This activity really aligns with what Jordan and I were talking about over the last few weeks - increase mortgage payment, pay of LOC, or pay off escape. Well...let's look at it all and make a plan.
Gail feels very strongly that all debts must be paid within three years of starting a pay off plan in order to avoid debt fatigue. It has to be quick enough to realize gains without being so fast that it feels like an impossible task.
So...leaving our mortgage out of the equation we have two car loans and a LOC - given that the Kia has a 0% financing I'm going to focus on the Escape and the LOC.
Jordan and I currently have $900/month committed to debt repayment - so we're short $230.96/month to get it paid within three years. I believe very strongly that we will be able to come up with these funds with Jordan's Commission - but we need a way to stay on top of that.
To help us do this, I've done two things.
Added an extra line item on our monthly budget 'Extra to Escape' (because it has the highest interest rate) - as a reminder that money needs to go there before into the planned spending categories.
Added a tracking bar on my blog to stay accountable for the extra $8,314.56 we need to come up with over the next 36 months.
I've been tracking our spending for a long time, so this task was pretty easy for me to do. Here was our year-over-year comparison for the last four years, and I've added 2014's average so far.
Groceries has been on the rise and as already described eating out and alcohol took a dip in 2011 but then have been rising ever since. Entertainment is on the rise as is vehicle maintenance - though with having two vehicles again, I'm not surprised with the dip and the return to 2010 levels. We're down a bit now, and so that's a good start to the year.
Home Maintenance is way down now that we're not in 'brand new house' mode, we want to buy everything to make it pretty' mode. In to 2014 and Gas has indeed gone down - now that we're out of the worst of winter, I hope it will go down a tad more because we won't be warming vehicles up in the morning any longer. We're on a great start with groceries (thought an Anonymous commenter from yesterday has me thinking that Jordan and I have an opportunity to talk and really make some goals around this). Eating out is creeping up, as is Alcohol.
We're on track for Entertainment, Pets, Medical...and I'm actually fairly happy with all of the remaining categories so far.
What is evident - and I know, I know I've said this before - is that our weekly budget of $300 just isn't cutting it...need to have a think about our spending strategy...and perhaps our non-spending strategy. I cant tell you that we haven't changed anything yet...but I'm hoping that through Gail's process, we might just get closer to working this one out.
I've just finished February's spend report - but thought I would post it along side January for comparison.
You may remember I mentioned it had been a busy month - the gas bill sure shows it! We're way down on groceries - but I would expect my mom's was higher than it normally is...I also traveled a lot for work and meals were comped.
We don't usually spend a lot on pets outside of dog food - but this was an extra bag to leave at my mom's house along with a new leash for Aries.
Vehicle Maintaince - we had a 12 point inspection done for hitting 12,000 KM's on the Kia - everything is in good shape there and also had a few car washes and other odds and ends.
The Clothes bill this month is actually for drycleaning. Jordan is wearing suits and dress shirts again so I expect to see this as a semi-regular occurrence going forward.
I registered for my fourth courses for the program I'm taking in school. I've already been reimbursed through work for this one.
I'm wondering if anyone else has decided to go through her process? I've just registered and am at Level 1 - Financial Literacy. I think I'll probably get through the first couple of phases pretty quickly (I've kept a spend record for three years, so that'a tick box for the first activity).
I haven't found a community or team to work with yet - but I wanted to log in and get started to see what it was all about first.
I would love to hear your thoughts on if you've started the program, heard of it but aren't interested - or anything else!
As I work through the process, and the activities, i'll post my progress on my blog.