May 2020 Debt Free Journey

May was the first month of our debt free journey where we lived on Travis’s income alone. In March I got a small check for working for a few days, and in April we received the stimulus check. I knew we would have to be even more cautious with our budgets this month to stay on track. To really get a good picture of where our money has been going this year, and also to attempt to set a realistic budget, I went back and tracked all of our income and spending since January.

What blew my mind was that I really thought we were doing a good job with our money at the beginning of the year. Using Easy Budget Blogs free digital budgeting spreadsheet I realized a few things.

• 

First of all, as much as I love the place, I don’t need to step foot in a Target anytime soon. Honestly, it’s where I like to pick up diapers for LJ and other baby/child essentials. However, it’s too easy for me to go in expecting to spend $50 bucks and come out having spent $263. If we need something I’ll be placing a drive up pickup order for now. The less I see, the less I’m tempted. If you’re wondering what kind of problem Target has been this year, in total from January to April, we spent $1,600+ there. WHAT? HOW? I’m honestly not even sure what all we have to show for it, and therein lies the problem.

Target definitely wasn’t our only pitfall though. We were spending far more on eating out than I thought or expected. Our medical and dental bills were also crazy high. I’ll be looking in to using the FSA Travis’s work provides to help out with these expenses in the future.

Minimalism

Call it what you want: “cozy minimalism,” decluttering, simplifying, etc. I don’t want to be drowning in stuff. I don’t want to spend a large portion of my free time cleaning up, taking care of, or maintaining items in our home. Thus, it’s important that I don’t buy random stuff on a regular basis. We have also been on the path to purchase more intentionally from small local shops and ethical brands, so unplanned Target purchases don’t really align with those values. We’ll still need diapers in the next few months, so other than that, I’m going to start a “Summer no spend challenge.” I hope that by the end of the summer we’ll have made even more progress on our debt free journey and learned even more about our spending habits.

Summer No Spend Challenge

I’m making this “no spend challenge” one of my June goals, although I’m planning on carrying it through July and August as well. To increase our chances of success I’m going to avoid physically going into stores whenever possible. I’ll use curbside pickup when available for necessities. Below are the rules I’m planning on following:

If I desperately need or want something that isn’t on this list I’ll look to my Buy Nothing group on Facebook to see if someone else is letting go of the thing I’m looking for. Otherwise, I’ll write it down and wait until September to see if I still want or need it.

• 

Speaking of Groceries

Groceries and eating out have consistently been our highest spending category since we started dating 6+years ago. For most of those 6 years there were only two of us! Even with a small child our grocery bill often gets out of control. We don’t buy a ton of prepackaged food, and I like to grocery shop weekly or bimonthly. Soda, chips, popcorn, etc rarely make it into our cart. I’m vegetarian, so I don’t have the high expense of meat (although we do buy meat alternatives for some meals.)

• 

• 

• 

Regardless, our grocery budget is one I’ve wanted to get under control for a while. We spent $815 on groceries in January, $687 in February, $294 in March (we were in CA for part of the month and spend $600+ eating out,) and $538 in April. Like I mentioned previously, these numbers don’t include the money we spent on eating out. That’s an average of $583 a month. For that price, we shouldn’t need to eat out because there’s definitely food at home.

In May I had the grand idea to only spend $260 on groceries for the entire month. I’ve been home because of COVID-19, so I technically have the time to focus on meal planning, grocery shopping, and cooking even more from scratch. We also spent a week and a half at our family cabin, and did our best to bring all the food we would need for our trip. I went over budget, by $91, but I’m counting May as a huge improvement. $350 versus an average of $583 is much better in my opinion. I’m adjusting our June budget to $300 to see if I can spend even less. I’ll probably attempt a “pantry challenge” to help reach this goal.

Cash Envelopes

I’ve always been intrigued by people who use cash envelopes. We don’t go to the bank often, and I like being able to track all of our purchases from our joint checking account. However, I thought it’d be a good time to make and try out cash envelopes. I made a set of envelopes with construction paper, tape runner glue, oversized labels, and printed spending trackers. I like the way they came out, and they fit pretty well into my wallet.

• 

We went to the ATM after our mid-month payday and withdrew $200. I split it between the envelopes based on what I thought we would spend until the next payday. Some of the envelopes were dedicated to expenses I knew we would have such as gas and groceries. Others were more “sinking fund-esque,” like car maintenance and gifts. I did go over budget in the groceries department though, so I ended up pulling money from some of the different envelopes to make up for it.

Overall, I think cash envelopes could work pretty well for us if we were physically going inside more stores. Right now I think it’s easier and safer to continue using our debit cards. It was helpful to pull money out for our sinking funds though, so I’m going to try that going forward. For our main discretionary spending categories I’m going to try to utilize an app Travis and I can share to track what we are spending throughout the month.

Emergency Fund and Baby Steps

Before I get to our debt free journey numbers for May, I wanted to explain a bit of our strategy. We’re somewhat following Dave Ramseys baby steps. We started off by saving 1k in an emergency fund, but had to use some of that for medical bills earlier this year. We have since been adding $200 a month back into. We’ll be back up to 1k at the beginning of June. However, we will still continue to add $200 a month while we pay off our debt.

This isn’t what Ramsey recommends, but our history tells us that while 1k will definitely lessen the blow of whatever calamity strikes us, it probably won’t be enough to cover our behinds. That money is already budgeted for, so we won’t be stopping those automatic deposits. I also think this will help give us a small jump start on our 3-6 month emergency fun when we’re done paying off our debt.

Grand Total:

Our grand total and debts look a little different this month for two reasons. First, I decided to include my cell phone payment in our debt list. I lost my phone and got a new one in January. We financed it and had the payments added to our monthly bill. That process was so normal to me I didn’t even realize it was a “debt” until I saw an Instagram post from the Debt Free Community this past month.

Travis’s parents were also kind enough to buy us a laptop. We didn’t have our own home computer, and creating this blog and doing spreadsheets and budgeting on my phone was pretty challenging. We are planning on paying them back in full by August, if not sooner. They also paid for our car repairs earlier this year, so that is included in the amount we owe them.

• 

Here is the current breakdown and grand total of our debt:

• Family Loan: $1,612.85
• Cell Phone: $958.20
• Wedding Loan: $4,448.31
• SoFi Loan: $15,104.38
• Nelnet: $20,450.87
• Heartland: $3,603.69
• Fedloan: $3,481.65
• GRAND TOTAL: $49,659.95

Our debt appears to have gone up this month because of the new additions, but really, both of these (minus the computer) should have been included in January, March, and April’s debt free journey updates. I’ll be using this list going forward. I found a free debt snowball Excel sheet online that works pretty well with Numbers, and I planned out our projected Debt Free Date! I’m going to look it over and tweak it a bit more, and I’ll be excited to share it later this month!

To be honest, it’s a little discouraging to see this number increase from last month. I know that we are going to knock out those top two pretty quickly and be right back on track. It’s better to have a clear overview that encompasses everything, and this list does that.

Are there debts you don’t include in your grand total list, like how I forgot about my cell phone? What do you do when you have a set back or fee discouraged on your debt free journey?

Thank you for reading,

Caitlyn