Getting Financially Fit

As you know, this blog is to track and motivate paying off our student loan debt. We are in a decent financial situation and I would like to talk about how we got to this point.

Throughout college, my husband and I, didn’t really follow a budget but we didn’t spend much money either. We followed and stuck by our budget strictly our final year, and that made us wish we had started earlier. We ended up putting away almost $8,000 dollars or something like that, over the whole school year.

We took out more than we ‘needed’ to cover our tuition our last year as well. We, both, had a full time internship that we had to do and it made working hard. Our university actually gets really mad when you have a job during your internship year because you aren’t able to devote the time necessary to your classes and your internship. Which is true, but bills still need to be paid.

Like I was saying. We took out a little more to make sure rent and food would at least be covered. We put the extra loan money straight to savings. We took our summer paycheck leftovers, and our regular paychecks during the school term and budgeted that first. Then filled in the gaps with our extra loan money that was in savings. It ended up being that we didn’t need much of our loan money. There were a few months where we did, but we were both surprised we didn’t need to dip in as much as we had anticipated.

We were actually able to add to our savings most months. Now, it wasn’t anywhere near what we put away now. It was a few bucks some months.

Between graduation and me moving back home while my husband was gone for the summer, we kind of blew the budget. Over the summer I worked really hard to get us caught back up. Which was really hard. I really didn’t want to touch what was in savings, and I did my best. However, to get us living off last months pay, I did have to dip into the savings.

Now, I understand that not everyone is going to have savings to dip into, to get to the living off last months income point. So, if that is a route you are looking to take here are a few tips.

  1. Cut or reduce bills (cable, cell, etc).

Okay, easier said than done I know. But, lets say you are up for renewal. If we were to drop our Verizon phones and go to a prepaid network like Ting (currently what we are thinking about doing) we could save about $30 a month, if we downsized the amount of data we use. Would you be able to save if you switched to a prepaid service? Do you use your cable? Would you be okay cutting the cord and going to Netflix and Hulu streaming? We have never had cable due to the cost. The savings here is small, but compounded over time it could help you reach living off last months income.

2. Windfall Money (taxes, gifts, etc)

Come tax time (it is almost here) you could take your tax refund and apply that to your buffer. The holiday season is also coming up. If your family is like ours they insist on gifts but aren’t sure what to get the adults, so they gift money. Those little unexpected events could help reach your goal. I think our tax refund would fully cover the buffer for living off last months income.

3. Sell Stuff

Okay, so I hate when people say work more hours, get another job, sell your stuff. But, we all should take the time to downsize every now and again. If you haven’t now may be the time to consider. Facebook is a great selling tool. Just search for your local yard sale page and start posting. I am the brave/creep that meets at my house. Mostly, because when I downsize I am in the process of packing and moving so I post as I come across stuff that I’m packing. I don’t really recommend this as it isn’t safe, but it is convenient. I don’t let the people in my house we meet at my door. Obviously, for safety reasons it is advised you meet in a public place. If they want to meet in a dark alley, don’t. That isn’t normal.

Wednesday I will talk about why I like living off of last months income. I hope you have a great start to your week. I’m exhausted.

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