Back in October I organized all of the debt that my family has. It isn’t a ton per se, but we do have a decent amount. The two biggest pieces of debt that we had at the time were our a loan for the Disney version of Timeshare, the Disney Vacation Club and our car loan for our 2012 Chevy Traverse.

For the Disney Vacation Club loan, which was a mortgage type loan, we paid off just under $10,000 in 5 months. Now we are focusing on the car loan.

For the vehicle, we started back in October with just over $16,000 that we owed. Now we have a little over $13,000 left. As you can see, we haven’t made as much progress as I would have liked.

Well that’s about to change.

To be honest, over the past few months it’s been nice to be able to spend a little bit more than we normally would have if we had continued going after our debt like we did from October to February. But time for fun is over!

A couple of weekends ago, my wife and I talked about finishing up this loan. The loan costs us over $400 a month. That’s a huge chunk of change to get back on a monthly basis! We could use that for any number of more important things! Luckily, the loan is 0% so we won’t have to worry about interest at all and can make the decision solely based the monthly payment.

So we came to a decision to go back to a really tight budget just as we did with our Disney Vacation Club loan. That way we can really hammer down on it and stay focused.

So what does a spending freeze mean? Well for starters, it doesn’t mean that we can’t spend any money, although that would be a surefire way to get rid of our debt quickly. 😉 Let’s elaborate.

I’ll Be Watching Our Money Like a Hawk

I must admit, over the past few months, I’ve looked at our money less. I did a post on how often to look at your budget back at the beginning of February but I decided to try something new.

As I mentioned, it felt good to be able to spend a little more money than we were when we were focused more on our debt. What ultimately prompted this, though, is I learned that a couple of people I know don’t use budgets at all. While I didn’t want to go that far (yet), I did want to see if not managing my money as much would affect it much. What I’ve noticed is that we have been overspending on some areas that we shouldn’t be overspending on, like eating out.

What I’ve determined is it is going to take quite a bit of work to automate things and probably more income if I ever try to not use a budget. That’s another experiment for another time.

For now, I’m watching my money like a hawk like I did when we paid off almost $10,000 in 5 months.

We’re Rewarding Ourselves When We’re Done

That’s right. I always talk about rewarding yourself when you accomplish either a debt or savings goal so that’s exactly what we’re doing. My wife and I are discussing things that we would be able to do together or something that we want to buy that would bring a lot of enjoyment to both of us. We also are trying to figure out exactly how much we want to spend to reward ourselves. I’ll let you know what we come up with and why in a future post.

Rewards are a huge motivator for accomplishing something. By giving yourself something to look forward to (the carrot in front of the horse), you will be thinking of ways to actually get there. It will force you to think outside of the box to be able to get that reward. The next time you set a goal for yourself, set yourself a reward to go along with that goal right away. It’ll be something like “If I reach this goal by this date, I will reward myself with this thing/experience.” This’ll make it easier for you to achieve your goals.

We’ve Decided to Give Up Some Things

Whenever you decide to focus on debt, you have to decide where the money to pay it off is going to come from. Ultimately, that means looking at your budget and deciding to cut out some fun. We decided that it was worth it to cut out a couple of areas in our budget.

For starters, we decided to not send my older daughter to private school next year. She is going to be going to the public school right down the street from our house. We made the determination that she would get a similar education. Then, anything we liked that the private school was doing that the public school is not, we would supplement at home.

This is saving us about $5,000 for a year of school.

That’s a huge amount of money that can go straight to our car loan. In fact, that’s over one third of our total car loan!

Another thing that we are cutting out a little bit of is eating out. While we were focused on paying off our Disney Vacation Club loan, we were very strict about sticking with our Family Dining Out budget and our Date Night budget, both of which were (and still are) $100 a month.

What’s happened in the past few months though is we have become sort of lax about those budgets. While it’s been nice to be able to go out to eat if we didn’t feel like cooking or just because we had a taste for something, going out is always more expensive than cooking at home. It has not been good for our goal of paying off debt.

We’ve Set a Time for Our Goal

Lastly, we have a timetable set for our goal of paying it off. We have set a goal to pay off our car loan by August of this year. That’s only 3 months away!

I think we should be able to do it. It’s a lofty goal but we’ve designed it to where there is a little bit of breathing room should something happen. The only thing that may throw it off a little bit are a couple of plane tickets we have to buy for a wedding in July. I’ve built in a little bit of money for that. However, if tickets are significantly higher than what I’m anticipating, it may push us back a month.

All things consider, having $13,000 paid off in either 3 or 4 months (at most) is not too shabby!

So yes, as of right now, we are on a spending freeze and I will be doing all the things listed above to ensure that we meet our goal of paying off our car loan. I’ll let you know how it goes!

Do you have any tips for keeping an eye on spending to set a goal for paying off debt? Let me know in the comments!

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