the end to retain some October savings, and boy, does it feel good! We were absolutely not willing to dip into our Ireland travel funds.
Now we can apply $527.33 to the credit card. I’ll post our November 1 debt totals tomorrow.