In order to provide a foundation for my debt payoff, I am going to give a breakdown of my monthly income and expenses:
My total monthly income comes to about $4,365.00. This is a pretty consistent amount, mainly comprised of my main 9 to 5, but I also have a second job and some residual income.
I earn $10 to $35 a month by using Ebates. I try to remember to use Ebates for everything, and although I don’t always remember, lol, I do use it to buy household stuff monthly, like cleaners, paper goods, and detergent. And I have been trying to entice my teens to use Ebates for their back to school shopping whenever I can catch them.
I am also signed up with Roadie, an uber-type service where I pick up packages from local stores like Home Depot and nearby airports, and deliver to customers within a specified timeframe. I have been doing Roadie for about 3 months, and I have made about $90 so far. I estimate adding about $60 a month from this venture, and possibly more as time permits, and we get closer to the holidays.
My monthly expenses include:
Rent - $1560, Utilities - $190,
Car - $400, Car insr - $214,
Cell Phone - $150, Cable - $100,
Gas/Mtnce - $80,
Groceries - $350,Debt - $530,
Personal - $260, Misc - $200
This brings my monthly total to about $4,034.00
These numbers would suggest that I am easily able to pay an additional $330 a month to debt.
My “miscellaneous category includes a group purchase made with family members. I am responsible for $145 a month from August through December. I also give money to my teens throughout the months, as they ask for it. This isn’t every month, since they do work. But I will encourage them to focus more on studying during exam times, and reduce working hours, so this could become a more consistent category during the school year.
My “personal” category includes $100 - $140 a month for the hair salon. I have been going to the salon regularly for the past two years. I started going out of necessity, to help repair my damaged hair. Trips the first year included medication, which has been successful and things are back to normal. Now the monthly trips to the salon help me save time daily, because I sometimes work 16-18 hours a day.
I did mention savings a couple weeks ago. I currently have $1400 in savings, with a goal of saving $5000 before devoting everything extra to my debt. I have since decreased that goal to $2500. I believe that amount would be sufficient for right now, as it would cover car maintenance and insurance deductibles. Plus, I have a health savings account with $900 for medical copays and prescriptions.
To be quite honest, even though this breakdown shows such a large balance left over monthly, I have not seen this surplus in each month in 2019. These numbers suggest that without doing any trimming to my budget, I should be able to pay $4000 to my debt annually. If I had been doing that, I would have been able to just about pay off my personal loan in this year alone.
So what have I learned from all of this?
I am excited to learn that I should be able to pay off my personal loan and credit card in less than 2 years, without a struggle. And if I challenge myself to stick to a budget and increase my monthly income with the resources I already have, I could probably reduce that timeframe to just 12 months.
As we wrap up the summer (I can’t believe we are already on the second half of the year), I will be smoothing out my budget and plugging the leaks to ensure that I meet that 2 year goal. I have not yet chosen a specific debt repayment plan, nor have I adopted any strategies geared toward increasing income. I will address each of those areas in the coming months.
So, in what ways could I trim my budget to put more money toward debt? What do you think would be the best way to kick start our goals?