Making Large Payoffs Instead of Snowballing
I'll be honest with ya, we didn't do the debt snowball exactly as Dave says #donttelldave. But like I said from the very beginning, we used FPU as a foundation to find what suited our situation and our personalities. Since you've made it this far in reading these blog entries, you know that we decided to live off of Cory's income and mine all went towards attacking our debt. We knew this would mean a HARD life adjustment but it was a short-term loss for a long-term gain. I say short-term loss, or hurt, or struggling season, or months of frustration. I could call it a myriad of things, but what remains the important word is "short.” We had agreed that instead of snowballing our debt/payments, we would give ourselves back that payment to soften the financial load. Our first big payoff was the first car we bought together, Karl. Once we got Karl paid off we had another $235.00 back in our pocket every month! Now yes, we could have applied that $235.00 to our other debts, but we felt it was important to reward ourselves for staying faithful to the process. Signing up for nearly two years of struggle with no reward didn’t seem sustainable to us. There were definitely days where we had less than $1 in our checking account and needed to go another 2 days before payday. We could FEEL this life change and we were determined to not touch the emergency fund (FPU Term…seeing a trend?), nor the money in savings allocated for debt. Rewarding ourselves with that extra $235.00 back in our pocket to give us some breathing room was so motivating. Not only did it give us breathing room to help us relax and de-stress, but it kept us going.
The second big life change we committed ourselves to was prioritizing our spending. Once we started having our budget meetings regularly (and they were starting to be productive), we saw where our money was going. Our food category was an embarrassing number made up of grocery shopping and eating out, this needed to change. Our entertainment category between TV, internet, and XM Radio was completely unnecessary and needed to change. Our bills were frustrating and seemingly never-ending but yet we hadn't thought to restructure our way of life. We decided to cut things like XM Radio, cable, expensive internet providers. We changed phone providers and got on Cricket Wireless (don’t knock it til you’ve tried it!), shopped around for the least expensive car, home,and health insurance rates, stopped eating out, and started shopping exclusively at Aldi. I cut a lot of my unused photography subscriptions, any type of monthly subscriptions that didn't need (Le Tote, Birch Box, Magazine Subscriptions just to name a few). I stopped getting my nails done professionally. Got less frequent haircuts and coloring. Anything that would result in money back in our pocket I cut out. We even cut any store credit cards; Target, Macy's, Old Navy... even my Victoria Secret card! Yes, friends, it got real. All of those cards were just plastic reminders of my lack of discipline. I thought I couldn't wait 2 more weeks or a month to buy whatever it was, I had to have it right then right there. - BUT I WAS WRONG.
Fast forward a little bit and we were making some serious progress. By summer to early fall of 2017 we paid off Cory's car, which was another $250 back to us each month. We kept sacrificing and saving until we could pay off his student loans later in 2017. At this point we had our last 2 big debts staring at us: my student loans amounting to roughly $19,000 and our mortgage amounting to roughly $89,000. It was nearing the holiday season and we were starting to get a little stir crazy with our debt plan. We had said no to so many things that we had almost stopped enjoying things. So in November of 2017 we planned the ultimate traveling month all while sticking to the budget. The beginning of the month stayed with some of our incredible friends in Los Angeles and flew on some of Cory's work miles. Then for Thanksgiving, we took a bucket list trip and went to New York City forthe Macys Day Parade and stayed on hotel points. We didn't eat extravagantly or shop until we spent every dime, we simply enjoyed each other's company and took a foot tour of the city. But let me tell you friends, being able to take 2 trips in one month and not have to worry about our finances was easily the most freeing feeling I'd ever experienced. I remember growing up taking trips to western New York where my family is and being strapped for cash the entire trip. And when I got older needing to help pay for meals or gas to make sure the trip happened. Family vacations of luxury were certainly not a thing I was accustomed to. We never flew (anywhere) always drove and always stayed with family. So being an adult who was able to travel freely without any financial fear was a new experience. I wouldn't experience this same sense of freedom again until it came time for us to buy a new couch.