Wow! I can’t believe it’s been so long since I’ve given you an update on what’s happening with our debt payoff! I promise I have a really good reason…we are expecting Baby #4! I am now in my second trimester and feeling much better so I will be back to posting regularly on Tuesdays and Fridays.
Baby Plans during debt snowball
Dave Ramsey recommends that as soon as you find out you are pregnant, to push pause on your debt snowball. This means not paying anything extra on your loans but saving all your extra cash (while still continuing to be gazelle intense). Once the baby is born and mom and baby are home from the hospital, press ‘play’ and dump all of the money towards your debt. In theory (and maybe for others) this works just fine. Essentially except for the interest you should essentially be paying the same.
However, when we followed his recommendations during our last pregnancy while on the debt snowball we lost our intensity and focus. This time we have decided on a ‘modified pause’ on our debt snowball.
Goal #1 – Save $5,500 for the actual cost of the birth. (This was completed by June 1, 2017)
We know that this is an accurate cost for us because we are having an at home water birth. $4,500 for the prenatal/delivery, ~$500 for extra lab work and ultrasound, ~$500 for miscellaneous birthing supplies including a tub, etc.
Goal #2 – Save $11,000 for our family maximum out of pocket.
This is our modification to Dave Ramsey’s plan that we feel will work best for our family. It is still safeguarding us by having a pile of cash in case of an emergency with the birth, but allows us to return to our debt snowball and maintain focus.
Goal #3 – Pay off the $7,500 loan for our sewer pipe work that you’ll read about below.
Goal #4 – Pay off the $10,000 student loan that is next in our debt payoff snowball.
Goal #5 – Continue paying off rest of debt snowball.
Once the baby is born and there are no emergencies, we will be able to throw the $11,000 we saved for our family maximum out of pocket at the debt. Throwing huge chunks of money like this is a huge motivation!
In March 2017, we paid off a total of $6,203.
At the end of March 2017 our total debt remaining was $95,627.
March was a really interesting month for us full of ups and downs. We were so elated that we finally hit below 100K! On March 16, we were able to pay off $1,843 which put us below 100K. We celebrated with a ‘100’ party! We wrote 100 all over balloons, and made 100 decorations and ordered our favorite Chinese food and made ice cream sundaes! We played fun music and danced together and had a blast! While we had tossed around the idea of a small $1,000 vacation to celebrate we are so glad that we kept it low cost and continued momentum.
A week later on March 22nd after water backed up into our bathroom we found out that our entire sewer pipe was cracked every few feet going all the way to the street and we had to have it replaced.
This was going to cost $10,000! We had to pay a $2,500 down payment immediately. If you want to know more about how we dealt with this financial setback and others, like a job loss, along our debt journey read this.
In April 2017, we paid off a total of $732.
At the end of April 2017 our total debt remaining was $102,395.
We also put a total of $1,900 towards our baby fund.
Mid April we had the work done and it was certainly a large undertaking – our whole front yard looked like a war zone! There was no way we would be able to cash flow such a large emergency so quickly so we had to take out a loan for the remaining $7,500. Thankfully we have a 0% loan for 18 months and we will pay it off well before then.
In May 2017, we paid off a total of $732.
At the end of May 2017 our total debt remaining was $101,663.
We also put a total of $3,600 towards our baby fund which finished our baby fund of $5,500.
At the end of April we received a notice that we had to have our front lawn that currently was a huge mess looking back to ‘lawn quality’ within a few weeks or face a fine. We did all of the work of releveling, planting, grass seeding, etc. ourselves with the amazing help of my family. While we didn’t have labor costs we did spend about $500 in expenses.
In May we had an extra expense of $110 for our homeschool convention in June. Also by May most of my morning sickness nausea had subsided and my cravings increased. Which yes, means our food budget has increased. The way we’ve tried to allow for pregnancy cravings while still keeping our budget in control is
1) Increasing our grocery budget because I need to eat more red meat (I’ve been anemic so far thus pregnancy),
2) Including a restaurant line item so that when I have a craving for Mexican food, I know it’s already budgeted for, and
3) Having a special line item strictly for pregnancy food so that my pickles and cottage cheese don’t have to fit into our normal grocery budget.
In June 2017, we paid off a total of $732.
At the end of June 2017 our total debt remaining was $100,931.
We also put a total of $3,000 towards Goal #2 – funding our $11,000 maximum out of pocket.
June was kind of an expensive month for us. We went over our original homeschool budget and spent about $300 instead of the budgeted $100. We also needed to convert part of our attic into an office for my husband since we turned his office back into a bedroom. We spent about $200 on all the necessary supplies and other organizing supplies to move rooms around.
While we started out the month strong with a detailed budget meeting to get us back on track, it was my husband’s busy time at work which meant we didn’t do as many budget check-ins as normal. This did impact us getting off budget and so we will be making more of an effort to get back on budget in July and coming months.
As you can tell it’s been quite a busy few months around our house with lots of changes to the budget! Budgeting and getting control of your finances is supposed to ebb and flow with your life! There will be months that you are very on top of your budget, and there may be times you fall off the bandwagon. Every month is a new chance to redo your budget and get back on track. Anyone out there who needs too get back on track for July and August? Tell me below what struggles you’ve been having with your budget lately and I’d love to help you!