The state of our debt – April 2017

This post wasn’t easy to write.

In fact, I’ve been dreading it for months.

But in my recent declaration of becoming debt free by 30, I promised to document our journey to becoming debt free on this blog – including the ugly numbers.

So, here we go…

The state of our debt – April 2017 – $51,605.19

As of April 1, 2017, we are $51,605.19 in debt. And that ain’t no April Fools joke.

Alright, alright – let me have it! I can already hear the groans, the disappointment, the eye rolls all the way from here! I know, our debt is unbelievable to me, especially because I can read back to a previous post on this blog where I’m literally describing how close I am to debt-freedom. *sigh*

Life moves fast, y’all.

The state of our debt – April 2017 breakdown

Let’s get into what kind of debt we’re in. Here’s our breakdown:

State of our debt - April 2017

Per the chart above, our debt breakdown as of April 1, 2017 is as follows:

  • Credit cards – $21,055.37
  • Student loans – $23,316.26
  • Car loan – $7,233.56

The state of our debt – April 2017 updates and notes

  • Even though all of our non-mortgage debt fits into three categories, it is made up of fifteen different loans (see below).
  • We have decided to tackle our debt using the debt avalanche method. This means we’re paying the minimum payment on all of our debt and any overage is going to the debt with the highest interest rate. The order of the payoff of these 15 loans is as follows: State of our debt April 2017
  • I mentioned in my first post of debt free by 30 that we can only afford the minimum payments on our debt. Well, this month, we’re vowing on throwing an extra $200 to Credit Card #1. It’s not as big of a dent as I’d like, but it’s a start. Hopefully next month we can pay off Credit Card #2 completely.

*Deep breath* Alright. There it is – all of our debt in its ugly, all-consuming entirety. The first step is acceptance and knowing your numbers. Well, $51,605.19 is our number.

We’ve got a lot of work to do.

AMDG,
Lisa

Debt free by 30 – our new goal

Today is my 28th birthday and today I’m calling it – I will be debt free by 30!

Debt free by 30 – our new goal

I think Juan and I are finally ready to start fully attacking our debt. Debt free by 30 is our mantra for the next 2 years and I’m committing to blogging all about it!

Debt free by 30 means getting rid of all of our non-mortgage debt by the time my 30th birthday rolls around. This also means staying out of debt once and for all!

I’ve been MIA on this blog mainly because we have been moving, travelling, and getting over sickness. But all throughout these past few months, Juan and I have been talking and talking about how we’re sick and tired of sending our hard-earned money to someone else. Well – now we’re sick and tired of talking about it! It’s time to finally do it!

Debt free by 30

Debt free by 30 – the why

Why is it so important for us to be debt free by 30? First of all, for me at least, our debt gives me anxiety. I worry about not being able to make the payments if one or both of us were to lose our jobs.

Secondly, there are so many things Juan and I would love to do (such as travel, invest more time in our hobbies, and saving more for our retirement), but instead of saving up for these things, we’re throwing money at our debt.

Overall, becoming debt free by 30 will allow us to say “yes” to more things we actually want to experience and “no” to things we are simply doing just to make our debt payments.

Debt free by 30 – the challenges

Debt free by 30 will be a huge challenge for us. First of all, we have a ton of debt! More on the actual numbers later. Secondly, we’ve got some other non-debt financial goals this year we want to crush.

Lastly, we only have enough room to pay the minimum on our non-mortgage debt. Paying the minimum on our debt will have us debt free in approximately 5 years – by then I’ll be 33 and although “debt free by 33” does roll off the tongue better, I still prefer to be debt free by 30. The sooner, the better!

Debt free by 30 – the how

Obviously, we won’t be debt free by 30 if we’re paying the minimum payments on our debt – that’s simply not going to cut it. So, first thing’s first – we’re going to commit to pay more than the minimum each month.

The second thing we are committing to is increasing our income. We are both your average 9-5ers with decent income for our location, but we need more if we want to truly be debt free by 30. So we’re going to commit to build a side hustle or two with the goal of the extra money going immediately to our debt.

Debt free by 30 – accountability

At work, we have these things called “BHAGs” which stands for Big Hairy Audacious Goals. That’s what becoming debt free by 30 is for us – it’s big, it’s hairy, and it’s incredibly audacious.

The only way we can conquer this BHAG is to continually track our progress these next couple of years. That’s where this blog will come in. I hope to update the blog with our debt progress monthly as well as any updates on our side income. I’m also hoping to post more vlog-style updates on the Lisa vs. the Loans Youtube channel.

Debt free by 30 – who’s with us?

I know we’re not alone. If you haven’t turned 30 yet and are sick and tired of your debt, feel free to join us! I want to hear all about your goals and would love it if we can all encourage each other in this effort.

Take the Debt Free by 30 pledge with me and don’t forget to follow me for updates on this BHAG of ours!

AMDG,
Lisa

Our 2017 financial goals

Our 2017 financial goals

Here our 2017 financial goals! I hope it’s not too late to share these 🙂

Sure, it’s a few weeks past New Years Day, but cut me some slack! We’ve been super busy over here because – surprise – we’re moving!

We’re just moving across the Bay so we can be much closer to work. Our commute times will be so much shorter and hopefully that means more time to spend with each other and on our passion projects *cough* this blog *cough*.

Anywho, enough about that. Here are our 2017 financial goals!

We're only focusing on four financial goals in 2017!

1. Move closer to work

Well, technically – we’ve already accomplished this! In fact, on the day that this post goes live, we will be moving all of our stuff in a U-haul van with some friends.

It did take some moving around of our money to pull off. But after almost a year of living more than an hour away from work, we decided it was worth it to move closer to work. Rent ain’t cheap – but we are at peace knowing that we’re paying for the convenience of living close to work. We’ll have a lot more time on our hands, and I think that alone is worth the money we will spend.

2. Replenish our starter emergency fund

We had to dip into our emergency fund recently to cover some family things. I feel so vulnerable not necessarily having anything right now in our emergency fund. But hopefully this will get done in the next paycheck or so. We just want to get our emergency fund back to $1,000.

3. Decrease our debt by 20%

We are in a ton of debt. Seriously. It’s not good. More on those numbers in a future post.

We know it’s not possible to pay it all off in one year. Especially since we’re paying to move much closer to work. But we do want to keep debt repayment a high priority for us. So as soon as our first two financial goals are taken care of, all of our extra money will be thrown at our debt. I assigned 20% as our 2017 goal. Hopefully it’ll be more than that, though!

4. Save for travel

This year is full of travel plans! Next month, we’re going to Rome to celebrate our anniversary. In July, we have 4 weddings to attend (maybe 5). We’re going to Hawaii in November for another wedding. These travel plans are so exciting! But if we don’t plan ahead, these travel plans can really reverse all the progress on the other three financial goals we have.

So, we are going to be putting money aside each money just for travel. I know that this money would probably do better if we targeted it all to debt, but I want to make sure that we spend only cash for all of these trips. What good is debt repayment if we have to finance our trips?

So there you have it – our 2017 financial goals. I’m keeping it simple this year. Four financial goals is totally doable. The less we have to focus on, the more damage we can do to each of our financial goals.

What are your financial goals this year?

AMDG,
Lisa

17 ways to improve your finances in 2017

17 ways to improve your finances in 2017

The new year usually sparks many of you to want to improve your finances. Now, I’m not usually one for New Year’s Resolutions. But I’m all for focusing on your financial health. If the New Year sparks that fire within you to get your finances together – then I’m all for it!

Here are 17 ways to improve your finances in 2017. Choose a few of these to focus on in the New Year if you’re new to personal finance. I don’t want you to be overwhelmed. But I do want you to make some real change in your life.

improve your finances

Overall financial health

1. Dream a little

This may seem like fluff advice, but I really believe that dreaming/envisioning the ultimate financial state can really get you revved up to actually improve your finances! So take a moment to really imagine what it would be like to live with no more debt. To finally turn in that last payment for your mortgage, car loan, student loan, etc. Imagining this huge weight coming off of your shoulders can help you get started on actually tackling your debt!

2. Know your numbers

To improve your finances, you need to know where you are currently. Make it a point to know and be more mindful of your monthly income and expenses. Your entire personal finance journey is built with these building blocks! Here’s a video I put together on how to get this information if you don’t already have it.

3. Track your net worth

This tip goes hand-in-hand with the previous tip of knowing your numbers. Knowing your numbers is one thing, but actually tracking your numbers each and every month is what helps you be more mindful of your situation. The key here is checking in on your finances every single month, whether it’s your net worth or your income/expenses. (I hope to do a post/video on what your net worth is soon).

4. Educate yourself about personal finance

I get it – the world of personal finance can be overwhelming. But running away from it is a surefire way to not get anywhere financially. Make it a point to read a book (I recommend The Total Money Makeover by Dave Ramsey or I Will Teach You to be Rich by Ramit Sethi) or listen to a podcast (I recommend The Dave Ramsay Show or Stacking Benjamins) about personal finance once a month or so. Believe me – avoiding personal finance will not solve your personal finance problems!

5. Focus on one or two financial goals

When you focus on way too many goals at once, you tend to lose track, get overwhelmed, and fail at most of them. Choose one or two goals to focus on this year. Will you work on increasing your income or decreasing your expenses? Is this the year you get serious about your debt or start saving for emergencies? Pick a goal that will improve your finances and get started! I personally suggest following Dave Ramsey‘s step by step goals if you don’t know where to start.

6. Get in sync with your significant other

This is something Juan and I are still working through. Actually, I think this is something that will just become a constant conversation. As your goals change, your spouse’s may change as well. As you improve your finances, make sure your partner is still on the same page as you. Make an effort to check in with each other each month to make sure you’re working towards both of your goals.

Increase your income

7. Start a side hustle

Your main income is great, but having a side income can really help with your financial goals! Don’t know where to start? Think of things you already love to do – crocheting, working on cars, spending time with pets… chances are someone has already come up with a way to monetize it! Think of how you can monetize one of your hobbies so your side hustle can also be something you enjoy doing!

8. Work towards a promotion

Nine times out of ten, a promotion leads to an increase in income. Make sure you are an absolute stellar employee – make it into work on time, finish your tasks in a timely manner, and make sure all the work you do is done with integrity. Then, when a spot above you has opened up, make it known to your manager that you are interested. Work hard and your work will speak for itself!

9. Work towards and negotiate a raise

Sometimes a promotion just isn’t in the cards. That doesn’t mean you can skip asking for a raise. Make your case as to why you deserve a raise, do your research on the average salaries for job titles closest to yours, and have an honest conversation with your manager. Warning – this only works for great employees, not just any employee. Just because you want to improve your finances doesn’t mean you deserve a raise.

10. Sell some stuff

Got a ton of unused clothing, appliances, toys, etc. lying around? Donate the stuff that is already in poor condition and sell the stuff that is still in great quality! eBay is a great place to start, but there’s nothing wrong with a good ol’ fashioned garage sale. The extra cash will come in handy as you improve your finances.

Expense control

11. Give up just one thing

I’m not asking you to give up cable, coffee, soda, AND gift giving all at once (although – more power to you if you want to)! Start small – what’s one expense, big or small, you can go without for all of 2017? For me – I’m going to cut back hard on eating out. Speaking of eating out…

12. Eat out less

It’s no secret that eating out often can do a lot of damage to your waistline. But it also does a ton of damage to your wallet! I’m not saying you should eliminate eating out completely – just cut back! Juan and I are going to stick to eating out only twice a week (this is a huge step back from our normal 5-7 days a week)!

13. Find another commute option

For us 9-5ers, a commute can really make or break the budget. Take a look at what you spend now on your commute (gas, toll, train fare, etc.) and look up other options available to you. Keep in mind the cheapest option may not be the best in terms of time spent, so make sure you take into account all things – not just the price tag.

14. Cut out cable

*gasp* I know, how dare I say these words??? But let’s face it, y’all – cable is expensive! With Netflix and Hulu being at extremely affordable rates, the case for still having cable is starting to dwindle. For us, the hardest part will be finding ways to watch our Golden State Warriors and other sports broadcasting. But other than that, Netflix and Hulu usually does the trick for our TV fix.

Beef up your savings

15. Seriously, get an emergency fund

I don’t care if you’re in deep debt – get yourself a freaking emergency fund! If you don’t have on yet, building one this year will greatly improve your finances. You are not invincible and Murphy loves visiting those who aren’t prepared. Even if it’s just $1,000, it’s a great start and better than nothing.

16. Set up a personal escrow account

You know those annoying expenses that don’t happen every single month and surprise you whenever they do pop up? Setting up a personal escrow account will prepare you for all of those expenses. Pair it with automatic savings and you don’t even have to think about it!

17. Start saving for retirement

I don’t care how young you are – it’s never, ever too early to start saving for retirement! No one ever said, “Man, I really wished I waited longer until I started saving for retirement”. For starters, look and see if your employer offers a free match to your contributions into your company sponsored retirement plan. Basically – your employer will put money into your retirement plan for free as long as you’re also putting in money! Take advantage of that free money!

So there you have it – 17 things you can work on to improve your finances this year! You don’t have to do all of them – in fact, I suggest choosing just one or two of these things. Focus on a few goals at a time and you’ll be well on your way to financial peace.

What are your financial goals for 2017?

AMDG,
Lisa

The Budget Series Pt. 1 – Income and Expenses

The Budget Series Pt. 1 – Income and Expenses

It’s the beginning of 2017 and I know that some of you want to get your finances together this year! If one of your New Year’s Resolutions is to grab control of your income and expenses, I’m here to help!

I’m creating a video series called The Budget Series that will go over different budget methods for different types of people. The first video in this series is focusing on your income and expenses. More specifically, how to gather these numbers and why they’re important, no matter what budget method you choose.

Your income and expenses are vital to all kinds of budgets, whether you’re a beginner or more experienced. This series is mostly targeted to budgeting newbies, but I’m sure you’d find this helpful even if you’re more advanced.

Please watch the video below and don’t forget to like/subscribe so you don’t miss the rest of The Budget Series!

What are your budgeting struggles?  How can you improve your income and expenses this year?

AMDG,
Lisa