July 2016 Debt Repayment Progress Report

Today’s report is going to be a little anti-climactic, as I already announced the big news!  Waiting for nearly a month to tell all of you may have killed me, so I let the cat out of the bag early!

In case you missed it, we are now 100% debt free as of the beginning of July.

It’s surreal.  I have no words.

Well, I do, but I shared most of them in my big announcement post (along with some graphs and a timeline of our journey), so if you want to read all the details, you’ll have to look there.

We are currently NO figures under!  Unfortunately that will only last until we’ve saved up for a down payment.  Then we will join the six figures under club again (in a major way).

While this is our last “debt repayment progress report,” I will continue to do monthly reports as we work toward our next goals, so stick around and we’ll encourage each other on our goals.  The frugal lifestyle isn’t going anywhere either. I’ll continue to share frugal inspiration and financial motivation.

Which brings me to a huge favor I’m asking of you.  I would love, love it if you would take just a minute and answer a few questions for me.  I’ve never done a reader survey before, but I really want to hear from each of you to know what I can do to be more helpful to you!  You can get the survey here (it will open up in a new tab/window so you can click now and go do it after you read this post).  Thank you ever so much!

Enough chit chat–on to the numbers my friends!

Debt Repayment

In July we paid off $9,957 in debt!  Since we live on last month’s income, we started July with all the money we had earned in June (which was an unusually high income month).   After funding all of our budget categories for the month, we had enough to pay off the rest of our debt.  Then, we focused on the reward we had planned for ourselves.  At the end of the month, we even had some left over to put toward our next goals, too.

If you’re new here, please know that our repayment didn’t always look like this. We were going slow and steady for a long time before we built up this kind of momentum.  If you want to see what I mean, you can check out some of our old repayment reports.  After reducing our expenses to their minimum and increasing our income, our repayments increased dramatically (much of this was in the past eight months or so).

If you are just starting out on your journey to pay off debt, check out my Smash Debt Quick-Start Guide to help you get organized and make a plan to pay off your debt.

Income

Our total net income for July was $9,933. Since we live on last month’s income, this is income that we haven’t used yet.  We will be budgeting and spending it in August.

Attorney Income (Day Job)– $5,141  Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015.   His actual take-home pay is $3,778, but I add back in the cost of the benefits (insurance, dental, vision, parking, union dues and retirement) that are automatically taken out of his check so that I can show them to you in our budget below.

Attorney Income (Private Practice)– $2,432  On top of working full-time (with a three-hour round-trip commute), my husband has his own private law practice on the side.  Taking on what is essentially a second full-time job, has made a huge difference in our ability to pay off debt in a hurry.  He will go back to working just one job in the future, but he hasn’t yet decided which one he’s going to go with!

My Income (Blog)– $2,360 The income that I report is the income that I received this month minus all of my blogging expenses.  I started this blog three years ago knowing that I wanted to document our debt repayment progress.  I also figured it would keep us motivated and accountable and we might be able to encourage others in similar situations.  I knew that over time, it would be possible to actually make money blogging.  I have an entire post about why I started blogging and what I’ve learned.

If you’re interested in the details of my blogging income and expenses as well as other blogging tips and resources, you can sign up for my Behind-the-Scenes Blogging emails to get the scoop.  If you want to start your own money-making blog, check out my complete step-by-step instructions for setting up a self-hosted blog.

Spending

Each month we budget down to zero using last month’s income.  Our spending in July came from the income we earned in June (one of our highest earning months).  In addition to the debt payment above, here’s how we spent money in July:

Tithing– $1,815 We happily pay a 10% tithe on our total income from the previous month.  You can read more about why we pay tithing even though we’re in debt.

Other Giving– $85 Other charitable donations this month.

Mortgage/Rent– $0  Living in my in-laws’ unfinished basement is a huge blessing.  I don’t expect everyone to do what we do, but for us, it’s worth sacrificing some comforts and privacy to pay off our debt faster.  If you are considering living with family, here are some things to consider.

Internet– $0  Thanks to some legal work that my husband did for our service provider, we will have free internet for a while.  It’s nice to stretch our budget by bartering, though we will still pay income tax on the fair market value of Internet service at tax time next year.

Republic Wireless Cell Phones– $26  We switched our Republic Wireless phones to the new Republic Refund plans.  With our refund for the data we didn’t use the month before, my husband and I each ended up paying just over $13 for our plans.  That includes taxes too!  You can read about getting refunded for cell data you don’t use here.

Health Insurance– $739 We have our insurance through my husband’s employer.  This is the portion of the insurance premium that his employer does not cover.  It includes dental and vision insurance premiums too.  The portion that comes out of his paycheck will go down after he has worked at the state for a year, which is coming soon!

Car Insurance– $105  We insure two older vehicles (both 1997).  Our auto insurance at USAA is great.  In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat.

Renters Insurance– $14  Our renters insurance is also through USAA.  It doesn’t cost much and it’s really great to have when you need it.

Food– $368 Well, we went over our normal $300 food budget this month, plain and simple.  More trips into town meant more opportunities to run into the store, you know, “just to grab X” and ended up coming out with and came out with Y, Z, A, B, and C because they were on sale or screamed “buy me” really loudly.  I’m (once again) convinced that fewer trips to the store is better for the budget.  With school starting soon, I won’t be going into town as much.  Kudos to you who don’t live in the boonies and have the self-control to stay out of the store!

Gas– $376  Gas around here is sitting around $2.30 per gallon.  Normally it’s my husband’s commute that requires a huge gas budget, but over the summer, the van gets its fair share of fill-ups too.  I’m interested to see how our gas budget changes with my youngest starting half-day kindergarten, meaning an extra trip to school to pick him up each day.

Parking– $155– Working downtown means paying for parking.  It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation I suppose.

Clothing– ($38) I didn’t buy any clothes this month, but I returned a few items I had purchased previously, so yes, that’s a negative spent number because it was refunded.

Household– $44 I got some toiletries, sandwich bags, school supplies, and a few other miscellaneous household necessities.

Baby– $16 This category only pops up only occasionally, since our fourth little one hasn’t cost us much at all.  I bought a large box of store-brand disposable diapers to use at night.  We use cloth diapers during the day, but I’ve been doing disposables at night.  This big box will last several months.  Once I wean her I will probably use cloth at night.

Entertainment– $17 We watched several movies on VidAngel and bought some plain white t-shirts for the kids to decorate and other supplies for summer crafts.

Car Repair– $0 Usually I don’t list random categories when we spend zero, but I was just excited about this!  Every month that our older cars have no problems is a huge blessing! 🙂

Medical– $325 Dental work for hubby.  Root canals aren’t any fun, but they are cheaper with dental insurance.  Last time (with just our dental discount plan), they were much more.

Retirement– $484 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement.  While we have some retirement savings from before law school, it’s nice to be contributing again.

College Savings– $100  We contribute $25 per month per child to 529 accounts.  More on our decision to start saving for college in this post.

New Goals

I elaborated on our new goals in a recent post, but to put it simply, we have three smaller goals that we’re aiming at before we go full-speed into saving for a house (which we are SO itching to do).  And like I mentioned in the post about our post-debt goals, if the right house, in the right location, comes along for the right price, we may temporarily ditch these goals and go for a house instead.  Right now we’re trying (really hard) to be patient.

I’ll lump these goals together for now as “pre-house goals” since we’re just splitting the amount evenly between all three.  The total we’re aiming for for them is $33,000 and we’re hoping to be done by December.

At the end of July, after paying off the remainder of our debt and treating ourselves to a reward, we put $2,380 toward our pre-house goals.

Our Debt-Free Reward

We have a one-time budget category this month called Debt Reward.  A while back, I answered some of the questions we often get about what our life after debt would look like.  I shared what we planned to do as a celebration for paying off our student loan debt, which totaled $144,046.  I wanted to do all of the spending for this planned splurge in the same month so we weren’t dragging it out (and continually attributing any splurge to our “reward”).

For the record (and your curiosity), here’s the breakdown of what we spent on our reward.  I just peeked at our estimate (when we announced our debt-free reward plan) and saw that we planned to spend around $1,300.  Without really even looking at that estimate again, we came eerily close, paying a total of $1,298, although that doesn’t include $50 in Amazon gift cards that went toward the accessories we bought on Amazon.

Here’s what we got:

3 Bikes for the kids– Heeding the advice of the kind and honest store owner of a local bike shop, we went to Walmart for bikes.  He could have tried to sell us the ones he had (fancy name brand bikes for three times the price), but told us that the ones at Walmart would be a better buy for our kids.  He said there’s no sense in spending big money on kids bikes that they’ll outgrow or be rough with when they don’t need all the components of a fancy bike.

New (used) bike for me– Because we were so impressed with the bike shop owner’s honesty and looking out for our best interest, we went to him when it was time to buy a bike for me.  I got a used Specialized bike for $378.

Bike tune-up and repair– Mr. SixFiguresUnder already had a mountain bike, but it needed some love.  We got it tuned up and replaced a few parts for $152.

Bike helmets for kids– We got them locally when we got the bikes.

Bike helmets for the adults– On the day that I announced being debt-free, a sweet reader let me know that Amazon was having a bike gear deal-of-the-day, which included this awesome helmet!  It’s seriously the best-fitting helmet I’ve ever worn.

Ride-along bike– We got a ride-along bike for our 4-year-old who can’t keep up on our family rides.  All of the kids LOVE it!  We didn’t initially plan on buying this (or even really think of it as an option), but it is wonderful!

Bike Trailer–  I read lots of reviews before deciding on this model for the littlest one.  We are super happy with our purchase and feel like we got an amazing deal.  When we got it out of the box, she immediately climbed in and wanted to be buckled.  The excitement hasn’t faded.  She loves it!  It doubles as a stroller and also has room for snacks, water, and gear.

3 Sleeping bags— Instead of getting child-size bags, we got adult ones so they would have room to grow.  Our older two are at the age where they will outgrow the child-size bags very soon.  Plus, the lightweight backpacking bags we chose were the same weight as the children’s bags we were looking at.  They’ve used them several times already, both camping with our family and sleeping out under the stars at home.

Backpacks– We got backpacking packs for the two older kids.  Our 4-year-old is small enough that a school backpack easily holds all the weight he should carry.  After doing my research, I went for the Deuter Fox 30 for the older kids because of the way that it can grow with them.  Since our family loves outdoor adventures, I imagine they will put lots of miles on their packs before outgrowing them around age 12.

Inflatable Raft– This raft was, admittedly, an impulse buy.  The store where we got the kids’ sleeping bags had the raft displayed outside the store.  We thought it would be a great addition to our reward, but waffled about making an impulse purchase like this (it’s a slippery slope, you know).  We checked out with just the sleeping bags and got in the car.  After talking it over and checking the internet for reviews on the raft and price comparisons, we decided it was a good purchase.  We haven’t been disappointed!

We went for our first family ride with all of our new gear on Friday.  It was a blast!  Everyone had a great time.  It was definitely money well-spent and is something that we’ll enjoy over and over again!

One more thing!

Whew!  That was a long post!  Kudos to you for making it all the way to the end!   Thank you for being a faithful reader.  It would mean so much to me if you would take a minute (it seriously won’t take any longer) to complete my first ever reader survey.  I’ve been meaning to do one of these for a long time, but finally made the time to put one together.  Thank you so much!!

How About You?

• I’d love to hear about how your budget and/or debt repayment went in July!

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