Credit score, monthly progress update, budgeting fun

826

That was my credit score when we went to get my new car. We knew that around 700s were good credit scores. We were both shocked by how high my credit score was though, considering how much debt I still have with school loans. The dealer said usually only 80 year old women have a credit score that high. Who knows! We definitely didn't complain though because that allowed us to get a lower interest rate to finance my new car. 

About the new car- I was not excited to have to get a new car:( I loved my Honda that I've had since high school (and I LOVED not having a car payment!!). The rule of thumb for us though is that when the repairs on a car start to cost more than the car is worth, it's time for a new car. We haven't had a car payment but since we have been working hard on paying down debt and lowering our monthly debt amount, a car payment is affordable. We decided to finance the car over the longest amount possible (six years) so that the monthly payment amount was lower. As with everything else, we will pay the car off early and therefore the six year term really won't matter. We do it this way so that if there is a month where we have unexpected costs come up, we can still manage to pay everything that we owe. We also inquired about the difference in cost over the life of the car if we took the full six years to pay it off. Because our interest rate was so low, it would only add about $1,000 to the cost of the car. Obviously we don't want to pay more than we have to but in the grand scheme of things on a high ticket item, $1,000 isn't too bad. 

Onto our debt progress.

Things haven't moved quiet as quickly as I would have hoped. We have been super busy lately with work and studying for my LPC test so I haven't been able to post for a while.  We are currently at

$64,492

for my school loan total. We paid off our largest loan last month (yay!!). That won't actually drop our monthly payment at all because since we had paid such a large sum on that loan initially, we had no payment due until 2017 (another trick from the company to let interest build up). All of our other loans do have monthly payment amounts so from here on out, each loan we pay off will save us a little bit each month on our monthly amount due. I have 12 loans left to pay off!  That number can be deceiving! Some of those loans are $2,000 or less which will get paid off quickly, but still others are about $12,000 and will take much longer to pay off. We are still on this journey in hopes of being debt free in the three year time frame. I'm not sure how that will work out but we are trying! Things always come up! Doctor bills, car payments, LPC test (which cost almost $400 for the study material and the test itself- CRAZINESS!!). We try our best to stay on track. For us, summer will likely mean not having as much money left to go towards loans because of the different trips we are going on. I feel like that is okay because we work really hard on putting almost half of our money to debt and therefore taking a little bit of extra money to do things in the summer is not a big deal. I guess we have 32 months to go which would mean about $2,015 a month from here on out. Once our monthly payments drop by paying off individual loans, that total per month should also decrease. 

How are you guys doing on your budget tools? Has it made any difference yet?

On a different note, I passed my LPC exam! Once my license comes in the mail, I will officially be a Licensed Professional Counselor in Virginia. Woohoo! Hopefully many doors will open that will help to pay that debt off in the time frame we are going for:)

Upromise

This post is mostly for those who have school loans. If you've never heard of Upromise, you should sign up now! Upromise is a website that can link directly to your school loans. If you shop a lot online, a percentage of every purchase you make could be applied directly to your school loans for no extra charge. If you don't have school loans but know someone who does, you can also register as a "friend or family" to link up to another person's school loans. This is how it works:

• After you've set up an account and added whatever credit/debit cards you usually shop with, go to www.upromise.com
• Log in
• Search for the store where you are going to place an online order (there is a search bar at the top of the page)
• Upromise will then search for the store and show you what percentage you would get for making your online purchase (i.e. Vera Bradley is 5%)
• ***Click on the store website through your upromise webpage*** You only get credit for the purchases made directly through the site
• Shop for whatever you were already going to buy, check out like normal, and earn extra money!!

Within a few days, your money will be 'funded' to your account. You can track all of your purchases through the account information. I think in the few years that we've been doing upromise, we have funded almost $200.00 to loans. That isn't a huge amount compared to what we owe; however, we would have been making the online purchase anyway so we figured we should go ahead and get credit for it.

The biggest thing to remember is that you have to go through your upromise account before you go to the store website. I have forgotten that so many times and have lost out on money. I use upromise the most when I am booking a flight or hotel, buying a gift card, or shopping for random items. Amazon doesn't have a upromise percentage yet but Upromise does have HUNDREDS of stores available. You can look at the full list of store here.

Another perk to having Upromise is that you can earn money for groceries. You can plug in your various grocery savings cards (i.e. Food Lion MVP) and each time you use your card, you get a few pennies added to your account. When you want to cash in your money, you can either send it directly to your loans or request the money to come to you in a check.

We are all about finding more ways to pay down our debt. If you have school loans and you don't have upromise, sign up today! If you don't have school loans but want to help out, you can become my 'friend and family.' :) Happy Savings!

Goal update- 1 month down, 35 months to go!

In our first month of the three year challenge to be debt-free, we went from $68,303 to now $66,674!!  

The interest is so frustrating because we make a big payment but it doesn't look like it was as big because the interest grows daily! Now we have 35 months to go...and at this rate, we need to pay $1904.00 a month to meet our goal:) In a couple more months, we will have one large loan paid off and from then on, our monthly payment will be reduced with each loan we pay off, making that $1900 shrink and shrink (hopefully!!). I'm excited! Does anyone else get this excited about paying off debt? I'd like to know your plan to pay down debt!

Budget spreadsheet: A How-To

Let me start by saying that I am in no way taking credit for this spreadsheet! Luther came up with it a few years ago and I had no idea how he did it! I never was any good with Excel. Now that it is set up, all I have to do is enter the numbers! The way our spreadsheet works may not work for you and your family; however, I've had several questions on how to do the spreadsheet so here's my post:) I hope this post isn't too confusing but it is hard to describe the steps to take to make our spreadsheet. Here goes nothing!

As I mentioned in a previous post, we have our budget divided into categories. The first step to creating the budget spreadsheet is to divide your columns into your money categories. For example, our "A" and "B" column are both designated for food, "C" and "D" are both designated for gas. We use two columns for each section. The first column for each money category is for the name of the store or for what you purchased (i.e. Walmart, Wendys, Food Lion) and the second column is for the amount spent. We use all the columns through 'V' for our actual budget categories.

After we made our categories for all of our budget sections, we then made a column listing each section. The column directly beside our total budget column is the column where you input the formula.

After you set up the formula, every time you enter an amount into the appropriate column, it should automatically do the math for you in your 'totals' column. The number that is shown would reflect what you have left out of the money you budgeted for that category.

Making the formula:

Decide what you are budgeting for each money section. We budget $200 for gas each money. Our gas formula would then be:

=200-SUM(D2:D50)

After the =, put the total you are budgeting. That number minus the SUM of the cells D2-D50. We never use through the 50th cell in each column but we put that number in just in case.

Our "Transfer to Savings" section is just for us to know how much we were over or under for the entire month, in all categories combined. This shows us what we have to put into savings. If you want a similar column, the formula will be:

=TOTAL AMOUNT BUDGETED+SUM(Y2:Y12)

Your totals and columns will obviously vary from ours but this is how we track our monthly spending. Hopefully you will be able to apply this information towards your spreadsheets in a way that makes sense for you and your families.

Good luck and Happy Savings!

February Challenge--We did it!!

We did it! We didn't eat out during the month of February. It actually wasn't as hard as I thought it would be. We made several meals that had enough for leftovers, usually enough for a couple of lunches and an extra dinner. We also made a calendar of what we would eat each week which helped us to stay focused and to plan ahead.

We were UNDER budget by $82.00!! This is pretty big for us! Sadly, we are usually way over budget. In the last twelve months, we were under budget ONE time (and by $1.88 at that)! We have been OVER budget anywhere from $35.00 to $170.00!! That is crazy. We never really cared too much because we 'had the money'...that money was just designated for paying down debt and not for paying for food!

We are planning to eat out again in March...I need those rolls and cinnamon butter at Texas Roadhouse! I think our goal in March is to be able to eat out without going over budget. We also have our vacation planned for March and I know we will be eating out then. Our vacation times don't count because that money comes from our vacation fund, not our food budget. Stay tuned...

Ahhhhh...saving money is fun! Paying down debt is even better! Happy Savings!

Our lofty goal...

We just logged on to see our total school loan amount that is left after making a payment from our tax return. The total is (drum roll please)......

$68, 303!

Don't get me wrong- that is a LOT of money...but compared to starting at $120,000, it's not so bad.

Our goal (well actually Luther's goal) is to get this all paid off in three more years. Taking that amount and dividing it by 36 months comes out to about $1900 per month (totally unrealistic for us)! However, we have a spreadsheet (imagine that) that shows each loan individually so that we know how much we need to pay off each loan. Luther even numbered the order in which we will pay them. We have $3200 left on a loan that started off MUCH higher and then we will move on to paying off our other loans. We have 13 left altogether. Wish us luck and say a prayer:)

Creating a budget...where to start

I've had a few questions on where to start when making a budget. I'll be honest, figuring out what each amount needs to be in your budget is the hardest part. It takes lots of trial and error on paper before you can make one that works. Once you get that figured out, you will be smooth sailing:)

I'll try to make this as simple as possible...this is how we started:

Start with how much money you will bring home in a month (this is a little more difficult if that figure is flexible). Let's say you bring home $2000 a month or $1000 bi-monthly. As I mentioned in a previous post, we take out our tithe money before we do anything else. If you brought home $2000 a month, we will pretend that you actually make $2400 a month and therefore if you tithe, it would be around $240 a month. That comes out of the $2000 take home pay.

$2000 monthly income

-240 Tithe

$1760

Now make a list of all of the amounts that you HAVE to pay each month that do not change. For us, those amounts include:

Mortgage/Rent

Car insurance** (Some people pay this monthly and others annually or every six months. If you do not pay this monthly, you should still put the money back each month so that you have it when it comes due)

Cable 

Phone

I'll assign a guess on those totals to make the point.

$1760 remaining

-700 rent

- 80 car insurance

-50 cable

-100 phone

$830

Now make a list of other necessary expenses that might fluctuate:

Gas

Utilities (heating/cooling and water)** (We usually see a drastic difference in this between the winter months and the summer months)

Miscellaneous (things that don't fit anywhere else such as paper towels, cleaning products, etc.)

$830

-150 gas

-150 utilities

-75 miscellaneous

$455

Food- we budget $300 a month for food (including eating out) for the two of us. You would need to adjust this based on how large your family is. 

$455

- 300 food

$155

Now make a category for things you may need once in a while, but not every month:

Doctor/Dentist- $20

Gifts- $20

Blow money- $30 (only if you have everything else covered)

$155

-20 doctor/dentist

-20 gifts

-30 blow money

$85

With the remaining $85, you should designate this to areas that you need. If you have a credit card, make payments on that (disclaimer- if you have a large credit card amount, you should probably use most of your blow money on that each month). If you can ever make more than the minimum payment on debt, make sure you designate any extra to 'principal only.' Otherwise the interest gets the majority of your extra payment. Once you've paid something off with that $85, you should then apply that amount to some other form of debt, such as a car or a loan of some kind.

It's hard to make a fake budget without knowing what you make a month, what all you HAVE to pay (and the amounts), and how many are in your family but I tried to give you a rough idea. More to come on the actual spreadsheet. It involves formulas that you can plug in but I need to look at how we did that since it has been so long ago. The concept is basically starting with a figure in each category and then having the computer subtract for you each amount that you spent. There are also free budgeting tools online that you could use if they fit your needs. As always, let me know if you have questions:)