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Disappointing Debt Payment

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First, thank you so much for all of your kind comments regarding our family health situation. I’ll try to keep you updated (especially in terms of finances) as I get more information.

In the meantime I wanted to tell you about how this situation, coupled with the no-income May, are going to affect debt payments this month.

It kills me to do this….but I’m going to have to pay only minimums.

We live on last month’s income, so having such a low income for the month of May is really hurting us in June. Hubs’ business drew no income last month (thankfully it didn’t cost us anything so he had enough income to cover his expenses, but no profits were earned). Also, remember how we owe the IRS money? Yeah. We already have some of the money set aside but I was going to use my May paycheck to cover the rest of the bill. BUT, since my paycheck was our only source of income for the month, I’ve put some aside for IRS bill, but I’ve kept some to help cover part of our expenses this month. And we’re raiding our EF hard-core. I’m trying to minimize the amount we have to withdraw from the EF (we’re trying to sell everything possible), but it could come close to being wiped out this month. A very scary feeling.

Given all this (and uncertain future spending) I think that it’s better to keep some money in the bank, pay minimums on current debt, and try to build some reserves this month. Debt payments will be as follows:

  •       PenFed (car payment) = $0 (I’m prepaid ‘till next April so no fees incurred)
  •       Student Loan Payments = $433 (minimum payments:  $77 to ACS ; $356 to Navient)
  •       Medical Bill = $25 (minimum)
  •       Balance transfer = $0 (no interest currently, but this means later payments will need to be higher to cover this month’s deficit)

That’s only $458 in debt payments this month!

I hate it! This is my lowest monthly debt payment in the 15 months I’ve been blogging here.

To compensate I’ve also taken away all monthly savings in their entirety. That means nothing toward:

  •       Cruise 2016 fund
  •       EF (in fact, we’re raiding the EF)
  •       Car repair fund
  •       Health/Dental/Vision fund
  •      Semi-annual fees fund

Usually I put several hundred toward savings each month (up to $1,000), but all savings is being suspended until we can get the financial bleeding to end.

So…minimum debt payments, no savings. Pretty much sums it up.

I’ve got to get back to work – Mondays are always a busy work day for me because assignments are due on Sundays. : ) Still thankful for my job!

Ashley

Texan at heart; Arizonan on paper. Lover of running, cheese, camping, and family (fur-family included!). Blogger, motivated to get out of debt YESTERDAY! Follow along with my journey!

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11 Comments

  • Reply Jean |

    I know you hate only paying minimums (have you really been blogging here for 15 months?!) but aren’t you glad that you have that option – and you’re so far ahead on some that you don’t even have to pay ANYTHING this month? And aren’t you glad that you have been living on last month’s income and have money in an EF to raid? Think about how far you’ve come. You’ll still make your goal – it’s just pushed out a little farther.

    I was actually just thinking about you – saw a freelance job for a university developing some online coursework, but you probably have your hands full right now… (timing is everything, isn’t it?)

  • Reply Jan |

    “family come first and paying the minimums is a sensible thing to do in this situation. 15 months of hard word at debt payoff has put you in a much better financial place so don’t beat up on yourself. It was a situation like this that kicked off our credit card problem – we actually had no credit cards and then a family member became ill suddenly and so got a card as we had little savings & I had to take time off work to become a full time carer. Its been several years since then and though I hate that we are in debt, I have to say I do not regret the time spent with my mum during those years or the cost – its one year this week since she died. Time is short – so pay the minimums till you have a clearer idea of what the future holds and stash any extra into your savings. all the best to you Ashley

  • Reply C@thesingledollar |

    In general I think this is the right plan — focus on stabilizing your finances. You’re obviously committed, you’ve just had a really bad month.

    One thing: is there any way you can come up with the cash for the regular balance transfer payment? I think it is really important that you make this if at all possible, even if it means withdrawing more from your emergency savings. It seems critical to me that you not get “behind” on this particular debt; you’re at the beginning of paying it off and it’ll have significant consequences if you don’t make it in time.

    Good luck with everything and I’m sorry to hear about your family member!

  • Reply Connie |

    Have you considered raiding the cruise fund instead of the EF? Just a thought. But depending on the health issue and desire/need to travel with regard to that, seems like a cruise might be somewhat out of the question. Plus it would make a really good reward for when you’re truly debt free. 🙂

  • Reply Theresa |

    Hang in there. Think of how much lower your monthly options are now than they were 15 months ago. You have made great progress. It is marathon not a sprint.

  • Reply Kim |

    I am sure you have thought of this but I would double check my taxes. We calculated ours through TurboTax, and it showed we owed over $2k. I thought we owed but not nearly that much, so I downloaded the forms and studied and checked it myself. TurboTax miscalculated our taxes, and we showed a return of $60. Then last week, the IRS sent us a letter telling us the calculation was wrong, and we were owed $90 instead. Needless to say, double check!!

  • Reply kim |

    Some months are like that, but slow and steady. I know, I know I have been at this for 4 years now but it really is going down. You are in a much better place. Be glad you have the means to do this and move on. Remember what is was like to not have enough to buy groceries or put gas in the car without a credit card? When your bills were more than your take home? You are beyond that now. I am proud of you. Keep going.

    • Reply Ashley |

      Yes! Those memories of relying on credit cards for basic living expenses are still fresh in my mind, even a couple years later. Thank goodness that’s not our situation anymore! Thanks for the support!

  • Reply T'Pol |

    I’m sorry that I missed your last post. Wish you the best with the health concern in your family. We had a health scare early this year but things seem to be improving and looking better now. So, you never know. Just hope and wish for the best.

    As for the financial situation, do not get too upset over this. There will be ups and downs along the way and that’s what life is. What if it takes a couple of more months to be free of debt? It is not the end of the world. You have learnt many lessons as you got into into debt and started to get rid of it. That is what is important. Now, you have the ability to deal with it. It is always difficult to deal with variable income but, so far you had been good at it, right? Things will get better. Trust me!

  • Reply Holly |

    I will pray for your situation .. Dont worry you will find a way to make up for the set back. thanks for sharing thats why i am so hooked on your blog.. because I am trying to get out of debt as well and i always want to give up when life throws cruve balls at me.

    Thanks

So, what do you think ?