So far, 2013 has been a year of good fortune for me so far (knock on wood, right?) I’ve had a couple of unexpected jobs pop up that have allowed me to pay down some of the credit card debt I racked up last year and I’m really close to a salary increase of monumental proportions (I’ll have more information on that in the next 3 weeks). I’m feeling a little, dare I say, lucky. Things are finally coming together in ways I didn’t expect, but have worked really hard to make happen.
Of course, with this good fortune, has come hard work in the form of course work and more responsibility. I had to take on some courses to allow me to get that pay increase, something I wasn’t expecting and had to get my head around. I’ve also taken on more responsibility, which means more paper work that takes up some of my time. My time is even more valuable now that I have less of it.
At the same time, I’ve had a few windfalls, per se. Technically, I don’t think they qualify as “windfalls” since I had to work to make that extra income, but the cash flow is helping me get out of credit card debt faster than planned. If I continue on this course or streak of luck, I should be able to pay off my debt by early next year instead of summer of next year.
Becoming debt free faster should also assist me in saving more, sooner. I’m using a few strategies to track my debt payoff, such as Planwise and Quickbooks. The nice thing about Planwise is that it predicts how much I can save once I stop making the debt payments and apply that amount towards my savings, instead. I still have some tweaking to do in Planwise so that it can accurately account for my income and expenses (which is why I use Quickbooks for accounting), but it’s a great tool to visualize how much I could potentially save and what should be sitting in my bank account. However, reality and possibility rarely seem to meet up.
At the end of the first quarter, I should have a better outlook on how the remainder of the year should progress and be able to see how much progress I’ve made tackling my debt. Fingers crossed!
How is 2013 going for you? Have you made substantial progress this year so far?
7 Comments
Great approach. I’ve always used a rule of thumb to apply 25% of money that comes from ‘windfalls’ or other income sources toward paying down debt. Which worked over the past few years to get rid of a car loan and a $200 per month student loan payment. All we have left is one student loan payment ($96 per month) and the mortgage payment, so the focus isn’t as strong here but we couldn’t have gotten to that point without using the strategy you outlined.
@Money Beagle – Since I’m trying to squash out the debt I accumulated last year, I’m putting 100% of the windfall towards debt. One card down, three more to go. 😉
Windfalls are the way to go. I’ve kind of had a few of those this year. My taxes were almost perfect, so I got a tiny refund back without having to pay any (ideally, I’d pay nothing and receive no refund/interest-free loan to the government). And I realized my AmEx card had cash back rewards that I haven’t used.
So far 2013 has been great!
-Christian L. @ Smart Military Money
@Christian L – I agree that it’s better to pay very little in taxes and not expect a tax refund than pay a bunch and get a chunk back at the end. I’m feeling optimistic so far about 2013! 😉
I’ve always tried to take 80% of any windfall and put it in savings or towards getting out of debt, and use the other 20% as a treat.
I’m expecting something of a gigantic windfall soon…. my wife is re-entering the workforce!
Due to the increasing cost of living, and stagnant wage growth we’ve pretty much maxed out on living on a single income. It’s been 9 years, but we’ve cut everywhere we can. We’re at a point now where as little as $1,000 more a month would be an absolute game changer.
But while we’re very much looking forward to the increased income, we’re planning on only living off 10-20% of it and saving the rest. We have no intention of getting back on the debt treadmill!
@Joe – That’s awesome that she’s been able to stay home for 9 years (I’m assuming to raise children – very important). I can imagine it’s really difficult living on one income. Good luck with the new plan!
Yes to raise children (3!) I forgot to make that part clear, lol!
It’s been difficult (more so of late as the kids eat more and wear out clothes more and generally cost more), but it’s been very worth the sacrifice too!