January 2019 Financial Progress Report -

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Welcome to our monthly Financial Progress report series. We started recording the progress of our journey to Financial Freedom in February 2018. Our Financial Progress report has allowed us to document our journey and hold ourselves more accountable. We are amazed to see the progress that can be made by finding different ways to decrease our debt, make more money and save more.

Each month after we have received all our financial statements and updated all our financial data, we then compose our financial progress report for the previous month. This typically falls within the middle of month as some bills fall on the 1^st of the month and many other towards the last days of the month.

In our Financial Progress reports, you can expect to see an outline of our debt, savings, expenses, and income. Also, we will include a small snippet of what we did or what we need to do to improve each area. As time goes on, you can expect these progress reports to evolve and improve as we learn more about taking control and cultivating our money.

Budget

We currently use Dave Ramsey’s Everydollar website as our main budgeting tool. Below you will be able to see the main categories that we have broken our budget up into. There are additional sub-categories within these main categories. The last time we updated our main categories was in April of 2018. Since then these categories have served us well in the ability to see trends in our spending habits. As we move through our journey to Financial Freedom we will adjust our budget categories. When was the last time that you reviewed your budget categories?

In our June 2018 Financial Progress Report, we provided a small snippet of the methods behind our monthly budgeting and tracking. Each month we review our previous month’s expenses and evaluate where we need to adjust the amount we budget for. To keep track of our monthly bills so that they are inputted in our budget correctly, we keep a list of all our fixed bills, their amounts, and their due dates. We make sure that our bills are listed in order from the earliest due date to the last due date in the month. Then, as we pay each bill, we will check off by dating each item paid.

Right now my SO and I’s earned income is on a bi-weekly pay period. This provides us the need to stay organize and continue keeping track of every bill and expense that needs to paid between pay periods. Doing this ensures that we are paying bills on time or sooner which also saves us money by avoiding late fees and unnecessary interest.

To keep track of every bill in between pay periods, we make another list that breaks down our bills by their due dates into a weekly duelist. Even though my SO and I are both paid bi-weekly, our employers are on different pay cycles. What this means is that each week we are getting a direct deposit from either company. This does help us tremendously in how efficiently we are able to manage our money. Keeping track of our spending on a weekly, monthly and yearly basis gives us so much knowledge and insight into our spending habits and staying accountable to our money goals.

Now that you have some background knowledge on how we budget, let’s take look at our overall month progress towards Financial Freedom!

Debt

December 2018 Total Debt: $126,916.97

January 2019 Total Debt: $126,700.10

Credit Card Debt: $16,953.78

Car Loan: $0.00

Student Loans: $109,746.32

Despite having a lower income in January, we were still able to make decent progress in paying off our debt compared to December’s increase. We managed to pay off a total of $216.87 in January towards our debt. This past month we actually had a full credit card paid off for us through a debt protection claim we submitted. This balance was just over $1,000. Each month, we paid an additional fee on one of our Credit Cards for a debt protection plan. Many financial experts may disagree towards paying for these plans, but my family has found them to be really useful in the last couple of years as we encounter life changes.

The reason you are not seeing our debt paid off amount higher is due to the amount of dental work I needed in January. Due to the amount of work I needed, I maxed out my Dental Insurance Plan’s benefit and incurred an out-of-pocket cost of just over $900. We decided to use our Care Credit to pay for these expenses. We made this decision to add back to our debt versus using our emergency fund because we will be able to pay it off with our Tax Refund before we incur interest. Additionally, we want to keep our emergency fund full so we continue to earn the interest on the balance.

The fact that we had to add to our debt temporarily but still managed to lower our overall debt from the previous month is progress to us. As we move forward into the next couple months with the anticipation of a Tax Refund, we will see a spike in our debt repayment progress. Have you ever had to stall your debt free journey to focus on other aspects of life?

Savings

December 2018 Total Savings: $6494.53

January 2019 Total Savings: $6762.20

Emergency Fund: $4,256.07

C’s Retirement Fund: $2506.13

Back in October 2018, we set up our first ever Christmas Sinking Fund. We were super excited about this accomplishment as this was the first time in our relationship that we had the ability to cash flow Christmas. As we mentioned in our December 2018 Financial Progress Report, we were able to still cash flow Christmas but we didn’t have to utilize our Christmas Sinking fund. Since we had this additional funding we set aside and did not use, we had a decision to make.

There were many options for how to disburse the unused Christmas Sinking Fund. We could have used the funding for paying down debt, starting new sinking funds or increasing our savings.

We are excited about the possibilities that arise as our savings continue to grow.

Expenses

Total Expenses: Largest Spending Categories

Housing and Utilities: 20%

Food: 19%

Debt: 15%

SO’s Lifestyle: 14 %

January proved to be another month in which we see our category percentages shift except for our Debt. Our Debt percentages continued to remain at 15% of our total income in January. Even though it remained the same this month, I am still blown away that it is at 15%. At one point debt was over 30% of our total monthly income.

We saw a 3% increase in our Housing and Utilities cost in January. This was mainly due to our heating cost and increased electric bill. As we move closer to spring weather we expect to see this go down. We are also working on a task that can help us reduce our electric usage in the house. Our electric company provides a great tool on their website that provides tips and task on how to reduce your energy use. These task our little habits like unplugging your chargers when no longer in use, increasing the temperature on the refrigerator and installing a smart thermostat for your heating and cooling system.

Last year we joined Arcadia Power and have enjoyed the home efficiency guidelines that they provide to us on our dashboard on their website. Once we linked our local electric company to Arcadia we could then opt-in to utilize more clean energy and save money at the same time! We encourage you to check them out and give them a chance.

In our December 2018 Financial Progress Report, we claimed that we would like to see our food spending under 20% of our total income and we succeeded at that goal! We manage to decrease our food spending by 5% in the month of January 2019. Much of this success is due to us not eating out as much throughout the month. We also tried to be really strict with our grocery budget by sticking to things on sale and buying the bare minimum items needed.

Lastly, we saw an increase in my SO’s lifestyle expenses. This is just temporary inflation as we budgeted for items he would need for his upcoming ice fishing trip. We expect that his lifestyle expenses will go back down to his average percentage.

Overall, January proved to be an interesting month with changes to navigate and I think we successfully managed to stay on top of our spending. We are continuing to research ways to automate the tracking of spending more so that we can have more time to research and implement savings options. How are you planning to decrease your expenses?

Income

December 2018 Total Extra Income: $22.29

January 2019 Total Extra Income: $94.66

We saw a dramatic decrease in our total extra income for December 2018. However, by the end of January 2019, we are slowly increasing the amount of total extra income we are earning. We were able to increase our income by utilizing our Ibotta and I sold some of my Art Supplies inventory. Ibotta has been a great way for our family to receive cash back on our everyday grocery shopping. We have already earned over $200 since we started using Ibotta in 2018. Are you interested in learning how you can maximize your Ibotta’s earning potential? If you decide to start taking advantage of cash back through Ibotta, we invite you to join our team here. By joining our team and redeeming one offer within the first month, you will earn $10.00!

Ibotta: $9.20

Mystery Shopping: $0.00

User testing: $10.00

Online Surveys: $.36

Misc: $75.00

Monthly Goals

Every year we set out to reach certain milestones. We learned that if we are going to reach those milestones then we must set short term goals that aid value to our long term goals.

Every month, we try to break down what our biggest priorities are for the year into smaller and measurable goals. This year those priorities are going to fall within these areas financial, personal development, health and fitness, family, and career. Each month we intend to share our results of the goals that we set for additional accountability. Below after we post the results of our past month’s goals, you can expect to read a snippet of our successes and our setbacks during that month.

In January our focus was on paying down debt and enjoying a new family activity, I, also, personally wanted to read half a book, start tracking my food intake and continue to write content. At the end of the month, we were able to pay down just over $200 towards our debt, I also finished half of my current book and I continue to create drafts of content.

In January our family worked on getting back into a new routine after a school break. Even though it wasn’t a new activity that brought fun it did promote a balanced life. Due to a full week of snow days, we also had an extra mini school break in January. Moving forward into February we plan to have more new family activities planned out. We are hopeful that our goals towards Health & Fitness will progress better in February as well. I realize now that setting a goal of tracking food daily would not be successful as I failed to plan ahead. Again, we expect to see a big change in results for this area by the end of February!

We have really enjoyed using this process to commit to monthly goals. It aids in keeping us on track and allows us to break down those big dreams into smaller achievable ones. We look forward to continuing to do this each month. Check out our Instagram feed if you’re interested to see where our focus is going in February!

Recap

Overall, January was a decent month for us. Oddly enough our debt decreased even though we added to the debt. Additionally, we were able to increase our retirement fund, decrease our food spending, and increase our extra income. We have still found it to be encouraging that we are meeting some goals and knowing that slow progress is still progress in the journey. Learning to adapt to our changing lives month to month continues to take place. We believe we are moving forward in the right direction each month.

Previous Financial Progress Reports:

Preparing these reports have brought much accountability to our personal finances. We also appreciate the support that the debt-free community has unknowingly provided. This has really allowed us to remain determined and confident in our abilities to keep meeting goals. February will continue to bring differences that we have to plan for. We are certain that we will continue to make progress towards our journey to Financial Freedom.

Do you create monthly goals? Are your monthly goals a broken down version of your annual goals? Comment below to share your responses. We are a judge-free zone!