Single Girl Slays Debt

Paying Off Tsunami-Sized Debt as a Single Woman

Debt

The Tsunami Situation – May 2020 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of May, 2020. It shows the updated order of debts to be repaid.

May, 2020 debt balances.

The difference between my March and April personal debt balance is $1,386. As I mentioned in my March Debt Report, I made some changes in light of the impact that COVID-19 has had on my business and, therefore, my income. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds.

A few notes about the Debt Report Table:

New Debt Being Attacked – 2019 State Taxes

The debt that is highlighted in green is the debt that I’m currently attacking. For the last few months, that debt has been my 2016 IRS bill. Last month, it became this State tax bill. As I mentioned last month, though I have the money to pay this in full, I decided to go on a payment plan because, again, I feel it best to hold on to cash right now.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans usually go up every month because I’m on an income-based repayment plan. Since the U.S. Government has given us a break on student loan interest and student loan payments (which began in mid-March), the balances didn’t go up. And since I didn’t make any payments, they didn’t go down, either.

Business Debt

May, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my April and May business debt balance is $583. This is about the amount by which I reduced this debt last month.

COVID and It’s Uncertainty

May was a month of little, but still some, progress. With the impact of the COVID pandemic still being as unprecedented as it has been, I think that my decision to hold on to cash was a good one. I know that things will change in the upcoming months. It’s just that none of us can be sure what those changes will be. I’d rather have some cash on hand instead of putting everything on debt right now. I can always make lump sum payments on my debt later.

The Tsunami Situation – April 2020 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of April, 2020. It shows the updated order of debts to be repaid.

April, 2020 debt balances.

The difference between my March and April personal debt balance is an increase of $169. The increase is due to a new debt I have (see below). As I mentioned in my March Debt Report, I made some changes in light of the impact that COVID-19 has had on my business and, therefore, my income. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. That many of my creditors – Navient, Credit Union, 1st Mortgage and LendingClub – agreed to postpone or forebear payments made it possible for me to not stress too heavily about my significantly reduced income. Under normal circumstances, I would have paid all of my monthly payments and made an additional debt snowball payment that would have resulted in, at least, some kind of additional decrease of my debt. That did not happen this month.

A few notes about the Debt Report Table:

New Debt Being Attacked – 2019 State Taxes

The debt that is highlighted in green is the debt that I’m currently attacking. For the last few months, that debt has been my 2016 IRS bill. This month, it became a tax debt I now owe to the State for my 2019 taxes due.

I have the money to pay the bill in full. I decided to go on a payment plan because, again, I feel it best to hold on to cash right now. There’s a lot of uncertainty involved with this pandemic. I feel more comfortable having access to money.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans usually go up every month because I’m on an income-based repayment plan. Since the U.S. Government has given us a break on student loan interest and student loan payments (which began in mid-March), the balances didn’t go up. And since I didn’t make any payments, they didn’t go down, either.

Business Debt

April, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my March and April business debt balance is $560.

Up until a couple of months ago, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

COVID, COVID, COVID

Last month, I wrote about needing to take the month of April to think for a second. I wanted to see how my income looked and also wanted to focus on getting used to living under lock-down. While I’ve now adjusted fairly well to lock-down, the money situation is still shaky.

The Tsunami Situation – March 2020 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of March, 2020. It shows the updated order of debts to be repaid.

March, 2020 debt balances.

The difference between my February and March personal debt balance is $1,504. Typically, the month-to-month difference has been at least $2,000. This month, that wasn’t the case because of the COVID-19 pandemic. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. Under normal circumstances, I would have made an additional debt snowball payment that would increased my paydown amount by several hundred dollars.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional amounts appear as my “Debt Snowball” number in my budget every month.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Debt

March, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my February and March business debt balance is $500.

Up until recently, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

COVID-19 Brings Uncertainty

The COVID-19 pandemic has shaken things up in unimaginable ways. Right now, staying healthy and sane are my primary concerns. I’ve utilized the grace offered by some of my creditors, relieving me of having to make payments in the upcoming months. I did that as a precautionary measure, while I evaluate my income. I need a second to think. I don’t expect my debt balance to go down significantly next month.

The Tsunami Situation – February 2020 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of February, 2020. It shows the updated order of debts to be repaid.

The difference between my January and February personal debt balance is $2,166.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional amounts appear as my “Debt Snowball” number in my budget every month.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Debt

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my January and February business debt balance is $621. I made a $1,500 payment toward the business credit card balance in February (which is why the AmEx card shows a a $8,800 balance), but the total balance across the loan and the card didn’t go down as much as I would have liked because of the fees associated with getting the balance transfer done and the new business loan. This I view as a short-term set back because of all of the money that I will be saving in the upcoming months by having the significantly lower interest rates.

Up until recently, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

Bigger Numbers Next Month

Yesterday, I paid the second installment of the $8,680 HOA Assessment I needed to pay for repair work that our building requires. I have been saving between $1,000 and $1,500 per month toward the payment of this assessment. With that being paid in full now, I can direct those funds to my debt snowball. That will make for a much larger snowball than I’ve had over the last several months. Next month’s debt reduction amount should be much higher. So excited about that!

How did your debt payoff go for the month of February?

The Tsunami Situation – January 2020 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

 
(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of January, 2020. It shows the updated order of debts to be repaid.

The difference between my December and January personal debt balance is $4,210.

The difference between my December and January business credit card debt balance is $574.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional appear as my “Debt Snowball” number in my budget every month.

Estimates

Sometimes, an amount that ends in a “0” or “50” is an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Credit Card

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt. Despite the fact that I make a $1,000 payment on it every month, you see that the balance only goes down by just under $400. The APR on it is 22.74%.

In January, I did what out I set to do, which was find a low interest business loan or credit card so that I could transfer the balance (see Money Move – A Balance Transfer). It’s actually 2 cards because I couldn’t get a credit line on one to cover the full balance. Because of the balance transfer process for each of the credit cards, the balance transfers won’t be completed until next month.

Why Am I Not Discouraged?

I asked myself this question as I was putting together this post. Why am I not discouraged by the fact that the balances of some of my obligations – the 2017 taxes and the student loans – continue to go up every month? After all, the aim here is to consistently reduce my debt. Ideally, every single one of my balances should be going down, not up.

The reason I’m not discouraged is because, despite the fact that some balances are still increasing, others are coming down. And, most importantly, I’m developing and practicing the habits that are going to position me to get out of this Tsunami Situation in which I find myself.

I’m budgeting. I’m reconciling my expenses in connection with said budget.

I’m changing my mindset and paying attention to the money I have and where it is going. Remember, during the period between January, 2019 and June, 2019, I paid almost $1,000 in overdraft fees! I was out of control and not managing my money properly at all. It was ridiculous!

What a difference a year makes. Now, in January of 2020, I feel much more in control. I’m operating intentionally. I’m planning strategically. I’m developing consistency. I’m taking baby steps – literally. I’ve still got a long way to go, but I feel like I’m laying a solid foundation. If I just stay committed to moving forward, the results will come. The results WILL come. That’s what keeps me encouraged.

How are you feeling about your debt free journey? We’re a month into 2020 and . . . how did things go the first month? If you’re feeling discouraged, my hope is that you’ll give yourself credit for all that you have accomplished and the progress that you’ve made thus far.  We have to remember that it’s a process and that it takes time and consistency to get to the other side of this. The thing that matters most is that we will get to the other side.

The Tsunami Situation – December 2019 Debt Report

by

Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 


(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my but am do so now. 

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of December, 2019. It shows the updated order of debts to be repaid.

The difference between my November and December personal debt balance is $1,620.

The difference between my November and December business credit card debt balance is $390.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. All additional funds I have available for debt repayment go toward extra payments on this highlighted debt.

Estimates

Any amount that ends in a “0” or “50” is an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Two Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow to make payments on both the 2016 balance and the 2017 balance at the same time. It requires that all payments be applied to the oldest balance due. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2) Navient Student Loans (Yes, Both!)

The Navient payments for both the Debt Journey Balance and the November balance go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loan big enough to, at least, cover the interest.

Business Credit Card

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt. Despite the fact that I make a $1,000 payment on it every month, you see that the balance only goes down by just under $400. The APR on it is 22.74%. This month, I plan to do with it what I did with my credit cards and find a low interest business loan or credit card so that I can transfer the balance. I’d like my $1,000 payments to go much further than they are.

In December, the first payment on the Lending Club loan was due. I made additional payments on the loan in November, before the initial payment was due, to honor debt snowball amounts that were allocated for credit card payments for November. In other words, I had additional funds that were supposed to be paid on my debt snowball toward credit cards (because a credit card was the lowest balance and, therefore, was the debt that was supposed to receive the debt snowball extra payment). I didn’t want those funds to get lost in the transition to the consolidated loan. I also made sure to make a payment sufficient to cover the origination fee (the fee was $260).

Will My Home Vaporize My Debt Snowball?

by

Audio version of this post, read by the author.

I’m grateful that I have some equity in my condo. One day in the future, I’ll be able to reap the benefits of that. In the meantime, this home of my mine is putting a significant obstruction in my debt free plan.

Condominium Special Assessment

I’ve previously mentioned that my HOA Board is planning to issue a special assessment for the replacement of the roof on our building. Each unit owner must pay his or her proportionate share of the cost of the roof replacement, based on the size of their unit. This wouldn’t be a big deal if I lived in a highrise with plenty of units. Given that our building only contains 14 units, however, the projected cost of the roof on a per unit owner basis is several thousands of dollars. 

When the initial projections for the roof were first presented, I was told that my portion to pay would be around $6,000. At our HOA meeting earlier this week, I learned that my contribution will be closer to $8,200. The HOA Board wants to ensure that we add some financial cushion to account for any construction overages or unexpected costs. As we all know, construction projects typically go over budget and the Board wants to ensure that we don’t end up in a bind to cover the entire cost when it comes due. 

Each unit owner is supposed to be ready by February 15, 2020 with the first half of our portion of the payment; the other half is due 3 weeks later, during the first week of March, 2020.  That gives me 3 months to come up with $8,200. 

That gives me 3 months to come up with $8,200. 

~ Single Girl

As someone who is following Dave Ramsey’s baby steps, I only have $1,000 in a baby emergency fund. In anticipation of the special assessment, I started putting money aside to be prepared to make the payment. I saved $1,000 last month toward that end.  I also reserved some of the money I earned from my recent commission and put it into my sinking fund for home repairs. Currently, the account holds $2,058. In my budget for November, I’ve allocated $1,000 toward savings for this as well. So, as of the end of this month, I should have around $3,000 towards the $8,000 I’ll owe. 

That gives me 3 months to come up with the $5,200 balance. 

The HVAC Unit Strikes Again

Last weekend, I discovered that my HVAC (heating, ventilation and air conditioning) system went out. Completely. The thermostat wasn’t displaying anything and the unit wouldn’t heat or cool. Given the time of year this is, my heat was the main concern. I think that because half of my walls are brick, I don’t experience significant temperature fluctuations.  Plus, we have both electric and gas service in our units. The oven is operated on gas. Gas payments are covered in my monthly HOA dues (which is the same payment every month). So what did I do? To warm my place while my HVAC was out, I’d heat the oven to 450 degrees then open it up and let the heat escape. I kept the oven on for as long as I needed the heat.

In September, the problem with the HVAC was that it wasn’t cooling. I spent $419 ($169 over what I budgeted) getting a short-term fix for that issue. This time, I had no idea what the problem was. My biggest fear was that it had totally died on me and that it would need to be replaced entirely. 

I got a referral from a friend for one of the maintenance guys who does work at the apartment complex in which she lives. Because I’m really watching my coins, I wanted to get as low-cost a diagnosis as I could. If the issue was a major one, I’d then be more inclined to have the work done by a larger company – one that would be bonded and insured and could provide a formal warranty for their work. But, since this was a totally unexpected (and un-budgeted for expense), I needed it to be low-cost. Usually the lower-cost folks are those who do maintenance and construction work as a side hustle to their main gig. 

I was happy to learn that the problem with the unit was a blown fuse. The maintenance guy changed the fuse for me and got the unit back to work. 

Total cost: $100. 

Water Heater

While the maintenance guy was on top of my bathroom diagnosing the HVAC unit (remember, my HVAC sits atop my bathroom), I asked if he could take  a look at my water heater. A couple of weeks ago, the hot water in my shower started acting weird. The water gets hot, but it doesn’t get hot until I’ve turned the lever almost as far as it will go. Then, the water doesn’t stay hot for very long after that. (I’m no Jennifer Anniston, with her 3 minute “protect the environment” showers. I like to take long showers. Fortunately, water is included in my monthly HOA payment.)  

The water heater is on the right side.

The maintenance guy told me that my water heater is on its last leg and explained why my water isn’t getting and remaining hot like it should. He said that, if he were me, he’d replace it immediately. “I’m a budgeter,” I said. “I’m not going to be able to replace it this month.” He thinks I may have a month or 2, at most, before it completely goes out. I’ll wait a little longer. 

Total cost for diagnosis: $20 (plus, I tipped him an additional $20).

The Plan

I have adequate space on my credit cards to cover both the cost of the special assessment and the water heater replacement. Plus, the HOA Board is considering allowing owners who are suffering a hardship to borrow from the HOA reserve fund, so that they have more time to come up with the money.  I’m officially 102 days credit sober; borrowing the money for this in any kind of way is not an option. 

For the HOA assessment, I’m deciding whether to put my debt snowball on hold over the next three months and save the $1,700+ per month that I need to cover the $5,200. It is possible that I may close on a small real estate deal between now and then, so I may get a couple of thousand dollars through that, which I could also use toward the assessment. 

I plan to have the water heater serviced by the maintenance guy who is side hustling because (1) I was happy with his professionalism and his willingness to really take the time and effort to diagnose my problem, (2) I think his prices will be cheaper than most and (3) he thinks he may be able to get me a discount on the water heater. He said that a water heater like mine (a 40 gallon) should cost between $400 and $500. For labor, he would charge me $200, including picking it up for me from Lowe’s, Home Depot or wherever.  Of course, I’m going to do my research on what the water heater and the associated labor should cost before making a final decision. I’ve got to look at the numbers for next month to determine whether or not I should move forward with it in December or January.

Broke + Homeownership = No Bueno

I cannot stress enough that a broke person should not own a home. When these expenses come up, you have to find a way to pay for them. And, clearly, these expenses can be significant. 

Granted, I’m delighted that I have equity in my home. But that equity isn’t money that is accessible. I don’t plan to sell my condo for a few years, so, while (hopefully) my equity continues to grow in the upcoming years, I’ll be paying bills on this place all along the way – while trying to get rid of my tsunami-sized debt.  

Geez, $8,900 could do A LOT for my debt snowball. But, I recognize that life continues to happen while on a debt free journey. I also have to remember – things could be a lot worse.