It’s been a glorious month and a half that we’ve been debt free. It took a total of 10 months for us to achieve that status. But all it took was one simple mistake to put us back into debt.
The back story
A few months ago, Mr. Unchained asked for one aspect of our finances that he could take over. For awhile, I declined his requests – it would just get too complicated having him pay some bills and update the Excel spreadsheet. But he insisted that he needed to be involved somehow, so finally I figured out the perfect solution.
Our telecommunication bill has always been a bit of a pain. It’s much cheaper to have one family plan for all our cell phones versus individual plans, but the billing does get somewhat complicated. The main line is charged at a higher rate (e.g. $150) but every additional line is charged at a much lower rate (e.g. $50). The more lines you add, the less each line works out to be. To complicate matters further, if Person A needs to upgrade a phone but isn’t due for an upgrade until later, Person A may use Person B’s upgrade instead. All of the related upgrade charges will now be billed to Person B’s line but will be paid for by Person A. Any overage charges that Person B accumulates would still be paid by Person B.
Every month, Mr. Unchained would forward me the email notification advising me that the e-bill was now ready and I would figure out who owes what. Since this was tedious and time-consuming yet independent (that he could send out the billing information, pay our portion on Visa and I could easily update our Excel sheets accordingly), I asked if he wanted to take it over. He heartily agreed, and we finally found the perfect compromise!
The simple mistake that put us back into debt
Last month, I upgraded my phone. I tearfully bid farewell to my beloved BlackBerry and its physical keyboard and went with the iPhone SE. (Sellout, I know!) Although the upgrade fee was nominal (just over $100), you don’t pay for it upfront. Instead, it gets put on the next month’s bill.
Except this month, Mr. Unchained never received any billing notification!
So imagine my shock and dismay when I found over $432 missing from our bank account! Not only did everyone’s cell phone bill, our internet bill and my iPhone upgrade come straight out of our account but it also put us into a negative balance! Since we normally pay our bill manually with our Visa, I hadn’t budgeted for it until much later in the month. Thankfully, we had overdraft protection which means I only have to pay the interest on it for the time our account was in the negative without any impact to credit scores or anything. I immediately transferred what we needed from our HELOC, putting us back into debt by $400.
Luckily, by Friday (my Pay Day), we were able to wipe out the debt and get back on track with our Baby Fund savings.
Our current financial position
As you can see below, the HELOC resurfaced its ugly head (the red line) for a brief moment. However, our Assets (green line) continue to grow while our Liabilities (orange line) continue to decrease. In fact, I’ll need to change our axis soon as it only goes to $400,000 and we’re down to $402,741 of total liabilities (including our mortgage)!
The Baby Fund
Here’s a close up of our Baby Fund progress. We’re at just over $2,000 and our goal is to hit $14,051.52 before the end of the year. That figure is based on the calculations I made in How much do I need to save before going on Maternity Leave? Overall, we’re just falling just shy of what our minimum savings need to be each week in order to meet our goal. I think some of that has to do with us getting a little lax on our spending! We had moved away from our Crash Cash Diet and had allotted ourselves funds that could be spent on our debit instead, but I’ve noticed a much higher pattern of spending and eating out than when we were on the Cash Diet! As of this week, we’re back on the Cash Diet.