Debt Free Journey | October Update

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October was a big month!

We paid off a BIG DEBT, finally finishing up our extremely stressful IRS Debt!

It did come at the expense of my sanity, but I only have myself to blame.

We were so close to paying it off that I went ahead and emptied out our $1000 emergency fund, some money we were saving for next year’s taxes, and any and all “buffer” money in our home and business accounts.

This made me extremely stressed out for the last 2 weeks of October.

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    Do NOT do what I do! LOL. We ended up barely making it to the end of the month (thankfully we had all of our cash envelope money for groceries and anything else we needed), but it was definitely not good for my mental health.

    The stress I went through at the end of the month had me doubting myself, my abilities, and why the heck we were putting ourselves through this.

    Mindset is a huge battle on a long debt free journey, and something I am always working on.

    Despite all the stress, I think it was worth it because we can finally say we are IRS debt free! Yippee!

    This included cash flowing our 2019 Tax Bill which was due October 15th (and it was big).

    Keep reading for all the numbers for our October 2019 Debt Free Journey update.

    Want to go back to the beginningStart here.

    Don’t forget to check out our debt free journey on YouTube as well.  I’d love to see you over there!

    How much debt did we pay off in October?

    Debt Payoff Total for October:  $7572.32

    Total Debt Paid to Date:  $41,613.32

    PLUS…We cash flowed a whopping $7939 tax bill that was due October 15th.

    We should easily hit $50K by the end of December, which is so crazy considering we couldn’t make rent at the beginning of the year.

    Here is how we were able to pay off $41,613.32 in 4 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 5K Debt Snowball

    How we cut our Expenses by K per month

    Debt Free Journey August Update

    Debt Free Journey September Update

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

    Rent:  $1,328

    Water: $107

    Electricity: $184 (Hoping to see this drop now that it’s getting cool.)

    Home Security:  $60

    Internet: $65

    TV:  $73 (We just found out they are getting rid of Playstation Vue, so this will change soon!)

    Netflix:  $14 (haha, it’s necessary!)

    Groceries:  $500 (This includes cleaning supplies, hair products, deodorant, etc)

    Gym: $22 (we use it!)

    Giving:  $200

    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:  $3358

    Our “take home” income will increase next month. As I mentioned above, the $1500/month that was auto-deducted for our IRS payment plan will now come home (less taxes), since we are done paying them! Woo hoo!

    We are still very much enjoying our smaller home, and low monthly living expenses.

    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 $1542 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.

    RelatedHow to do a Zero Based Budget

    For example, in October we set aside money in our budget for things like:

    • Halloween activities (school parties, pumpkin patch, decorations, candy)
    • Birthday gifts (school friends, family parties)
    • Babysitting
    • Printer Ink (We use HP Instant Ink)
    • Vet appointment

    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 also keep our office on a tight budget.

    Since it’s a medical practice, the expenses are very high, and we have struggled to figure out the best way to budget the 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 do one giant debt snowball, that includes our home and business debt all together.

    October Debt Pay Off

    Total minimum debt payments October:  $4229.87

    Total extra debt paid October:  $3342.45

    Debt Payoff Total for October:  $7572.32

    Total Debt Paid to Date:  $41,613.32

    *We also cash flowed $7939 to our 2019 Personal Taxes due October 15th.

    November Goals:

    Catch up on some bills for the office, since we got a tad bit aggressive on our October debt payoff.

    Now that we are done with our IRS Debt, we will start our traditional debt snowball, paying debt from smallest to largest!

    Our next six debts on our debt snowball are:

    • Hospital bill 1: $135
    • Hospital bill 2: $175.20
    • Hospital bill 3: $214
    • Hospital bill 4: $253
    • Hospital bill 5: $505.01
    • Hospital bill 6: $606.40

    This totals $1888.61. If we pay these off, plus our minimum payments, and catch up on bills in November, I will be very happy!

    Changes to our Debt Payoff Plan for next month

    Something new will happen now that we are done paying our IRS debt!

    We were on a monthly payment plan with the IRS, where they auto-deducted $1500/month from our business account.

    Since, our business account budgeting is still a little more sloppy than our home budget, we will increase our take home pay by $1500/month.

    This will allow us to make sure that this “extra” cash gets applied to our next step on the debt snowball, and doesn’t get lost in the business cash flow.

    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 by Summer 2022, which means we will need to pay off closer to $17,000/month!

    In November, we will continue to work on getting new patients in the office, and I will keep working hard to grow my blog as a source of side hustle 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.

    With the combination of controlling our spending, and increasing our income I am still confident we will do this faster than three years.

    See you next month!

    September Debt Free Journey Update

    August Debt Free Journey Update

    How to pay off large debt fast.  Debt snowball tips and how to stay motivated on a long debt payoff journey.  Debt free journey update. #daveramsey #debtsnowball #debtpayoff
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    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.