Back on that DEBT FREE wagon!

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!

I’ll be your debt free cheerleader

In exchange for your email, you’ll be entered to win a hardcopy of Dave Ramsey’s

TOTAL MONEY MAKEOVER! 

Thank you for subscribing!

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!

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5 thoughts on “Back on that DEBT FREE wagon!

  1. Elle says:

    You’re put a TON of $ toward paying down debt. Please please please do not be embarrassed about considering all of that as success. Every penny of that has led you to that actual reduction of over $19k!!!! The $ you actually pay out is the $ you bring home and it is important to know where it went/goes.

    Congrats on your new budget. I have no doubt you will hit all of your targets πŸ₯°πŸ₯°πŸ₯°

    I appreciate your integrity in sharing financials. I’ll share a quick story of our journey:

    Married 1980. Got all financial advice from my in-laws (our first mistake). They appeared to be living the life we wanted so we were sold. What we didn’t know? They owned nothing-every thing was leveraged.

    Advance to 1987: We owned a home mortgage, we owned 2 vehicle payments (5y each), we owned nearly $20,000 in credit card debt. We bought anything we wanted, went out to eat anytime we wanted. The tax laws changed and none of the interest except mortgage interest was tax deductible. Oh, and we were both in college (me beginning my ASN to BSN program and hubster his IT Bachelor’s Degree.

    Enter: the brink of bankruptcy. Which totally pissed me off! I was too stubborn to go there. For the next 5 years, we went nowhere except camping (in our $100 1960 tent trailer), bought nothing unless it was critical to remaining clothed and fueled to leave the house, ate a lot of bologna, tuna and blue box Mac n’ Cheese.

    Every penny went to debt reduction. This was the old days of a 10.25% mortgage being a fantastic deal, cars at 10%, credit cards at 17-19%. We were paying a boatload of interest. Hubster told me to just do it and give him any $ he could spend-he was hands off.

    1991: Sold our first home, used proceeds to make sm down payment on this home (yes, we are here forever), and paid off all credit cards and consolidation loans.

    1992: I graduated with my BSN-no outstanding loans.

    1993: Hubster graduated with his degree-no outstanding loans.

    2003: Purchased a dumpy mountain cabin. Have done all the work ourselves $100 cash at a time. We just finished the entire property June 2020.

    1/25/2011: Both mortgages all paid off. DEBT FREE! Age: 49.

    Meanwhile we’ve been investing in our retirement since our late 20s.

    It was a very painful way to begin a marriage and the first 12 years were filled with angst, tears and sad/mad days.

    I would say we’ve had maybe 4 disagreements since 1990. When you’re on the same path and come together in wanting the same life, life is joyful and discussions and planning the future are robust and FUN!

    I drove the same car for 17 years (saving that car payment amount the entire time). When I wanted a new one in 2015, I wrote a check. I cannot describe what a proud moment that was for me. I love my car!

    Don’t worry about the Jones (or the fancy new huge “open concept” homes (with a huge mortgage). Don’t worry about all the new cars in the parking lot at work. I cannot tell you how often I was chided for not building a new house, for not getting mani/pedicures, for driving an old car, for packing my own lunch for 98% of my working life. My response was always “I don’t need that”. Their response “but we know you can afford it”. Well, I retired at age 58 drawing an allowance from my savings/Roth, they all worked until 67 or plan to work to 67 at the minimum.

    I wish we had the 50s/60s culture of celebrating with mortgage burning parties. We did it quietly. Why? People thought we made far more $ than we really did (including my RN sister staff nurse who assumed I as Director made double what she did in a different state. She was shocked to learn I made less than her).

    We live in a wonderful neighborhood. We are among several retired “millionaires next door” couples near our age who have lived life the way we do. We have young families, babies, toddlers, grade school kids so it’s an active neighborhood. We have several homes of older folks 75-85y who continue to stroll the sidewalks. We have the intention of aging in place and will sell the cabin should we ever require in-home care.

    Taking your lead, I share all this so that you and others know, this is not an easy journey. This is not a FUN journey. But oh my, the rewards are so very joyful and the rest of life is so much more fun and relaxed because $ becomes a NON-issue in life. We are in mindful spending mode. We evaluate every item we think we want. We pay cash and buy quality items with a long life. We use things up. If we are done with it and it has life left, it goes to the thrift store.

    Well this got very long. If you have read this far, I know you’re serious about living a debt-free life. Take what is useful and ignore the rest. Our process may not be right for you.

    Take charge! Design your life! πŸ₯°πŸ₯°πŸ₯°

    PS: we were pre-Dave Ramsey. Your Money or Your Life was our guide in the early 90s to guide our principles of spending of the rest of our lives!

  2. Kathleen S says:

    You did not mislead. When you knew more, you corrected things. Happens all the time with financial things. I’m a CPA and even I have to do restatements. Forgive yourself.

    Additionally, even if it seems like less has been paid off, where would you be without this focus? Not as far. Cheer and celebrate what you have done – it’s still better than not focusing on it.

    I focused on it last year and needed a new furnace / A/C. Hey it was 95 out in central IL. I was able to write a check. It was wonderful.

  3. Celesta says:

    Don’t beat yourself up Kalissa, you’re making progress, even if it wasn’t as much as you thought to start off with. You could have kept on going instead of turning it around and be in debt what you paid off plus more. You go girl, you’re going in the right direction and that’s what counts!

  4. Susan the Farm Quilter says:

    The difference between what you have paid out of pocket compared to the debt you have paid down is a huge wake up call as to the huge bite INTEREST takes out of your wallet when you are paying it!! Almost $11,000 is a HUGE number!!! THAT is the lesson to be learned here!! Good for you for getting back on the FREE FROM DEBT train!!! Hard to discipline yourself at first and having those “things you want” written down as your carrot will definitely help!

  5. Barbara Snyder says:

    Been there, done that! Keep-a-goin’! It’s so worth it! And start saving for college. That’s where we got in trouble.

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