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New year, new jobs, new house… guess that means new tricks and styles for budgeting in 2020?! I’m always working on tweaking and messing with your budget, I can’t help it. Also, we seem to have constantly changing lives and our money and money management flexes with that. So I did some review at the end of last year and decided to make some changes to the budget.
After breaking out into the consulting world last year my paychecks increased dramatically. An increase I thought would easily go straight to paying off debt, but womp womp, it wasn’t quite that easy.
I found that having more money hit our account was actually a little harder than I had thought. It was super easy to overspend and feel like there was a cushion sitting there to catch us. It’s hard to stay frugal when your paycheck is screaming, YOU DON’T HAVE TO LIVE LIKE THIS!
So I tried something new.
I added up all our fixed expenses for each month and then all our variable expenses. I took that monthly expense number and multiplied it by 12 to get an idea how much money we would need to meet expenses for the whole year.
After I had our expenses calculated I made a rough estimate of how much income we would bring in for the year. I then subtracted the expenses from the net income to get an idea of how much we would have left over. Right now we sit right at about $65,000 left over in our budget. Mind blowing considering that at the beginning of 2019 I was terrified of my goal to pay off an $11,000 Lending Club loan.
Clearly the $65,000 falls short of goal number 1’s $80k price tag but I know we will find a way to make it work.
So, knowing that we should have at minimum $5k left over each month just to put towards debt made me start thinking of a way I could make sure it didn’t “accidentally” get spent. Here’s the thing about us and paydays, we love them! So when Thursday rolls around and that direct deposit hits I want to Scrooge McDuck into our checking account. Even if we don’t intend to spend outside of our budget it was starting to happen more frequently and it felt like we were on a slippery slope.
To try and stop my spendy urges, I changed my direct deposit numbers. I set the amount that hits our main checking to the same amount I used to make before I was a consultant. The rest is sent to a savings account where I hide the balance from myself unless I specifically log into it. It doesn’t pop up in my Mint app and it doesn’t show in my banking account app. To our brains it’s as if it doesn’t even exist.
After I pay all the bills from our regular checking I hop over to that special savings account and check the balance. Then I go straight to my student loan website and put the total from that account directly onto my student loan balance. I don’t let the money linger, I get the transaction moving as fast as I can so there’s no turning back.
Then I sit back and cry a little inside because I just put the equivalent of a new outdoor patio set straight onto student loans. So sad.
Honestly, the sadness only lasts for a minute because subtracting that new debt payment number from our total is the best feeling in the world. Guys, we started this year with just over $100k in debt and we’re already down almost $10k. My heart is doing cartwheels and with each payment the joy spreads!
We can do the hard things, guys. I can do them, you can do them, yes even you in the back row! We got this!
So… in conclusion, keep knocking the debt out, keep rocking life out, keep reading and please oh please SHARE this with a friend!