Debt Free Journey | August Update

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I can’t believe September is already here! Our oldest son started school in August, so it’s no surprise that the month flew by. The summer was so crazy with all of the lifestyle and money changes that we made, but they have proven to be totally worth the effort. In fact, we have been able to pay off exactly $25,000 in the last 2 months!

One of my biggest insecurities in sharing our debt free journey online, is that people will say, “oh sure, I could pay off debt too if I had a doctor income.” Please, don’t sell yourself short. You can do this with any income! We have not had one significant increase in income since starting our debt free journey in January 2019. So, how did we go from totally broke to paying off 25K of debt in a matter of weeks? This major progress in such a short time, did not come easily. It was the product of sacrifice, hard work, and focus.

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    There are three huge reasons that we have been successful at paying off so much debt in a short amount of time:

    1. Learning to communicate about money as a family.
    2. Making sacrifices and fine tuning our “fun money” budget with cash envelopes.
    3. Cutting our expenses way below our means.

    Do not let your limiting beliefs hold you back from getting started, and making progress on your debt. You can absolutely pay off debt, no matter your income, and no matter the amount of debt. All you need is HOPE and a PLAN. I’ll jump off my soap box for a moment, and get to the numbers!

    Here is how we were able to pay off $25,000 in just 2 months.

    After cutting out our car payments, downsizing our home, and getting on a super tight budget, we are able to live on well under $4,000/month. More on our Debt Free Journey: Half a Million Dollars in Debt Our $625K Debt Snowball How we cut our Expenses by $8K per month Debt Free Journey July Update

    These are our basic “necessary” expenses that do not change each month:

    Rent:  $1,328 Water: $150 Electricity: $200 (Texas summer!) Home Security:  $60 Internet: $60 TV:  $60 Netflix:  $14 (haha, it’s necessary!) Groceries:  $500 (This includes cleaning supplies, hair products, deodorant, etc) Gym: $22 (we use it!) Giving:  $250 Dan Fun Money:  $100 Shannon Fun Money:  $100 Child Care:  $320 Contact Subscription (Hubble Free Trial):  $36 Health Care: (Health Sharing Ministry) $135 Auto Insurance: $82 Renter’s Insurance:  $19 Identity Theft Protection: $13 Total “Bare Bones” Monthly Expenses:  $3449 It’s crazy that we are able to live on so little now!  I used to spend $3,000 at Target every month….kidding….sort of…. The ability to live on about $48,000/year gives me security, knowing that even if our medical practice closed tomorrow, we could quickly find work to support our family.

    Where does the money to Pay Debt come from?!

    We own our own business and pay ourselves an income from the monthly business budget. After taxes we bring home about $4900/month, leaving us $1451 each month to use for whatever other miscellaneous expenses we might have that month. We always plan how we spend that extra money…EXACTLY…down to the penny. For example, in August we set aside money in our budget for things like:

    • Back to School shopping
    • Hair Cuts
    • Noah’s Birthday Party
    • Activities and dinners when my sister in law was visiting

    And of course….anything extra goes to debt! Paying ourselves a simple set salary each month from our business, helps us to control our spending at home. We then are able to do something similar with budgeting our office. Since it’s a medical practice, the expenses are very high, and we have struggled to figure out the best way to budget this super inconsistent income. The plus side, is that we have an almost 4 year history of practice financials to go by, so I look at our worst income month, and have reduced our office spending to be about equal to that. This means that if we have a great month, ALL of that extra money is available to go to debt! We have chosen to do one giant debt snowball, including our home and business debt all together. Total minimum debt payments each month are:  $4291/month We averaged an extra $16,418 on debt from June 22nd through the end of August, for a grand total of $25,000 paid!

    Are we on track with our Debt Payoff Goals?!

    This might seem like a lot of debt to pay off in such a short time, but don’t forget how much we started with. Our plan is to be debt free in 3 years (Summer 2022), which means we will need to pay off closer to $17,000/month! Now that we have worked so hard to decrease our spending, we can work on increasing our income. Our medical practice is still relatively new, and has room to grow.  We hope to double our patients over the next year, which could mean debt freedom MUCH sooner. We also participate in side hustles, whether it’s covering call for other doctors, or my personal favorite (this blog). With the combination of controlling our spending, and increasing our income I am confident we will do this faster than three years. “You have to want your dreams, more than you want your drama.” – Jen Sincero P.S. Do you need help with your budget?!  Grab my free budgeting printables here.

    How to budget and pay off debt fast. Tips from our real budget and how we are paying off large debt fast. Our debt free journey to pay off six figure debt in 3 years following the dave ramsey debt snowball plan. #daveramsey #payoffdebt #debtfree
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    1. Your debt journey is so inspiring! Thank you for being brave enough to share it. You’re doing awesome!

    2. Post

    hi! I'm shannon

    I’m a wife, mom of three, doctor, and blogger! In 2018, I decided to turn my mom blog, into a personal finance blog so others could follow along on our journey to pay off over HALF a MILLION dollars in student loan and practice start up debt. I hope you enjoy following along, and maybe even find some inspiration along the way.