Sinking funds is definitely how we are getting ourselves out of debt. We put a good chunk of money into our sinking funds every month. On average, we allocate about $2300 per month into our sinking funds. Our categories are: household, car repair, kids, beauty, school, clothing, health, home repair and furniture, appliances, car insurance, new car, and Christmas.

To look at some of these funds, it’s easy to say if we didn’t have them we could get out of debt sooner, but the reality for us is, not having these funds was keeping us in debt. Even though we weren’t planning for these categories, we were spending money on them (for the most part). During the COVID lockdown, both our dishwasher and microwave went out. Both those purchases went on our credit card because we needed them but didn’t plan for them. Now, we are setting money aside each month for appliance replacement, so the next time an appliance goes out, we will have at least some money to put towards it without depleting our entire emergency fund or putting it all on the credit card. Cars break down and need general maintenance. By not setting money aside for it, we were constantly having to put tires and oil changes on our credit card.  There are some categories on our sinking funds list that could be eliminated while we pay off debt, like beauty or clothes, but the reality is we spend money in those categories so it’s better to have the money set aside than to charge it and then feel guilty for weeks afterwards.

Our car insurance is paid in full yearly. We have a separate bank account that we have set up for automated savings. It funds our car insurance and registration each year as well as our giving and donations.  Our car insurance is due in July and is around $3300 per year.

Adequately funding our sinking funds has been lifechanging for us on the debt-payoff front. Since we started really using sinking funds, our debt has actually decreased by about 55%. We have paid off over $13,000 in credit card debt alone and built a small emergency fund. I won’t lie and say it isn’t tempting to send all “extra” monies to our credit card every month, but I know that will backfire on us because then we will spend money we didn’t budget for and be right back where we started.

Funding our sinking funds has been very empowering. Ironically, sometimes I feel like we spend less money because I like seeing our sinking fund balances grow. Admittedly, some of these funds are mini-savings accounts. It’s not every day you need new sofas or appliances, but it will happen, and it will cost money. Sinking funds are the key!

I am so excited to get out of debt. Knowing that we are already fully funding most of our sinking funds makes me so excited for the future. That means most of the money we send to our credit card right now, can become savings when our debt is paid off. (We will increase the amount we are saving for a car and our home repair sinking funds, but other than that the rest of the money can go towards savings and some longer-term goals.)  

Full disclosure, some of our sinking fund categories are new so the balances aren’t where we want them to be yet, but we are funding them! Current sinking fund balances as of 10/31/23:

Household: $285

Car repair: $500

Kids: $100

Beauty: $315

School: $100

Clothing: $295

Health: $160

Home repair and furniture: $475

Appliances: $350

Car Insurance: $336

New car: $3075

Christmas: $100

 Total: $6091

We also fund our food and gas envelopes bi-weekly but don’t count them as sinking funds. Some of our sinking funds are lower than we would like because we recently made large purchases. We paid for half our son’s welder and purchased him a new welding helmet for his birthday. That was paid for out of our school and kids envelopes.  Car repair is another envelope where we feel like we just can’t get ahead, but we are going to keep plugging away!

I like seeing our sinking fund numbers in black and white! It really is motivating to know we have a small cushion against emergencies and that we have given ourselves permission to spend some money. We are taking control of our finances, and this is another step in the right direction!

We are trying to stay on top of our finances, part of that includes planning for our unusual spending each month.

Honestly, there isn’t a lot going on in November. We have our son’s 20^th birthday, The Charles Dickens Christmas Faire, and Christmas to plan and pay for.

For our son’s birthday, he always chooses meals made at home over going out to dinner. We will have very minimal ingredients to buy because we almost always have all the ingredients on hand for his choice. He has chosen cookies for his dessert this year and we have everything for that too. We have a couple small gifts and only need to buy his “big” gift. It's going to be expensive this year. He wants to be a welder and he picked a $600 welding helmet from Snap-On. He was going to buy it for himself, but one of our friends (who works for the county) said he can order things at a big discount. Our friend ordered it for him and the total is $380. It's expensive, but well worth it for his career and eye sight. We have chosen to buy this for him for his birthday. He was all set to pay for it and when we told him we would like to get it for him for his birthday, you should have seen his eyes light up. We have been saving up for some expensive purchases for our kids. (We also paid for half of his welder, which we had been saving for for several weeks. This has depleted out kids and school fund so we will need to keep saving as we are going to pay for half of our daughter's computer for personal training.) For our November budget, I added extra money into our “kids” category to cover these purchases. Now, we need to save, save, save over the next several pay periods so we can do the same for our daughter.

The Charles Dickens Christmas Faire is held in the Cow Palace every year and we have gone on Black Friday every year since we got married. The ticket prices have definitely increased. For our family of 5 (including my mom), tickets were $185… and this was the early ticket price. Normal ticket price would have been $230. We purchased the tickets the same night I won in BINGO and we used part of my BINGO winnings to pay for it. We will still need to pay for food and gifts/souvenirs while we are there, but that will come out of our food and Christmas envelopes, respectively.  Those budgets have been adjusted accordingly for November.

Lastly, Christmas… We finish up a lot of our Christmas shopping in November. We have been putting money aside all year and used it as we needed it, but in November we are usually putting the finishing touches on our gifting. We are doing very well this year and just need a few things here and there. Our Christmas sinking fund should cover it.

I am feeling like we are in pretty good shape heading into November and just need to keep paying attention to our finances to make sure they don’t get away from us and we don’t overspend in any areas. 

Our credit card balance is (slowly) going down and our saving balance is (slowly) going up. I feel like we are under control heading into the holidays, which is good because this is usually when we overspend.

I read somewhere (in a Pinterest article I think) that people are 42% more likely to accomplish their goals just by writing them down.  Now, I didn’t fact check this and I have no idea if it’s true, but it definitely got me thinking.

What are my financial goals?

I decided writing down my goals was important. I know my “why” in my head, but I want to see my “why” staring me in the face. If I’m having a bad day, I want to be able to flip to my goals and remind myself of how far we’ve come and why we are working so hard to improve our financial situation. Each goal has our start date and our hopeful target date for completion. Each goal also includes action steps to meet our goal and possible obstacles that could derail us.

We came up with a short-term, mid-term, and long-term financial goal.

For us, a short-term goal is from 0-3 months. Our goal is to get our credit card debt below $10,500 by the end of the year. I wrote out our goal, created some action steps to get there, identified some possible obstacles, and wrote why this goal is important to us. The biggest obstacle to this goal is Christmas. If we keep our Christmas spending in check, we will accomplish this goal for sure. We have a Christmas sinking fund, we just need to make sure to keep everything within budget.

Our short-term goal is from 3 months-1 year. We made this a savings goal. I have mentioned before that I am unhappy with our low savings. We currently have only $2,500 in our savings account. (We do have some other liquid monies, but our official emergency fund only has $2.500.) Therefor, our goal is to increase savings and have $6,000 in our emergency fund by August 31, 2024. This is a realistic goal and also takes into account some spending that will be happening throughout the next 10 months (a trip, some expensive purchases for our kids, etc.). We add $550 into our savings every month, but we do have to dip into our savings occasionally, so $6,000 is realistic and still attainable, but with our planned spending a little bit of a stretch… in a good way.

Finally, for our long-term goal we decided on 1-3 years. For our particular goal, we gave ourselves almost 2 years from writing the goal to our target end date. Our long-term goal is to be credit card debt free by 8/31/25.  It’s been a long slog already, but most of that is due to our yo-yo debting. The last 18 months we have made good progress and decreased our total credit card debt by more than half. I’m hoping the next 18 months are as successful! We should be able to make this goal by our target date and with any luck, will actually finish it sooner. We wanted our goals to be stretch goals, but also to be realistic.

Our goals are SMART goals. They are specific, measurable, attainable, relevant and time-bound. We just need to work towards them and push ourselves to be responsible!

Writing our goals down has renewed my sense of purpose in our financial lives. I like being able to look at my goals and determine if I am on track or not. I like being able to look at my goals and know that we are making progress. Having my goals written down and seeing the progress gives me a sense of accomplishment and helps me to stay the course because it makes me accountable. I think sharing my goals will do the same thing.

I think I’ve probably written about this before, but it never ceases to surprise me. My finances do so much better when I am paying attention to them. I’ve never been one to incur late fees, but there is a difference between paying bills on autopilot and truly being on top of your finances. When I am on top of our finances, things go so much smoother. We seem to save more, spend less, and get rid of more debt. There really is something to be said about “out of sight, out of mind.”

I go through periods of being really diligent about our finances and periods of putting them on autopilot. When we are on autopilot, our debt almost feels stagnant. We don’t usually incur more debt, but we pay almost nothing off. We just exist. However, when we are on top of our finances, we make the biggest gains in both decreasing our debt and increasing our savings. I wish it was easy to always be on it, but for whatever reason, we get lazy.

I need to make it a habit to check our credit card balances every day or so. Seeing how high our credit card balance is really motivates me to do better, but out of sight usually means out of mind. I have been very focused on our debt payoff for the last few months and I feel like because of that we are making some good progress.  

What habits do you have that help you to stay on track?

This debt update is based on our most recent credit card statement which posted on 10/16/23.  . I do these mid-month because our credit card closes on the 15^th. I can’t wait for the day when we are consumer debt free and I can do our financial savings updates at the beginning of each month and I don’t have to take into account when our debt cycle closes!

Although we are not paying off our debt as fast as I would like, I am happy to say that our debt decreased! It actually went down by a pretty good chunk! This was a fantastic month for our credit card debt payoff!

Here is our current credit card debt totals:

            $11,907.49 at 19.99% interest  

Our total credit card debt stands at: $11,907.49. That’s a lot of debt. All we can do is just keep plugging away. We dug our hole one shopping trip at a time and all we can do is pay it back one month at a time.

Plus side: Our debt decreased! By a lot! We have the least amount of credit card debt that we have had in several years! This is the first time our credit card debt has been below $12,000 since before we moved in 2017! That is a major plus! We were yo-yo debting for years and never got below $12,000. We paid off $2104.87 of credit card debt (after interest); that amounted to 15% of our current debt! And we have paid off 52% of our total debt from our high of almost $25,000! We did have some “help” this month in that it was a three paycheck month so we had an extra $1000 to throw at debt… but I’m happy because we did throw it there!

Down side: No matter how much debt we pay off, it’s never enough. Of course, I hate that a couple hundred dollars went towards interest on our debt instead of towards the principal! Lastly, it’s actually a little depressing to see how long we have been on this roller coaster called debt freedom. We made some poor choices and have been living in a debt cycle for too long! It’s all our fault and we don’t even have medical problems or emergencies to blame for it; we were careless and irresponsible, but we are on track now and making progress.

Looking forward to: getting our credit card debt below $11,000 by our next statement and keeping it that way. I’m also looking forward to staying on the debt pay-off and blogging band wagon! I was off it for too long and it feels good to be making progress again! I’m wondering/hoping if we will actually meet our goal of being under $10,500 in credit card debt by the end of the year! It’s going to be close and I’m going to keep chugging along and doing the best I can!

This was a good month and we are working a plan! Clearly, I’m not in an ideal situation. But if I have to get out of debt one baby step at a time, I can do that.

I hope your debt freedom journey is smooth, uneventful, and beyond successful!

Wish us luck!

This past weekend I went to play BINGO with my mom and my sister. Truth be told, my sister and I are not on very good terms right now (families are complicated!) and I didn’t really want to go. However, I was invited as a sort of olive branch, so I went. I didn’t know about this at the beginning of the month, so I didn’t budget for it, but I keep a little purse that we throw “extra” money into once in a while so I took $75 out of that to go play BINGO. (We buy little treats or pay for small things out of the purse.)

When I got there, my mom and sister were already seated and had purchased our BINGO cards. My mom treated for both my sister and me, so I ended up playing for “free”. I have never gone to play BINGO before and didn’t know how expensive it is or how expensive it can get if you add all the extras. It was $45 to play the straight BINGO cards. Then there was a $25 pack for special games, plus you had to buy some $1 ticket each, so $71 for each of us. As we played, they sold lots of extra games and cards that we didn’t buy but were apparently big business!

The pots were huge for each game… $500. I still can’t believe it, but I BINGOed! Twice! The first BINGO I won was split 3 ways so I got $167. The next time I won… it was just me! I won $500! I ended up winning a total of $667!

I tried to pay my mom back, but she wouldn’t let me. She allowed me to buy her a $2 candy bar. I bought dinner there to the tune of $5 and I donated $10 back to the high school we were playing at. I went home with $650!

The money has already been divvied up and put in different envelopes for different things. I treated myself to a new pair of shoes that have been in my Amazon cart for 5 weeks that I was saving up to purchase; that was $95. We are going to a Christmas fair next month (we go every year) and I was going to budget for it in our November budget but used this unexpected money instead. That was another $180. We have some super expensive purchases coming up to help our kids, so $160 went into our “kids” envelope. $15 went into our household envelope as the holidays always get so expensive and the remaining $100 is going towards our debt.

I still can’t believe I won… twice at that! This money could not have come at a better time. It helped with our budgeting for many different purchases we have coming up in the near future; and it will actually make our November budget so much easier to make!

In some ways, I feel like I should have sent all my winnings towards our debt but I think this will work better for us in the long run.

When I posted my credit card balance a few people in the comments gave some really good ideas and tips for us to help us get out of debt faster. One of them was to open new credit cards with 0% interest offers and do balance transfers. And yes, while to do that the math makes sense, the reality is I don’t trust myself not to fall back into bad habits.

We are working hard to get out of debt right now and I think we are making decent progress and making better and wiser financial choices. However, our change is still too new for me to trust it. Years ago, we did open a new credit card for the balance transfer offer. We transferred a huge chunk of the balance and proceeded to charge our old credit card right back up to the limit. Then we had two huge credit card bills to pay. I would like to think we are more disciplined now, but I’m actually not sure. I would rather pay the interest on our credit card debt, as much as it sucks, than end up with more debt, more payments, and more feelings of despair.

I can see the light at the end of the tunnel for our debt payoff. It’s faint and only a pinprick, but it’s there. When I post our next debt payoff, we will have paid off around 50% of our credit card debt from its highest point ever (and paid it down in 18 months) and be at our lowest point of credit card debt in 6 years. I’m willing to take the loss on interest to ensure ultimate success.

Full disclosure, we did just open a new credit card. Our daughter is traveling internationally (and I may be too, but more on that later) and she didn’t have a credit card. Getting a credit card is not like when I was 18, most kids can only get a secured card and nothing with travel benefits. I opened a new card with her as an authorized spender that she can take to Europe with her and she won’t have to pay any foreign transaction fees on her purchases. She has budgeted for the trip and will be able to pay the bill in full when she returns. She is using my credit to help build her credit.

Another reason I don’t want to open (anymore) credit cards is because there is a very good chance we are looking to move and buy a new house in another state in the very near future. We don’t want our mortgage affected in any way and are trying to keep our credit as good and clean as possible. We don’t want to have so much open credit that it dings us or that we have to pay (even) higher interest rates.

I think I have said this before, I am a credit card company’s favorite customer. I charge high balances, but always, always make payments on time. Because of this, I have great credit. According to the three main credit bureaus, I have “very good” and “excellent” credit scores. I am working to keep my credit scores and ratings, but get rid of all the debt! 

We decided we would rather be safe than sorry. I know it's all based on out own discipline or lack thereof... but we don't want to chance it.

Since No Spend September is over I want to give myself another challenge. I want to have 10 no spend days in the month of October. I mean real no spend days: no bills, no gas, no grocery shopping, nothing.

This is more than doable, but it will definitely take some planning. I’m going to print out a blank calendar for October and then put my bill due dates on it. Then I will try to make needed purchases on those days, much like the idea of combining trips when you are trying to save gas, I’m going to try to combine my spending days so I can have no spend days. I think having no spend days, or trying to combine my spend days, will help me to spend less. I have always liked the idea of a good challenge. Plus, trying to have no spend days and combine shopping days will automatically use the “wait” rule. Although I think I have tamed the Amazon habit, this will be another way to help curb impulse buys.

The only thing I won’t count as spending money is sending payments to our credit card debt. I make a credit card payment with every paycheck and any time we get extra money. Working to payoff our debt will not be counted as spending money.

Challenges that help us save money, payoff debt, or curb impulse buys are all ways to help us get on better financial footing. We do have a huge credit card debt, but other than that our financial forecast looks good. But the debt we have is keeping us from meeting our full financial potential. I read on a blog once a long time ago that paying off debt is paying for your past and I don’t want to do that anymore!

I think 10 no spend days in a month is more than doable and a fun way to not spend money. I like challenges because I like "winning". Hopefully it's going to be a good month!

Our grocery budget during No-Spend September was brutal! We did our last shopping trip on Saturday 9/30. Technically I could have played the game and not gone grocery shopping until Sunday, but either way, the money was going to be spent. We were at about $420 and spend another $198, so actually over our normal budget of $600. We spent (roughly) $618 on groceries for the month.

We got 6 gallons of milk, Greek yogurt, raspberry, oranges, apples, asparagus, artichokes, 4 loaves of bread, almond butter, 5 dozen eggs, cashews, mixed nuts, feta cheese, and sliced cheese. Fruits and vegetables were more expensive than usual but the price of eggs has come down a little.

Although I wasn’t successful on my grocery budget challenge for this No-Spend September, I feel like overall the month was successful. I charged way less on my credit card. I didn’t make any impulse orders from Amazon all month (and hope to continue this!), and we put some money in savings.

I’m still counting this No-Spend September as a good reset. It’s always good to reset and look at your spending habits and your triggers and I think this past month was good for me. Hopefully we will make a good dent in our debt this month!