Blogging Away Debt Blogging Away Debt follows real people on their journey to debt freedom — with tips on the debt snowball, budgeting, cutting expenses, and staying motivated.

by Adam Dawson

As I mentioned in a previous post, we’ve had a very difficult couple of months paying back debt, missing some of our snowball payments for the first time in 3.5 years.  It’s very disappointing to look at the numbers and see how little the principal decreases if we aren’t making extra payments.  So as disappointing as they may be, here are the latest debt balances.

Stafford Loan #1:  $8631 (-$191)
Stafford Loan #3: $20133 (-$433)
Discover Student Loan: $40338 ($-201)
Citi Graduate Loan: $37755 (-$260)

Total: $106857 (-$1094)

One very exciting improvement from before, however, is that we’ve accomplished our first emergency fund goal by socking away $5000 into savings.  The balances also don’t include our extra payments from the recent windfall, which will hopefully be all settled in the next update.

So we are making progress, albeit slowly!  When I think of the long term, I know the future is bright, but I’m ready to move past this temporary hurdle.

by Adam Dawson

The job transition is working out nicely so far.  My previous company offered me some severance, and I was also eligible for my unpaid bonus and to cash out my accrued time off.  My new employer offered a small signing bonus.

All told, we will pocket about $20,000 through the transition! This is such great news, and so timely.  So far, here is our plan.

$5000: emergency fund

$7000-$8000: debt

Obviously this leaves quite a chunk unaccounted for.  I was unemployed for two weeks during the transition, so some will go toward living expenses.  We also have holiday travel, Christmas gifts, and a friend’s wedding coming up.  I had to revamp my work wardrobe ($210 so far for 5 shirts and 3 pants), and I have to move to personal cell phone, which may end up setting us back a little more. So we are trying to balance some of these pressing needs with the desire not to let this money sneak off a little at a time.  We may put some more toward debt or boost our emergency fund further.  There’s also a lot more we’d like to do on the house and yard, but I’d prefer we keep trying to be resourceful in that regard.

For the curious, I am also fortunate to have received about a 13% raise from my last job.  Because I plan to contribute to the 401k, I’m not sure what the net gain will be yet on a monthly basis.  We’ll publish more info on the budget changes as it comes in.  I also plan to use the direct deposit system to divert the difference due to the semi-monthly pay schedule directly into savings.

Have you ever received a windfall? How did you make sure you didn’t waste it? What did you do with it?