Wow this year is FLYING by. I know I say it in every monthly update but it truly feels like light speed.
For the last 2 weeks or so I’ve been listening to Dave Ramsey nearly non-stop…well during car rides mostly! I don’t follow his plan exactly, I’m not a huge fan of him, and I don’t agree with everything he says…but I’ve definitely learned a lot. It’s just been nice to fill my brain with financial questions/advice which motivates me to pay off my debt even faster.
A few things I disagree with Dave Ramsey about:
-Driving a “hoopty”: Dave always tells callers to buy a $1000 car. First of all, who can find a $1000 car? Second, a car that cheap is either going to break down on you OR require a ton of maintenance, which will end up causing more debt and worry. A brand new car isn’t necessary, but I prefer to feel safe when I drive.
-Living on rice and beans: I’m not sure how literal he is when saying this but unless you’re literally about to be homeless…it’s still important for you to consume your nutrients (from fresh fruits and veggies). I love food and I cook almost all of my food at home, so you definitely won’t find me eating just rice and beans for a few years.
-No vacations: Again, if you’re about to lose your home or you have $300K in debt on a $20K income then maybe you should avoid vacations. However, I also want to enjoy my life while I can. This doesn’t mean I’m traveling every month but I do believe in vacationing.
I also break one of his rules: I am currently paying off debt but also contributing to retirement savings. I think both can and should be done to a certain extent.
After a few calculations, I also determined that I should be able to pay off ALL my debt in less than 4 years if all things stay as they are. It may even be possible to pay them off in 2 to 3 years but I try to just focus on each month.
Okay enough rambling…I’m not going to lie, I spent A LOT of money in July on what you could consider unnecessary items. I will explain below!
DEBT PAYMENT/INCOME SPREADSHEET
*This spreadsheet does not include payments for my insurance (life, health, vision, dental)*
CURRENT FICO SCORE: 683
THE GOOD NEWS
My credit score went up 1 point
As I always says, small wins are still wins! My credit utilization percentage went down a bit so my score went up!
I paid off the largest amount of debt yet
Almost $900 toward debt! Of course I have an additional payment now due to my car but it’s awesome to see. I’m expecting to pay maybe $1000-$1300 to my debt in August which would be awesome.
My debt didn’t increase at all
I’ve mentioned this before but I actually use my Bank of America credit card for many purchases (always gas and groceries, plus big purchases). However, I always pay it all off nearly right away to ensure I won’t be charged interest. I get the cash rewards though!
THE BAD NEWS
I spent a lot of money
For the last couple of months I have been wanting to redecorate my room, so I finally did it. I basically completed it all in July though so I won’t be spending a lot the following months on unnecessary items.
Highlighted fields are spending areas I can/should improve in!
Savings: I’m not including this in my “spending” total because it’s not actually spending. My income is not taxed, therefore I transfer $1550 from each paycheck every month into my savings. For months I was using the app Qapital which I think is great. However, in July I wanted to take it up a notch and start using the app Acorns. Acorns invests your money in stock for you which I think is so cool. I’ll probably eventually write up a whole blog post about my experience, but definitely check it out and learn more about it. If you use my link to sign up you’ll actually get $5 invested for free!
Rent/Utilities: I live with my sister (and her boyfriend) so $600 goes toward the mortgage, electricity, internet, etc. $100 goes toward the money I owe her!
Food: I did better than last month (about $57 less) and I don’t think the amount is too bad, but I CAN DO BETTER! If I can lower my grocery/food budget to $200 then I can put another $100 toward debt. Going out to eat is not really my problem, I spent maybe $25 on eating out in July. Also, sometimes when I grocery shop my trip will include things besides food (deodorant, toothpaste, I bought a plant, etc.) so that’s one thing.
Gas: I drive 22 miles to and from work Monday-Friday so I have to get gas every weekend. $118-$130 is expected for gas each month. This month was a little higher because July had 5 weekends. I get gas every weekend.
Health: This includes my multivitamins, my gym membership (and annual gym fees this time), as well as my weekly meditation membership which I consider a part of my health/wellbeing.
Car: My minimum payment for my 2015 Toyota Camry.
Credit Card Debt: Self-explanatory. I actually paid a lot toward my Bank of America cc, but because I was also charging on it the total only went down a couple hundred rather than a full $600.
Student Loan Debt: I pay $288.37 every month. Once I pay off my credit cards I will throw extra to my student loans!
Insurance: This includes vision, dental, and life insurance. I have health insurance through work on top of my salary which is really nice.
Business: This literally includes just paying for hosting/my domain for this blog and G Suite (by Google), which is $7.99 and $5 each month. I forgot the $5 in last months total.
Other: This category basically includes unnecessary spending. Like I said, this month was A LOT. Mostly all of it was for redecorating my room, new skincare products (which I’m actually returning for a full refund!), a donation, Google Play, uhhh I may have bought $50 worth of edible cookie dough…
I can’t even consider that last one food, but really though August is going to be SO much lower just watch!
So NOT including my savings I spent a total of $3,572.74 without increasing my debt, but not necessarily helping it much either.
My goals from last month were to spend less on food (check) and make more extra income (check)!!
My goals for August are to again spend less on food (I’m gonna aim for under $250), increase my extra income, and of course spend WAY less on unnecessary items. Dave Ramsey would yell at me by now but I’m honestly so excited to continue this journey!!