$4,336 Debt Destroyed! Financial Review – July, 2017
Welcome to the sixth installment of our Monthly Financial Review. I check in to update our financial position at the end of each month. The goal is to show our progress in real-time as we pay down our debt and live on a budget. This report will serve as a great record to look back on as we perfect our budget and learn what works. We had another solid budget month in July, and we are definitely starting to taste the victory of accomplishing our first big goal!
So, where were we? If you take a look at our position as of 6/30/17, you’ll see that we had a total of $80,196.16 in debt. Coming off a crazy month in June where we paid off over $11,000 in debt, we were definitely looking to continue our momentum and push closer to our goal of eliminating our credit card and car debts. Over the past few months, we have been working hard to increase our income from side-hustles and cutting spending wherever possible. We’re focused on wiping out our credit card debt and remaining car loan in August. We pay off as much as we can afford with each paycheck, before we have a chance to spend any of it.
How we reduced our debt by $4,336.79 in July!
We had a big cash infusion in June that boosted our debt payoff, but we also squeezed every extra cent out of savings and sacrificed as much as we could. As we started July, we were both feeling broke, tired, and even a bit discouraged. You can see this in our overall July performance; we were not as budget-minded as we had been the month before. But the biggest factor in our debt repayment comes from sticking to the plan. Through this dedicated effort, we still managed to increase our net worth by over $5,500 in July.
July was not our best month for budget compliance! Our base budget leaves us about $4,500 to put towards debt, but in July we were only able to pay off $4,300. This was largely due to overspending on things like eating out and entertainment. We also worked less at our various side hustles, after earning over $500 the previous month. The rough month was a reminder that we need to balance enjoying life within our debt payoff plan. It was also huge to see that an extra $200 in spending improves our happiness immensely and doesn’t make a material difference to our overall progress.
The end result of all this effort is that we were able to eliminate $4,336.79 in debt during July! This brings our debt total down to $75,859.37 as of 7/31/17. Our net worth increased by over $5,500 in July, which shows just how effectively we are using our income. Setting goals and having frequent check-ins has been the key to our continued progress.
2017 Goal Update
We began this journey in January, 2017 with over $107,000 in debt. The progress has been awesome and only fuels our fire to ultimately become debt free. Alyssa’s side-hustle of walking dogs and pet-sitting provides some extra cash to the budget. She is really focused on paying off debt and her car will be paid off by the end of August. I will be able to pay off my remaining credit card balance in August as well. We’re already working on ideas for a milestone celebration after paying off the first $33k within 8 months!
As we shared in Our Road Map post, the next step will be to build up savings to prepare for buying our first house (a multi-unit rental property) in 2018. We hope to accumulate at least $20,000 by the end of 2017, and it will be a challenge to stay disciplined seeing that cash in the bank. We are very excited to approach our first real estate investment and get one step closer to the ultimate goal of retirement.
As I shared previously, our base budget gives us close to $5,000 extra every month to put towards our goals We will continue to CRUSH IT in the coming months and share our progress along the way!
What’s the next goal you’re hoping to achieve in the year?