It has been a year since we’ve been living on 1 income. When I went on
maternity leave April 2019, I stayed home for 3 months. We had extra money saved so we were able to live off that. I then went back
to work and my husband quit his job to watch our baby. During this
time it was a scary yet humbling time for us! I was afraid we couldn’t
pay our bills! However we were able to pay off the balance of my $35,000 school loan in July 2019 and paid off the
balance of my husband’s $10,000 loan with our wedding money. We were able to live frugally during my maternity leave, but when I went back to work we ended up with a credit balance at $14,696.63 with 21.49% interest rate and maxing out another credit card about $14,000 with 16.74% interest rate. How did this happen! Balancing being a working mom, holidays, paying for my husband bills/expenses and social media influence to buy things I don't need 😞.
Feeling overwhelmed, mad and desperate about not making more money, our overall expenses, credit card debt, having a new baby, my husband for staying home watching the baby and not working evening/nights to help with the bills. How did I let our finances get out of control! I decided to refinance my credit cards, but I could not get a loan big enough to finance all of my debt. The only loan I could get was $10,000
loan at 9% interest rate. I decided to dump this money to the highest-interest
credit card. I didn't have any extra money to put towards debt.
In my attempt to fix this situation, I decided to pull my daughter out
of private school. I was paying $734 monthly. This money could go to
bills. Because it was in the middle of school year, I talked to the
school's office and they were able to decrease her tuition to $400
monthly. This helped so I can pay some bills!
I prayed a lot during these hard time. Then COVID-19 happen and my dad lost his job! I felt so bad that I couldn't help them! I started watching YouTube and found The Budget Mom and she changed my life. It didn't happen right away. I actually felt I couldn't do anything with my financial situation being so tight. Slowly but surely I started to make changes to our budget. I started to review my past expenses for the past year. I looked at areas where I could cut. Grocery spending was a pretty big category that I decided to tackle. I was able to decrease grocery spending so I had more money to debt and savings! I was also able to get a child care grant from work. My dad was helping my husband with childcare and virtual school, so I gave the money to him.
4/23/2020 STARTING DEBT: $59,562
When my daughter was finally out of school, I felt my debt free journey could get rolling. I was able to pay extra to the
highest-interest debt! I was so inspired to get going I binge watched all of the The Budget Mom YouTube and read all the articles on The Budget Mom Blog and started using all the PDF from the Free Resources. I did the Budget Blueprint email course and downloaded the free Budget crush workbook and mapped out my upcoming #budgetbypaycheck.
I realize for years I have been doing her system of budgeting by using
the calendar system and since I get paid biweekly I normally split my
expenses by 2. I have 2 checking accounts for fixed expenses and
variable expenses, multiple savings accounts for my goals, did all my
math on my my iPhone notes, set reminders, added calendar events for my
bills, used excel spreadsheets to review my expenses. This time I will
be putting pen to paper and writing it all down instead of using my
iPhone, including doing the highlighter method for my expenses.
I tried to do cash envelopes, but it was to cumbersome for me to go to the bank/ATM to pull out cash. Not everyone wants to touch cash due to COVID-19. So I do cashless and use index cards to track my expenses when I am out and about.
As you can tell, I am not a good saver. The Budget Mom talked about sinking funds and I decided to start doing this. I have never heard of this concept before, but it made sense to me to save for the future monthly so I don't have to use any credit cards ever again. I had to review last year's bank statements and credit cards to determine my annual expenses for certain irregular expenses that are not fixed monthly. I decided to make sinking funds for the following categories:
- RN
- Home
- Car
- Family
- Beauty
- Events
I do have a vacation fund with Ally. COVID-19 changed our vacation plans. I was so good about saving money for vacations. I put aside $300 monthly, when I could have used it to pay off bills or for an emergency fund! I decided to change this.
Since Disneyland is closed, we decided to use the money we had saved to pay off the remaining balance $2000 credit card debt that I
used for wedding expenses. We were fortunate enough to get a stimulus check so I decided to move
this money to Ally to create an emergency fund. I figure, if anything
happens, we have something now! My goal is to have 3-6 months emergency
fund! I still have money on the side for our Las Vegas Trip. I don't know if we are going to go during this COVID-19 craziness, but I have the money and we are not touching it for anything else.
The last thing I started to do was create visual trackers. These tools are motivating and help you see progress! I get my daughter involved with the coloring when we have something to save for and pay down some debt. I get my trackers from The Budget Mom and Debt Free Chart.
I am so glad I started to address my finances head on. We want to eventually buy a bigger house because my parents will move in with us. When we met with the our realtor and spoke with the loan officer, he told us to pay off my personal loan. After reviewing my finances, I took this as a challenge to pay off one of my credit cards too. We plan to put my townhouse on the market at the end of 2021. So I hope to pay off my car loan, 1 personal loan and 1 credit card by then! These are some pretty big goals, but with motivation and determination, I know we can do this!
You can check out some of my Instagram Highlights of my progress:
Check out my Financial Independence Resource Page
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