Sep 30 2008

A ‘debit card diet’ and paying off our car


I’m going on a debit card diet. I  truly prefer using my debit card for just about everything. I like the convenience and it’s nice that all of my purchases are tracked online. Plus, my debit card has a rewards program where I earn points that I can use to get gift cards for various retailers. It’s nice.

But. I think I probably spend too much money. I probably spend more at the grocery, since why not? There’s money in the account. I stop for a quick snack while I’m out running errands. I’m sure I do this a lot more than I realize, even though the evidence is right there in my online bank statement.

I’ll miss out on about 800 points (maybe more, if I would have earned some bonus points). That’s the equivalent of oh, $1.50 on a $10 gift card. No biggie.

In an attempt to rein in my spending for October, I decided to go cash-only for all of my purchases except for gasoline. Why not gas? I dunno. I like paying at the pump way too much, I guess.

I calculated how much I’ll likely need to spend on groceries, laundry, clothes for myself, trips to the drugstores, and other odds and ends. Shane’s parents are visiting in mid-October, and my parents and sister will come over toward the end of the month. I’m adding extra to my grocery budget so I can make sure we’ll have plenty of food on hand.

In all, I’m allotting myself $400 to cover all of these things. It sounds a bit high, but I don’t want to run out of money at the end of the month. I need to stock up on groceries and toiletries, and I think this amount will allow me to do that. If I come under budget, I’ll put that money toward our car loan.

Our next step: Paying off our car

Speaking of which, our “baby savings” fund is now complete! We have money in a savings account that we’ll use to buy a crib, mattress, car seat, and whatever else we want to buy before our baby is born. I imagine we’ll put money in that fund each month after he’s born so we can stay on top of diapers and other expenses.

Now that we have our six-month emergency fund and our baby savings pulled together, all of our extra money will go in a savings account. Each month, I’ll take that money and send a check to our bank. That’s the only way I can make sure the money is being applied to the principle of the loan. It stinks that I can’t just do it online, but whaddya do?

I’ll keep track of our loan progress in my sidebar. It’ll include our regular monthly payment of $277 plus our snowflaked amount. We took out $11,500 back in November 2007, and it’s now at $9,299.

I hope we’ll own the car outright in one year’s time. It’s an ambitious goal, but when I remember how quickly we were able to get out of credit card debt and set up our emergency fund, I think we can reach it. Let’s see how this’ll go!

Photo: I took this of my $400 minus $39.xx I spent at the grocery today.

3 Responses to “A ‘debit card diet’ and paying off our car”

  1. Congratulations on reaching your baby fund goal. I recall feeling relieved when we had set aside some money for baby items and then was pleasantly surprised when we received help from family for some large ticket items. We also were blessed to have great friends that gave us some gently worn outfits and toys. We now enjoy passing those same toys on to friends having new babies. So much fun to see many families benefit from it. Will you be starting a college fund?

    Scott @ The Passive Dad’s last blog post..Free Creative Ideas to Help Friends Facing Foreclosure or Bankruptcy

  2. Thanks! It has come together much faster than I thought.

    We will be starting a college fund, though not right away. We need to pay off our car first, and once that’s completed, we can hit Dave Ramsey’s baby steps 4-6 (college fund, saving 15% for retirement, saving for a house) with full force.

    I’m hoping we can be at that stage within a year’s time.

  3. Congrats on completing the baby fund! I can see how limiting yourself strictly to cash could make a difference.

    Mrs. Micah’s last blog post..Bailout Passes in the Senate

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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