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Remember that time when we were all just trucking along, and then BAM! Coronavirus?!
Seriously, what a weird time to be living in right now!
As small business owners, this will definitely impact our debt free journey progress, but the important thing is that we don’t get derailed completely.
Believe me, this whole experience has not been easy. I’ve cried, panicked, and totally freaked out, plenty of times.
We are doctors, but not necessarily “essential”, as most foot and ankle injuries and disorders are not emergencies.
However, we do see quite a few high risk diabetic patients, and we have some emergent amputation cases.
This means we are still able to bring in an income, but not enough to continue running our practice at full capacity.
It’s extremely expensive to run a medical practice, and costs us around 20-25K each month just to keep the doors open (this includes payroll for our 4 employees and large debt payments).
Unfortunately, the impact of COVID-19 has meant temporary lay offs, and trying to reduce expenses anywhere possible.
We also picked up extra jobs at Amazon! This will allow us to make enough money to keep our household running, without having to pay ourselves out of the office funds.
I’ve never felt more grateful that we started our debt free journey a year ago.
If we hadn’t reduced our living expenses, when we started all of this, we would be hurting a LOT more than we are now.
If you have lost your income right now, check out this post for tips on how to handle your finances in an emergency when you have large debt.
Before we realized we were going to have to dramatically reduce our clinic hours, we did make some debt pay off progress!
Keep reading for all the numbers for our March 2020 Debt Free Journey update, and our goals for April with all this COVID craziness.
Want to go back to the beginning? Start here.
Don’t forget to check out our debt free journey on YouTube as well. I’d love to see you over there!
How much debt did we pay off in March?
Debt Payoff Total for March: $3528.75
Total Debt Paid to Date: $66,992.65
We had already made our large $1600 student loan payment, before they made the deferment decision as part of the CARES act, but we were able to defer a couple of our very large minimum payments for business loans at our office.
Our plan now is to pause the debt snowball, and pile up cash until all of this passes over!
Here is how we were able to pay off $66,992.65 in 9 months.
After cutting out our car payments, downsizing our home, and getting on a super tight budget, we are able to live on well under $4,000/month. Which is more helpful than ever in these difficult financial times.
More on our Debt Free Journey:
These are our basic “necessary” expenses that do not change (much) each month:
Rent: $1,325
Water: $113
Electricity: $134
Home Security: $44
Internet: $68
TV: $54 (We now use YouTube TV and love it!)
Netflix: $14 (haha, it’s necessary!)
Groceries: $400
Gym: $22
Giving: $250
Dan Fun Money: $100
Shannon Fun Money: $100
Child Care: $320
Contact Subscription (Hubble Free Trial): $36
Health Care: (Health Sharing Ministry) $135
Auto Insurance: $102
Renter’s Insurance: $17
Identity Theft Protection: $13
Total “Bare Bones” Monthly Expenses: $3247
In March we brought home $5689, so we are keeping our household spending well below our means, leaving a nice chunk of change to go on student loans.
All of the extra money is free to allocate to our miscellaneous spending and debt!
We try to keep our miscellaneous spending as low as possible so the rest can go to debt.
We use our income that we bring home to pay off our “personal” debts, and then we also have debts at our medical practice.
The ability to live on less than $50,000/year gives me security, knowing that even if our medical practice closed tomorrow, we could quickly find work to support our family.
Which wouldn’t you know….IS ACTUALLY HAPPENING RIGHT NOW!
Where does the money to Pay Debt come from?!
We own our own business and pay ourselves an income from the monthly business budget.
After taxes we bring home about $6000/month, sometimes more with our side hustles, and sometimes less.
We try to keep our miscellaneous expenses low, in order to pay more debt!
We always plan how we spend extra money…EXACTLY…down to the penny.
Related: How to do a Zero Based Budget
For example, in March we set aside money in our budget for things like:
- Kid’s clothing and dance attire
- Book Fair
- Teacher Appreciation week
- Saint Patrick’s Day goodies
A lot of this got cancelled due to COVID-19, and mid March when the “you know what” hit the fan we put all of our extra cash straight to our emergency fund.
And of course….anything extra goes to debt!
Paying ourselves a simple set salary each month from our business, helps us to control our spending at home.
We also keep our office on a tight budget.
Since it’s a medical practice, the expenses are very high, and we struggle to figure out the best way to budget the super inconsistent income.
The plus side, is that we have a 4 year history of practice financials to go by, so I look at our worst income month, and have reduced our office spending to be about equal to that.
This means that if we have a great month, ALL of that extra money is available to go to debt!
We do one giant debt snowball, that includes our home and business debt all together, but I’m considering changing this and tackling the business debt first.
March Debt Pay Off
Total minimum debt payments March: $3278.75
Total extra debt paid March: $250 (pre COVID-19, I paid this with my blog income!)
Debt Payoff Total for March: $ 3528.75
Total Debt Paid to Date: $66,992.65
April Goals:
- Pause the debt snowball due to COVID-19!!!
- Pile up as much cash as possible to live on, and prepare for our move to our new office.
Our next debts on our debt snowball are:
- Student Loan 2: $
1370.45$1128.33 - Student Loan 3: $2171.64
- Student Loan 4: $2351.37
Changes to our Debt Payoff Plan for next month due to COVID-19
We will not be making any extra debt payments, and deferring any minimum debt payments that we can right now.
Our income is not guaranteed from the practice, and I’m not sure how much we will be able to make working at Amazon.
The best thing to do is to work as much as possible, and pile up as much cash as possible.
Going further in to debt is NOT AN OPTION.
I am exploring all of our options in the CARES Act, which does include “forgivable” loans for small businesses. However, I’m treading carefully as I’m sure there will be many hoops to jump through in order to meet the requirements for forgiveness.
Side Hustle Income Sources
My blog is making money! You can read more about that here.
After working for almost 3 years on building my online business, it’s finally starting to make a profit!
I am now able to contribute $500-600/month consistently to our monthly budget, and that will grow as my blog continues to grow.
Check out my first blogging income report here, if that’s something that interests you!
I have a lot of ideas to grow my blog, and help others pay off debt! I’m so excited to see what God has in store for my blog and our finances in 2020!
Related: How to start a blog, How to Make Money Blogging
Are we on track with our Debt Payoff Goals?!
This might seem like a lot of debt to pay off in such a short time, but don’t forget how much we started with.
Our plan is to be debt free in by Summer 2022, which means we will need to pay off closer to $17,000/month!
COVID-19 will undoubtedly slow down our progress, but I’m hoping that we will be able to make enough money in order to prevent us from creating further financial damage.
It might slow us down, but it definitely won’t stop us!
With the combination of controlling our spending, and increasing our income I am still confident we will do this faster than three years.
See you next month!
- February 2020 DFJ Update
- January 2020 DFJ Update
- December Debt Free Journey Update
- November Debt Free Journey Update
- October Debt Free Journey Update
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hi! I'm shannon
I’m a wife, mom of three, doctor, and blogger! In 2018, I decided to turn my mom blog, into a personal finance blog so others could follow along on our journey to pay off over HALF a MILLION dollars in student loan and practice start up debt. I hope you enjoy following along, and maybe even find some inspiration along the way.
Great share per usual. I’ve only found a small handful of docs willing to share their story, but love your positivity and inspiration. I feel your struggle as I’m dentist-seeing emergency cases only so production is way down and since I’m an employee-I could be downsized any-day. We were just starting to chug along to so it kills me to have to pause. But like you said, it’s not a complete derailment-just a temporary setback. PS your everyday budget is beyond impressive
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Thank you! I’m glad you found my blog, and you will be able to get right back on your debt free journey when this is all over! I just wish we had an end point in mind. I’m going crazy not being able to make any debt payments right now! ha! Thanks for reading!