Five Months into Budgeting, COVID Hit

This is the seventh installment of Krys’ story. We’re following along as she starts budgeting and works to pay off $20,000 of debt. This post was originally written at the end of March 2020: after Krys’ fifth month using YNAB. 

See the rest here:

• Day One
• Day 24 
• Month One
• Month Two
• Month Three
• Month Four

This month has been wild. Coronavirus has been wreaking havoc on the global markets and our retirement plans. I’m worrying about my parents' and in-laws' health. My little girl is growing up and turning 11. My husband is growing up and turning 50.

All of this made me long for more good news. So, I cashed out some savings in order to quickly pay off my medical bills. That was NOT the plan, and it was not well considered. I don't feel any better, because it took cash away that I hadn't planned to give up, and I really don't like how I feel now.

It's all going to be fine, I'm sure, but I do wish I'd stuck with the original plan. It was going to get paid off in a couple months, but now I have to wait a couple months to replenish the savings we had, and that feels like an uncertain future, especially as the pandemic grows and causes major disruptions to people's lives.

I honestly didn’t know why I did it when I was doing it. But I spent a few days reflecting, and I realized it was the culmination of all these big events at once. I needed to feel in control of something.

I should have just baked a cake.

Status on Financial Goals

1. Get off the credit card float. ✅
2. Start contributing to sinking funds for known expenses. ✅
3. Start building the $1,000 emergency fund. ✅
4. Pay off the first credit card (credit card float/car repairs).  ✅
5. Pay off the second credit card (medical debt).  ✅
   PAID OFF. Whaaa? I swallowed hard and paid this off with savings earmarked for college for our daughter. Original target payoff date was November 2020.
6. Get one month ahead (age our money 30 days).  ✅
7. Pay off the home equity line of credit (HELOC) that we took on to replace our window.
   This is priority #3 on the debt snowball. Target payoff has moved up to August 2020 (from November 2022).
8. Pay off the car loan.
   This is priority #4 on the debt snowball.

Update on Debt

• November 1, 2019                $19,169.50
• March 31, 2020                    $11,719.69
• Difference                           -$7,449.81

This year alone, I’ve paid down $4,076.15 in debt. My goal is to pay down $6,750 by the end of the year. We are 60% done, which is WAY ahead of pace. When I originally started with YNAB, I figured we had a few years of debt ahead of us. I'm shocked at how quickly that has changed! With careful management of our finances, we will be out of debt YEARS ahead of schedule. I am amazed. 

I Wanted a Win—and Now I Regret It 

When the world was feeling out of control, I took money earmarked for college for our daughter and paid off our medical debt. However, as soon as I took that money and paid off the debt, I immediately felt exposed. The money had a job, and I liked the job it had. It was probably the RIGHT job for that money. I had a plan and a timeline I was comfortable with.

EXCEPT...People were panicking about toilet paper. About drinking water. They were buying up all the canned soup. All the hand sanitizer. The soap aisle was bare. The world was losing their minds. The problem was that I wanted to feel control over something—anything. So I grasped for a feel-good moment. A “win.”

I should have prayed for patience instead. Or baked. Or even tried out some new makeup or something. Anything other than changing the plan that felt right.

What’s Next

We ended up qualifying for a larger tax return than I originally thought, so I put back the money into our savings account right away, and now I can stop feeling so guilty about paying off the medical bills (I mean, who feels guilt over something like that?).

We’re keeping an eye on the state of emergency and being flexible about changes that take place as a result of that. Be smart, stay informed, and remain calm. We've got this.

Age of Money 

Age of money: 40 days

Summary

The world feels like it is burning down around us, but we are safe and have toilet paper.

 With the uncertainty caused by COVID-19, I’m glad to have this budgeting tool and method. It has alleviated the stress I’ve had around money. While I worry about my family’s health and safety, that concern isn’t compounded by financial insecurity.

I also know that when I make a mistake, the path back to sanity is a short one. All will be well.

Stay healthy, my friends.

‍Krys is enjoying working from home during the lockdown, because she loves spending time with her husband, daughter, and three pets. She’s been using YNAB since 2019 and has been documenting her journey in paying off almost $20,000 of debt. When she’s not budgeting, she enjoys reading, watching Marvel movies, and learning new languages. She also possesses a fierce love of bacon and sarcasm.