💸 The Debt Diaries (7): May 2018
This month in money, momentum, and a very satisfying fifth paycheck.
Welcome back to The Debt Diaries.
May was an unusually strong month for us. We had five paychecks instead of our typical four, which gave us extra room to make a larger payment on the Visa, add money to savings, and make progress on several financial goals at once.
I had been looking forward to that extra paycheck all month, and it did not disappoint.
Here is how the numbers shook out.
💳 Debt Overview
Payments: −$250.00
Interest: +$161.15
Ending Balance: $14,764.22
Payments: −$340.00
Interest: +$9.85
New Charges: +$118.93
YMCA membership: $81.60, ultrasound copay: $20.00, and lunch: $17.33.
Ending Balance: $806.44
Payments: −$233.79
Interest: +$17.69
Ending Balance: $5,170.26
Payments: −$171.26
Interest: +$44.57
Ending Balance: $5,842.33
Payments: −$796.56
Interest and Escrow: +$677.54
Ending Balance: $74,004.31
Payments: −$400.92
Interest: +$284.29
Ending Balance: $51,012.24
📊 Grand Total Snapshot
Current Total: $151,599.80
💸 Where the Payments Went
We paid a total of $2,192.53 toward our debts during May.
That means 40.06% of what we paid went toward principal, up from 34.6% in April.
I am happy with that jump. I cannot wait until the number reaches 50% or more, though. Interest is such a money vacuum. We send out thousands of dollars, and a giant portion of it never touches the balance we are trying to eliminate.
✅ Wins This Month
- We made a large extra Visa payment thanks to a rare five-paycheck month.
- We added money to our regular savings account for maternity leave.
- We contributed to Caleb’s preschool savings account.
- The percentage of our payments reaching principal increased significantly from April.
⚠️ What I Struggled With
- We used the Visa for an ultrasound copay and lunch afterward.
- The YMCA membership was still being charged to the card.
- We need to plan better for Wednesday expenses when payday is not until Thursday.
💭 Real Talk
This was an awesome month for us.
In a typical month, I expect us to reduce our debt by somewhere between $650 and $750. May was higher because it was a five-paycheck month, which usually happens only once or twice a year.
I build our budget around the usual four paychecks, so by the time the fifth one arrived, most of May’s bills had already been paid. That made a large portion of the final check available for our financial goals.
Yesss.
We were able to put a good extra chunk toward the Visa and squirrel money away in two different savings accounts: our regular savings for maternity leave and Caleb’s preschool account for his upcoming tuition.
The check was also slightly higher than usual because it was Jerry’s third paycheck of the month. He carries our health insurance, and those deductions come out only twice each month. Since this was his third check, the insurance deduction did not come out.
Another little win.
I am not going to lie: I looked forward to this paycheck all month. I knew we were going to be able to crush several goals with it. The morning it arrived, I immediately started paying the Visa and transferring money into savings.
It made me all kinds of giddy.
The one downside is that we did use the credit card for my ultrasound copay and lunch immediately after the appointment.
Wednesdays are often difficult for us financially because we get paid on Thursdays. By that point in the pay cycle, the checking-account balance can be running low. I need to get better about planning ahead and leaving enough money available for expenses that might come up the day before payday.
I do not love seeing new charges appear on the Visa while we are actively trying to eliminate it. At least we paid enough during May that the balance still dropped by more than $200, but preventing new charges altogether would make the progress much faster.
For June, I am aiming for a more typical debt reduction of approximately $700. May was a rare kind of month, and I do not want to set the next goal based on money we will not usually have available.
Still, dropping the total by nearly $900 in one month feels incredibly encouraging.
We are getting closer.
Explore the full series on the Debt Diaries landing page.
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