May update: almost debt free!

Well folks, it's been far too long since I've updated the blog! Almost a year (how embarrassing), but I'm back again with more frugal shopping trips and financial wins to journal about.
First item of business, an update on our debt situation:
We officially own our car! As of February (or maybe it was March, I can't remember the exact date) we made the last payment on our car.  Thank you tax refund :)  It feels good to no longer have that payment. At the same time that we paid off the car, we paid off my student loan, which was SO exciting for me! It was our biggest debt and had the worst interest rate of any of our debts, so to have

that completely gone is such a relief! We made huge extra payments on it in the last few months, and the last portion was also paid off with our tax refund. Now the only debt we have left is Ben's student loan, which should be paid off this year. We're down from $15,000 in debt to only $3,000 in just over a year, and boy does it feel so good! We have been following the roll over payment plan that I talked about in my first debt post (found here if you're interested), and it's allowing us to pay off our debts much more quickly than we originally anticipated.

Another huge portion of our debt free journey becoming a reality comes from a move that we made at the end of last year. We were given an opportunity to house-sit for some relatives who are out of country for the next 2 years. We maintain the house and land, and care for the animals, and in exchange we get to live here rent free. We couldn't pass that up, and the portion of our income that used to go towards rent has greatly helped us pay down and pay off our debts.

The hardest part of this journey is maintaining the same living standard even though we have extra money. I mean, technically we don't have any payments due on Ben's loan for over a year (because we are so far ahead) and it is sometimes tempting to use that extra money on nice things that we currently want. I've found that the key is to continue making small debt payments every week or so. Whatever extra we have left over from that week gets made into a loan payment. So we still feel like we're living paycheck to paycheck almost, because our bank balance is very low. But the balance of our last debt keeps getting lower and lower, and one day will be non-existent, and then we can start really living!

I also need to note that before we started throwing tons of money at this debt, we made sure to establish an emergency fund. We used to keep it in a savings account at the bank, but with online banking nowadays, it was too easy to "borrow" from it when we wanted to buy something but didn't have the money at the moment for it. You know, "hey, there is this thing we 'need' to buy, but we won't have the money for it until we get paid on Friday. I know, we'll borrow the money for it from the emergency account, and then as soon as we get paid, we'll pay the emergency fund back!" Electronic transfer and done. And while it is true that we always paid the emergency fund back, it was always too slow for my comfort. Once we had to "borrow" $500 from the savings account to cover the cost of rent, because we hadn't been careful enough with our budget leading up to the 1st of the month (this was the middle of last year, before we moved and no longer had rent payments). I can't just pay that back in one go because we wouldn't have $500 excess for another several weeks. So I had to set up automatic transfers to put that money back into the savings over the course of 4-5 weeks. It was like paying a debt down again, because we would deposit the paycheck and then suddenly it was mostly gone, and a good portion of that was because I had to pay back the emergency fund. And then as soon as the balance was back up to a comfortable range, something would happen and we would end up needing the money again. Finally, I was just done with the cycle. It made my anxiety ramp up way too much. So we took the money for the emergency savings out in cash. It's in a secure place where we can get to it easily, but discrete enough that no one would know it was there, and we often aren't thinking about it or conscious of it. Way better than seeing it glare me in the face every time I logged onto my online banking.

Another plus is that as soon as we took it out in cash, we haven't had an emergency. When it was in the bank, there were ALWAYS things that came up that we felt like were emergencies. The tires needed replacing, or a medical problem came up, or whatever other unforeseen expenses crop up all the time. They all just stopped as soon as we took it out with cash. Or maybe they didn't completely stop, but we found ways to pay them without dipping into the emergency savings. It's been significantly less stressful for us.

So that's where we are at right now, and it feels so good! After we get the last of the loans paid off we will start saving money for a second car and also for Ben's grad program.  We expect that we will have to borrow some money for his Masters, but the fact that we won't have ANY other debts will make it way less stressful. We still feel like we are in limbo for a while, because we won't be buying a home for at least 3-4 years. That seems daunting to me, because I just want to start saving for one right now! But everything has to come in it's own time. Priorities, right? We will continue to save for future expenses, but a second car and Ben's program are bigger issues than a house that's at least 4 years away. In the mean time we'll keep trying to be as frugal as possible!

That's all for now!