For the last year and a half, my household has averaged about 1/3 of our income to debt – meaning we live off of 70% of our income, and the rest is applied to our debt. Our debt free journey is different than most. James served in the USMC, and because he is a veteran we receive different benefits. The three that we have used for our finances have been the GI Bill, Disability, and the VA loan (for our home purchase).
In addition to using half of my income, and our roommates rent money, we have used the GI Bill and disability money on debt. This September the GI money is disappearing – which we knew when we began to receive these benefits. In order to make up that loss of income power on debt, James and I have decided to use 100% of my paycheck on debt.
Typically – I put $500 per paycheck on debt, we’d put money away for our sinking funds, and the rest went to restaurants, gas, and other miscellaneous items. Now we are gettin’ serious. We’re slashing our spending and focusing my entire income on debt and sinking funds. This means that we are going from 1/3 to almost 1/5 of our income on debt. I’ll likely put $800-$900 on debt per paycheck and the rest will go towards our savings.
We’ve rearranged the budget to include personal spending, money to support hobbies, and date nights. We’ve cut down our grocery budget and restaurant budget. We’ve never done this before – so I am excited to actually have some money to myself – while still paying off an insane amount of debt!
Our goal is to shave 3 months off and be debt free by 12/31/17.
Keep those fingers crossed, kids. It’s gonna get cray.