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Wednesday, August 15, 2018
2013 Retrospective and January Debt Check

As usual there are no resolutions for this blog, but we are going to take a look back on 2013 to review how I did with my finances.

I began 2013 owing creditors exactly $144,224.79. It wasn’t bad but it wasn’t too good either. I really didn’t have a goal number in mind to end the year with and so I plodded along just paying the overall debt down.

March 1 stuck and I was not so suddenly but very happily unemployed. While this didn’t halt the debt repayment, it did slow down considerably.vThat was fine because I had planned for it. I had a decent severance  package, an emergency fund, passive income from my rental homes and income from this blog. Combined, it was enough to make me comfortable enough to take six full months off doing what I wanted to do.

I hung out with my family, traveled a little, renovated one of my rental homes’ bathroom myself, evicted a drug dealing tenant, lost 20 pounds and launched a new business. It was an incredibly productive six month months that I wasn’t really ready to end, but when a consulting opportunity popped up I decided to take it since it would last exactly 90 days – enough for me to replenish the savings a bit and pay down the debt a little bit more.

The 2013 year was the me year. The time that I took away from working for others was enough for me to confirm that working for others is not something that I want to do for the rest of my life. Entrepreneurship is definitely in my blood and if I don’t make one more go at it I will regret it for the rest of my life. The thing is that I am now much more cautious then when I was when I started the business that got me into debt in the first place.

I want to be my own boss by age 40. That gives me 4 years and 4 months to my deadline. That has to be my debt payoff deadline because I can’t go into this owing any debt. I am older, wiser and more cautious than I have ever been before. It’s going to be pretty tough but I might be able to pull this off. Let’s check out the debt and then we’ll crunch some numbers.

Jan 2014 debt

Jan 2014 debt

In the past month alone I have reduced my debt by $3,000 by pushing as much money as humanly possible to my debt.  In the past two months since I returned to work I have reduced the debt by over $5,800.  While that’s impressive, it’s not enough.

My contract is due to end on February 7 and I was seriously looking forward to that so that I could either go back to concentrating on my business for a bit or find a job that would allow me to work from home at least one day each week.  It appears as if I will continue to be employed after my original end date, but I am not counting on that being the case since the environment is rapidly changing. I should know more about that in the next few weeks.

The good thing about 2013 is that I was able to reduce the debt by $18,710.94. If I were to project that over 4 years I would have about $81,000 paid off by my retirement date. That will be great but it’s not good enough.  My problem is that I keep making major purchases. The year 2012 had two major purchases (one of which was totally unplanned due to a car accident) which shoved my debt way up. That won’t happen again.
Jan 2014 debt

My original plan was to purchase a new rental home every two years. If I were to stick with that schedule I would be due to purchase a new home in the summer of 2014. That’s not going to happen because I am shifting my focus strictly to the debt.

It’s not that building a secondary income source isn’t important to me, it’s just that if I continue adding to my rental portfolio I will need either more time to manage the rentals or I will need a more solid team in place to take care of everything with the rentals. As it now stands the property manager is kind of lazy, but he is incredibly trustworthy.  It’s hard to find someone with both qualities that also meshes well with my personality. So, no more rental units. Sigh.

If I am going to pay off the debt without additional income I will need to be reducing the debt by a minimum of $2,413.76 every month. I don’t expect that I’ll be able to do that through a job alone, which is why the income from this blog will be crucial.

In 2013 this blog had a net income of $13,070.47. That’s not bad for a side business. If I made the federal minimum wage while working a 40 hour work week, that could conceivably be the amount that I would net from a year of working at such a job. Damn. While I do spend a decent amount of time on this blog per week, it’s no 40 hours.  Plus, I took a trip to St. Louis this year for a blogger conference and deducted that cost from the gross. I don’t know how families are living off minimum wage, but that’s a whole different can of worms.

My expectation is that the blog won’t make as much in 2014 because I am shifting the types of advertisements that I will be taking on the blog. But that’s okay!  I’m looking forward to forming more strategic partnerships that will raise my profile. This can potentially allow me to earn even more money but it won’t be on this blog. Remember there are tons of ways to indirectly make money from a blog. I plan on moving on to the next thing.

If I can make enough from working and combine that with the blog’s income plus a little from my side business, I should be able to make my deadline…I think. It’ll be close but I should be able to do it. Shooting for around $28,000 debt repayment per year is extremely aggressive, but I have done it before and I am extremely confident that I can do it again. The fact is, you can do it too.

With 2013 already in the rear-view mirror, 2014 is shaping up to be interesting. I am starting the year with no plan other than shooting for debt repayment of at least $2,500 per month. That leaves me completely open to new experiences and different things. Who knows if 2014 will be another me year as well. Whatever happens, cheers to 2013.  It’s been fun old friend.

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This messy little blog was all my doing. I started this blog four years ago as a way of keeping myself accountable to my own debt reduction plans. Now I'm using this blog to help others get out of debt as well. Consider subscribing to get more delicious posts like this at least twice per week.

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Jessica @AllFrugalLadies January 11, 2014 at 3:16 pm

Your entrepreneurial spirit is inspiring! I thinking creating the overall goal of being your own boss by 40 is a great goal and it looks like you are well on your way. Becoming debt-free will certainly not be easy, but you seem be well on your way! Best wishes for 2014 – looking forward to reading more!

Tara @ Streets Ahead Living January 15, 2014 at 3:57 pm

I’m sure you can accomplish that much monthly! Good luck with your goal. 🙂

Sher@fatguyskinnywallet.com February 10, 2014 at 12:33 am

You are blazing – even with the employment situation, you had a fantastic 2013 and I can’t wait to see how much closer to your goal this year will bring you!

    Sandy Smith February 11, 2014 at 12:44 am

    Thank you! I was surprised myself but when you’re FOCUSED you don’t even realize how far you’ve come until you take the time to look back. I was pleasantly surprised but so far this year is looking even better.

Daniel November 29, 2014 at 6:17 pm

Disappointing Site. I heard about your site from the Listen Money Matters Podcast. I wish they would do more research about their guests. You brand yourself as the girl who paid off a lot of debt while not being rich like those other people you hear about where they make $120,000 a year and pay off $60,000. I think you are misleading people or just in denial about being one of those rich people. In my book, when you can drop an average of $1500 a month on debt (like you did in 2013) that makes you one of those rich people. My monthly expenses don’t even add up to $1500 including rent and the most I could put toward my debt is $450 a month. I would like this site much better if you didn’t make it seem like you were living along the poverty line and you got out of debt at the same time. You have a great entrepreneurial spirit but growing up broke and getting out of debt while you are broke are two different things. Maybe once upon a time you were broke but I don’t think that is an accurate claim to make on a podcast now. For a moment I had hope that I too, could get out of debt quicker than 7-10 years.

    Sandy Smith November 29, 2014 at 10:12 pm

    Hi Daniel,

    I think that you’ve missed quite a lot about my site and you missed a decent amount about how I paid down my debt too. The guys at Listen Money Matters know me personally, so I think they’ve done a fair bit of research.

    I think that you missed that I was on unemployment which paid a whopping $410 a week before taxes were taken out for six straight months. What I did have were savings which I continued to use to pay down my debt at the same rate while I lived on the lowest amount possible and continued to reduce my debt even further. Sometimes that means living with someone else to split your largest expense (living). It might mean moving somewhere cheaper. I was all about that. I also did everything from watering down juices so that I could spend less to clipping coupons and stalking the sales.

    The rest of my stories are all over this site from the day after I lost my job all the way though securing a temp job six months later. I also talk a lot about having a side hustle. A side hustle isn’t a JOB but it’s about something that can produce extra income. I sold quite a lot of things in my time off. I had a ton of stuff in my attic that I slowly sold off to help pay my bills as well. I sold stuff all over the place to get extra cash and I am willing to bet that you have stuff in your home that you could get rid of too. You know the saying about one man’s trash being another man’s treasure.

    Yes, I paid my debt down at an incredible rate because I positioned myself to do so. I lived paycheck-to-paycheck for a long time, but when 2008 hit I learned to save my coins so that I had an emergency fund in case the worst happened. If you think that there’s nothing that you can learn from me, then you should start throwing your daily change in a coin jar to being saving an emergency fund. I just made it automatic by having money deducted every paycheck into a separate account.

    All in all, I’m still over $100K in debt, my income still supports a family of 3 (plus a dog), I still live in one of the boroughs of New York City, I’m definitely not making a six figure salary (I brought home $550 a week after taxes and saving) and I’m only 4 months into my full-time job. Good luck to you.

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