If you’ve been a long time reader, you know my husband and I are on a debt free journey. We first started out in April 2019 – you can read about that story here: We Couldn’t Afford Cafeteria Food.
I’ll be honest, after our last update recently, 2 HUGE FINANCIAL STEPS FORWARD!!, I realized we’ve been calculating our debt pay off incorrectly so I’ve gotta come clean here: I have unintentionally miscalculated how much debt we’ve paid off. I had recently touted that we put $30,000+ towards debt in our first year on our debt free journey and most recently that we had put $24,000 in our second year towards debt. The correct terminology is “put towards.”
This includes interest, this includes our minimum payments. This is all of our money that we have PUT TOWARDS debt. This does NOT mean that we have taken $30,000 off of the debt we owe. Our TRUE calculation of how much debt we have PAID OFF and no longer owe, as of today is $19,712.86. I had mentioned in the last blog post, I wasn’t sure exactly how the debt is calculated when doing the baby steps as defined by Ramsey Solutions. A blog reader kindly commented and explained how it worked and I was so embarrassed to learn I’ve been misleading you all.
To be clear: I’ve been updating you on the total dollars put towards debt (monthly payments, interest etc.) which I have been calculating correctly and the numbers for how much we’ve put towards our debt has been accurate but it is not our payoff total.
We have COMPLETELY paid off close to $20,000 over two years. Which honestly, doesn’t feel like much, especially when I was under the illusion we were doing SO WELL!
I’ve told you how much I love the Ramsey’s budgeting app – EveryDollar – and they also have a new form called “The Baby Steps” which is super fun and helps me calculate our debt free date/payoff/strategy and just for proof, so we are all on the same page, AND to show off the app, here are a few screen shots of our progress!
“Kalissa, why are you showing people how much money you owe?”
NORMALIZE TALKING ABOUT MONEY! NORMALIZE TALKING ABOUT FINANCIAL HEALTH! ENCOURAGE FINANCIAL LITERACY!
I don’t want people to make the same mistakes we did. I want people to see the consequences of our actions. I want people to understand they aren’t alone. I want people to know they can take over their finances. I don’t want people to be afraid to check their bank accounts. I want people to be making money moves! I just want to be your biggest debt free cheerleader!
How are we getting back on track?
FOLLOWING the budget. The budget has been pretty fluid this past year. We’ve been extravagant, we’ve convinced ourselves we’ve “earned it” or “deserve” treats or splurges. I’ve got the budget down to the CENT all the way through June which INCLUDES cash flowing a new furnace (almost $4,000), cash flowing gutter repairs (almost $700) an unexpected tax bill (almost $2,500) and various other large expenses. We had a bit of a wake up call when all of these large bills came – I want to be in a place where I’ve got the cash in our emergency fund to reach over and cover it no problem – we can’t do that if we are still in debt.
I’ve also been picking up extra hours at work and hitting my Etsy shop side hustle HARD! More updates on that coming later this week! I also have a list, when I want something (like eyelash extensions, hair extensions, landscaping, a vacation, a remodel etc.) I add it to a list for when we are debt free – I can do all of those things whenever I want – when we are debt free! It’s more motivating to see it on paper than to long for it and resent our debt free journey in the mean time. It isn’t a NEVER it is a NOT RIGHT NOW!
And also, when you fall down, get back up again. I talk about this in my post: Flex Your Comeback Muscle!
NOW TIME FOR A GIVEAWAY!
I’ve ordered 10 of Dave Ramsey’s books – The Total Money Makeover! They came in today and I’m so excited to give them away! I’ve given away probably 30 or so of these books already but this book TOTALLY changed my life and I want to be that first step in other people’s debt free journey! Fill out the form below, drop your email, and I will be drawing and shipping these books out next week! I have done this giveaway last April too – April is financial literacy month and our two year Dave Anniversary!
In conclusion, I sincerely apologize for misleading you about how far we are in our debt free journey. I know many of you are on financial journeys of your own and that last thing I want to do is be untruthful about ours. It was an honest mistake and misunderstanding of how to calculate our payoff. I hope you’ll accept my apology and thank you to those who commented and kindly pointed out my mistake in my last blog post.
Thanks for reading friends, I hope you have an awesome day!