I started writing this blog after going from $19,000 in credit card debt to owning my own home in less than a year. The reason I shared it was because before I did it, I didn’t think it was possible. I wanted other people to know that with hard work, sacrifice and determination, they could do the same. So to keep me accountable to my readers I want to do a financial check-in every now and then, because really, my story has just begun.
Many things have changed since I bought my home in December 2020. The pandemic has raged on, and our province which weathered the second wave mostly unscathed went back in to lockdown during the third wave. I’ve struggled physically and mentally to keep up with all the demands of life and have had to reduce my work hours, thereby reducing my net income. And through all of this I stopped writing.
In the last few months I’ve started writing a number of posts on interesting financial topics, and I hope to get back to them soon. But for today, what I really need to write about is the progress I’ve made in my personal finances while almost all other types of progress have stalled for me.
Last year I paid off $10,000 in debt along with saving roughly $3000 for my closing costs. That’s in the ballpark of $1600/month. No easy feat. By the time my closing date rolled around I had $9000 left to pay off, and a lofty plan to do it. I figured that if I kept paying at least $1000/month, I’d be debt free by September.
There was one major factor that I forgot to account for though. The hard truth is that humans aren’t great at sacrificing without some kind of rewards. The reward for my months of skrimping last year was a home for my family. And I know that being debt free will be a huge reward in itself – a giant, decades old weight off my shoulders. But that alone wasn’t enough to keep the frugal ball rolling. The reality of the last few month slowed down my progress, but has given way to a more balanced lifestyle.
When I bought my house it didn’t come with a washer and dryer. I had budgeted about $400 for a used set, but several weeks of searching left me with a huge laundry pile and nothing to wash it in. I eventually gave in and bought a brand new set on sale for $1000. I’m happy with how it worked out, even though it cost more.
I also went a little bigger for Christmas. I wanted my kids first Christmas in our new home to be memorable. That doesn’t mean they got a Dudley Dursley sized pile of presents under the tree, but it was definitely a bit more than usual. I also went quite a bit overboard with food for the holidays. I had 9 people for dinner and cooked way more than needed as well as stocking my baking drawer with every ingredient I could think of.
The other main splurges were all for the house. My old sectional sofa was way too big for our new livingroom, so I sold it for $300 and replaced it with a smaller one for $600. I added a large print, a mirror, some cushions and a few plant pots to create a living space that reflects my style and I love spending time in. I didn’t have to, but those small purchases helped turn our house in to a home.
My goal of $1000/month flew out the window for a few months. But knowing that I could easily handle my expenses and maybe a little something extra sometimes, reduced my stress significantly. Unfortunately, a health issue had been building over all those months that made it increasingly difficult to do my job. I took an unpaid week off and cut back to 4 days/week on my return. And I liked it a lot!
Working less made me want to work even less. I liked the extra time with my family, and losing a few hundred dollars a month didn’t hurt as much as I thought it would. I did some math (cuz that’s what I do) and figured out that I only NEED $600 in employment income to stay afloat.
This really got me thinking about what kind of life I want to live. What do I really want more of – time or money? Do I want time with my kids while they’re young, or money to help them go to college. I’m still not sure what the answer is, but for right now I’m doing what I can to balance both.
In the last three months I’ve gotten back on track with my debt goal. After getting a few splurges out of the way, I’ve returned to my natural frugal ways. And as of my last pay day my credit card balance is down to $6000! I’ve adjusted my target date to January 1st 2022, and barring any emergency I think it’s pretty doable.
I have also recently become very interested in how a person in my situation can begin building some wealth for the future. While retiring early with millions in the bank may be a little out of reach at this point, travel has always been a passion of mine and I hope to live abroad when my kids are grown. Entrepreneurship, investments and home equity are some of the tools I hope will get me there. I’ll be exploring these topics further over the next few months and sharing what I learn. My hope, as always is that something I write inspires another person to take some action and improve their own financial health.
I will be sure to check in again when I get to $3000, and you, my reader, will be my accountability. I can’t wait to share more of my journey as it unfolds, and prove that it’s not how much money that matters as much as what you do with it.