should you save while paying off debt + our budget revealed: debt snowball update (part 2)

Should you save while paying off debt? #warrenbuffet #quote #debtfree #save //

This is part 2 of my debt snowball update. Go here, to read part 1.


I realized two things the other day.

  1. All of my dreams are coming true &
  2. we are now making a six-figure income.


The first is a result of living in paradise (ie. Okinawa). We live right by the seawall. We love our 4 level house. We love our neighborhood where the kids play out in the street or the neighborhood park until it gets dark & all you have to do is yell out the door for them to come inside. I love the people here—both the other American military families whom we meet & the locals. I love the mix of cultures, particularly the blend of Okinawan & Japanese. Island life is slower, it’s more laid back, & we love it. Forgive me for using love more than a half dozen times in one paragraph.

The second realization is sort of, well a surprise.

I only realized what our total income was after my latest budget spreadsheet party & factored in a raise, our rental income, & some extra perks we get for living overseas.

I mentioned to Joseph once, that people in the military tend to be a lot more open to discussing money & pay than civilians.

“That’s because everyone wears their pay on their sleeve,” he responded.

It’s true, everyone’s rank (or pay grade) is clear & present for all to see. There are no secrets, & an O-2 (a commissioned officer) with 2 years experiences is making just as much as every other O-2 with 2 years experience. There are no end of the year bonuses, there is no overtime.

So we’re open about talking about our pay–money doesn’t seem to be quite a taboo topic in military circles. You want to know how much anyone makes in the military? Look at their stripes & find it online. It’s all public knowledge.

I say this, because even though this is true, & even though I do want to be open about our debt snowball progress, & our budget, there is still a part of me that’s like, “don’t talk about money, that’s shameful.”

But I’m going to ignore that, & talk about it anyway!

As with so many things on this blog, I’m open because I feel that’s the only way for you to get anything out of what I’m sharing. So I’m going to give you some concrete numbers not some vague pie in the sky numbers. Not so you can compare, but only as a point of reference. We’re all in this together—no matter where you are on the financial spectrum, we all want to and can do better.

With that, let’s talk about how I recently happened upon this whole, “we are making six-figures now!” bit of information., which was rather exciting I must admit

Since we moved to the island we realized we now qualify for COLA (cost of living allowance), an overseas stipend that theoretically exists to off-set the costs of living in a foreign country. Our COLA varies from month to month depending on current exchange rates, but since we’ve been here with the high dollar to yen exchange rate, it’s been in the vicinity of $630 a month. Since we live off base, we get a housing stipend & a utilities stipend. Our rent includes all utilities except electricity, so even after we pay our electricity bill we have several hundred dollars left. This effectively gives us nearly an extra $900 a month (like a 10% pay raise!).

(This is all public data, btw–there are COLA calculators online if you are military going overseas & are curious what your COLA might be.)

When we combine Joseph’s base pay, housing & utilities stipends, & COLA, as well as our rental income, that puts us just barely in the six-figures—

Which is FABULOUS for our debt snowball right?!

Yes. No? Maybe.

In my last post, I analyzed our get out of debt progress from the past 3 years & have made some observations. After a lot, I mean a lot of discussion with Joseph, we have come to some conclusions–about our savings rate, our debt snowball progress, & most importantly about our budget & our priorities. Some of which I want to share with you here.

First let me ask,

Should you save while paying off debt?

YES. Yes!!!!!! Yes.

(If you said yes, you are correct.)

Should you invest when getting out debt?

Maybe. I think the answer to this question is more nuanced.

For people like us, we are in our 30’s & we have not yet a dime to our retirement name (save for a small amount in an IRA account). The value of compound interest, particularly the younger you begin, cannot be denied. I can actually hear the clock ticking & it’s not a comforting sound.

For us, after paying off a significant amount of debt (while still having quite a bit remaining) we have decided it’s time to start socking some money away. We won’t be maxing out our IRA’s or TSP accounts any time soon, but we will be putting some aside, enough to get the habit going & get something, anything in those accounts.

Let’s go back to the savings question. 

I have realized that no matter what your income, no matter what your debts, you should always save a portion of your income. ALWAYS.

In my zeal to pay as much as debt as possible, as quick as possible (while still not reaching my own superbly & overly optimistic goals), we saved next to nothing. This has left us “up a creek” so to speak, & we’ve gone further into credit card debt. Sort of counter intuitive to our debt-free goal, right?

Let’s put it this way, while we have demolished nearly $80K of our debts in the past 3 years (our net debt reduction), we also increased our credit card debt by $8K. (So essentially paid off $88K in debt, but increased debt by $8K leaving us with somewhere around $80K net). 2 steps forward, 1 step back is not exactly what I was going for.

The one expense, aside from our food & gas that we have kept constant has been our charitable donations. We have paid a 10% tithe on our taxable income consistently (remember my, should you still tithe when getting out of debt post?—there were a lot of great comments on that one!) & have always been happy about that decision. I am realizing now, that savings should also be at least 10% at the bare minimum (ESPECIALLY when you are digging yourself out of debt–you have got to have some cushion).

I know the canned advice—get yourself a $1,000 emergency fund & then throw every extra penny towards bare essentials & debt.

The thing is, that plan works for a month or two. Then you’re hit (if you’re like us), with several thousands of dollars worth of expenses & your left scrambling.

$1,000 for our family of 7 is not a sufficient amount to fall back on.

And what makes $1,000 the perfect number anyway?

$1,000 might be good for a single person, or a married couple without kids, but not the Von Traps (which we aren’t quite there yet, but close).

Also, might I suggest that there is no “perfect” number, because every situation, & therefore every person & family is different.

We have a lot of kids, which means a lot of things, & I mean a lot of things, could & do go wrong X 7.

Which means we need a lot more than just $1,000 stashed away.

Which is where YNAB* comes in.

(You knew I just had to bring up YNAB again, didn’t you? You’re onto me.)

Particularly YNAB rules #2 & #4—save for a rainy day & live on last month’s paycheck (ie. create a one month buffer of one month’s income).

If we created a one month buffer and actually saved for all those “rainy day” expenses (glasses, contacts, car repairs, broken appliances, trips to weddings/funerals, annual membership fees, etc.) our checking account would have much more than $1K in it, & give us plenty of room to take care of any emergency issues plus just give us some peace of mind.

Moving forward, based on what we know now, we are going to put the brakes (though not totally) on paying our debt snowball so we can build up some savings in order to NOT increase our credit card debt any further.

*YNAB, or You Need A Budget. You should check it out. You can try a free 34 day trial, + take all sorts of really helpful FREE budgeting live courses (they offer several each day, & they’re all online). If you decide to buy, bring joy readers can get 10% using this (affiliate link) link.

Here’s the breakdown of our plan moving forward, in other words, our budget!

Fixed expenses are marked with an asterick.

Everything else is flexible (YNAB rule #3—roll with the punches ya’ll), but these numbers reflect our reality, as in, these numbers support the lifestyle that we have & do currently live. They aren’t just pulled out of the sky, but rather reflect what have done & are doing.

In a word, this is our realistic, honest to goodness budget. Which though this doesn’t look as impressive as some of my earlier budget spreadsheets that were 70% fantasy & 29% wishful thinking, these numbers will work—it’s a moderate, balanced, & most importantly a sustainable approach going forward.

Our Monthly Budget: REVEALED

These numbers are meant to reflect the amount needed annually. Meaning, sure we don’t spend $75 EVERY month on gifts or birthdays, but some months we may spend $200, while others $0.

Spreading expenses out into month chunks, especially those “rainy day” ones is something YNAB stresses in Rule 2.

(Jesse from YNAB explains it beautifully here.)

Essentially, every expense becomes a monthly expense, so there are never any big surprises.

Essential Stuff

Rent                                                      $1950*
This is our fixed OHA (ie. housing stipend) that exactly covers rent. Unlike BAH (the housing stipend for those not living overseas), you can’t rent a cheaper place & pocket the difference. You get what you get (& you don’t throw a fit).

Electricity                                            $200
Varies, but this is a generous estimate of what we will be paying here as ultra-energy conscious tenants. In August, when the A/C & dehumidifier was on 24/7, we paid $265 for electricity. We’re now entering a very pleasant season of the year where we no longer use the AC & have the windows open to let the island breeze keep things cool—hopefully this will translate into a steep nosedive as far as our electric bill goes.

Mortgage principal                         $654*
For our rental property. This is the current month’s number but, it will go up about a dollar or two each month.

Groceries                                            $600
This is the lowest we’ve ever been able to do groceries. A few reasons.

  1. The commissary. I am doing 75% of my shopping at the commissary where it’s said prices are about 30%, on average, lower than a grocery store. With the exception of produce, prices are the same as what you’d find in the states. I didn’t shop much at the commissary when we lived in Texas because it wasn’t close to where we live, but now I’m sorta regretting that decision.You really can save a lot of money shopping at the commissary (sorry civilian folks, you gotta join the military if you want to take advantage of this one!).The commissary carries a surprising amount of gluten-free & vegan foods, including gluten-free bread, all manner of non-dairy milks, veggie meats, & tofu. Mine doesn’t carry soy yogurt or coconut ice cream, but one must make some sacrifices, I suppose.Shopping at the commissary also allows me to use coupons. I can use coupons 6 months past their expiration date (an overseas benefit) & I get them in bulk, already clipped & sorted, for free from the Airmen & Readiness Center which gets them from people who donate to their Coupons for Servicemen Overseas Support program. (So if you’ve ever donated your unwanted coupons to programs like this—thank you!)I use coupons for everything I can, especially paper products, beauty/hair stuff, toiletry items, & of course for food. 10 years ago, there weren’t many coupons for healthy foods. But now I can get coupons for soy milk, almond & coconut milks, gluten-free bread, almond butter, salsa, chips, rice cakes, hot sauce, pickles, veggie bouillon, crackers, Cliff bars, Lara bars, frozen potatoes, frozen veggies, healthy cereals, canned tomatoes & sauce, & lots more.Nearly all the items in my pantry & most things in my freezer were bought with coupons. Also, the commissary is pretty great about putting coupons right next to select products, which makes couponing even easier!

    Essentially my strategy is 3 pronged—buy at the commissary (all goods are already cheaper than elsewhere—by 20 or 30%), buy only things that are on sale (save additional 10-20%) & use coupons (save additional 10-50% or more—I’ve even got some smaller items for free plus a few cents back!). If I spend $250, I expect to have saved $50-$75 or more by using coupons. In a month, I save $150-$250 in coupons alone.

    I get most of our fresh produce from a vegetable stand where I can get bananas, cabbage, onions, peppers, carrots & tomatoes at a really decent price (most other produce, especially fruit tends to be pretty steep). I do miss shopping at Costco & being able to get a huge flat of beautiful plump strawberries for $5 or a crate of juicy oranges for $10, but again, one cannot have it all. There are some foods that I know we won’t eat here because their either too expensive or just plain don’t exist.

  2. There are no Costcos on this island. After some initial withdrawals & some time & space from that magical warehouse of all things shiny, big, & just darn irresistible, I have realized that though Costco has some of the best prices on stuff, it doesn’t translate to actual savings. Because you spend money on stuff you don’t need. (That last sentence was painful to write. I’m still in recovery, obviously.)
  3. We have an extra freezer. I can stock up on things like fruit, bread, juice, veggie burgers, & other things when they sale & stash ’em in the freezer.
  4. And…we use the Blue Cash Preferred card by American Express which gives a whopping 6% in cash back on groceries (but doesn’t work at Wal-mart, Target, Sam’s or Costco). (It also gives 3% back on gas & department store purchases.)You might also want to check out my post: 7 easy ways to save on groceries on every month

Charitable Contributions             $550*
Why I give, no matter what.

Buffer                                                   $500
Once we have our one month buffer, we’ll throw this into our debt snowball.

Debt Snowball                                   $849
For more on what’s in our debt snowball, check out my last post.

Mortgage Interest                           $351*
For our rental property. This number will go down by a few dollars each month. Refinancing to a 15 year fixed, 3.3% rate was one of the best financial decisions we’ve made.

Traditional TSP                                  $287
We are just barely starting this contribution. It’s essentially the military version of a 401K.

I am kicking myself that we didn’t get the ball rolling on this sooner—had we started contributing even $100 a month 3 years ago when we first got in, we’d have over $4,000 in there by now. The TSP is pretty much the best, lowest cost investment option around (has the lowest expense ratio of any investments). Any military or federal employee ought to be taking advantage of this sweet rockin’ deal.

Betterment                                        $250
Investment for short term savings, with the goal being 6 months of essential living expenses. Betterment is automated, customizable investing that is extremely low maintenance, low cost, & requires no minimum balance to set up an account. Extremely easy to use & customize according to your risk aversion & goals.

Kids’ 529 Plan                                     $235
Here’s the thing. I know some people would say, don’t invest in the kid’s education if you are still in debt & if you don’t have your retirement squared away.

I think I may have agreed with this a few years ago, but now, I would disagree. We have 20, 30 or more years until retirement while we have our first child reaching college age in just 8 short years.

The longer we put off saving a little every month for the kid’s college, the less time we will have the benefit of reaping compound interest. We may not be able to contribute much right now (we have 5 kids after all & are still working on our debt snowball), but something is better than nothing, & even $50 a month can really add up over 10 or 15 years time. I have come to this conclusion about savings & investing in general.

We have no intention of giving our kid’s a free ride or paying for their entire education, but we would like to be in a position where we can match funds 1:1, up to say, $10K or $15K.

Joseph & I come from two different schools of thought on this one, but at this point we’re going to work on building some funds for future educational expenses.

Which, if you don’t know what a 529 plan is, it’s like the best vehicle for tax sheltering your money that will be spent on educational expenses (an investment that grows tax free & you can withdraw tax free). Utah’s 529 plan is one of the top ranked plans in the nation & doesn’t require a minimum to start an account.

Property Taxes & Insurance        $114
For our rental property.

Rental expenses                              $100
Repairs & replacements for the rental property.

Gas                                                        $90
We have two small cars here that get great gas mileage. We live only a couple of miles away from Joseph’s work & don’t do a lot of extra driving (you can’t drive that far when you live on an island anyway!). We pay pretty much the same price as we would in the states because we only get gas on base. We bike or walk around our neighborhood, & I bike or walk Salem to her preschool every day.

Birthday/Gifts                                   $75

Christmas                                            $50
This is actually on the low side, but we do get extra income throughout the year for various things which goes towards our Christmas fund. $1,000 is about what we like to spend on Christmas.

Car Maintenance                             $50
This is mostly for oil changes & tires. Any big type repairs will come out of short term savings (Betterment).

Clothing                                               $50
Not much for a family of 7, but Joseph mostly wears his uniforms, I have enough clothes to get me through the next few years. My two oldest wear the same clothes, Amalia, my 7 year old girl hands down her clothes to my 4 year old, & my 1 year old is 1 & doesn’t need very many clothes!

Car Insurance                                    $44
Not bad for 2 cars, eh?

Phone                                                   $44
This is for unlimited talk & text (only in Japan) on 2, old-school flip phones. Can’t beat that price!

Household                                         $40
You know, all the random little stuff like extension cords, tools, bath rugs, towels, & the like.

Technology                                        $35
A rainy day fund to replace our laptop or other devices, when they eventually die. Amounts to $420 a year, which isn’t much, but we did own our $650 PC for 6 years before it died, so this amount is enough to meet our basic techie needs (but definitely isn’t enough to always have the latest Apple products!).

Annual memberships                    $30
Amazon Prime, Dropbox, Clearplay, the Botanical Gardens

Stupid Tax                                           $20
Hey, it happens. Late fees, library fines & other such irritating stupid stuff. Though base libraries don’t have late fines!! Which, interesting/revealing side note—we ended up paying several hundreds of dollars in late fines or for lost books in the 2 ½ years we were in Texas. Still mad about that.

Contacts/Glasses                             $15
I wear contacts & glasses. One of my sons wears glasses.


Dates                                                    $125
You know we don’t touch this one. Dates are the secret sauce to our flaming hot marriage (that & of course, ahem, sex).

Joseph’s spending                          $50

Janae’s spending                             $50

Family eating out                            $50
With 7 people, this equates to eating out or ordering pizza once a month.

Misc.                                                     $15

Hulu                                                      $9


Kid’s Activities

(Remember this post?)

We took a year off from paid kid’s activities, but this year, we decided that our kid’s aren’t getting any younger & they only have one childhood. We want them to learn skills & have talents that they can explore. This period of their young lives is crucial for learning & exploring & though not cheap, we feel these are important opportunities for our kids.

Education, particularly the arts & sports aren’t cheap, but we place a high value on these things & want our kids to experience them while young.

Preschool for the 4 year old        $340
This is an amazing, 5 day a week Montessori preschool that both Salem & I love. I can’t say enough good things about the school, & it really is the bright spot in Salem’s day. (A Montessori school in the states would be at least double what it is here.) This is an expense that will only last for 7 more months, so though a lot of money, it’s only a small period of time to have this expense with some priceless benefits.

Piano lessons                                    $150
30 minute a week lessons for the oldest 3 kids.

Dance                                                   $150
Includes fees, tuition, & dancewear. Like the preschool, dance is a lot more affordable than what it was in Texas. Both of my girls are taking dance, a total of 3 hours a week.

Karate                                                   $115
For both boys to take 3 hours of karate a week. You know Mr. Miyagi from the Karate Kid was from Okinawa right? They are learning the Okinawan style of karate, & love it.

Sports                                                   $60
This is for the my 3 older ones to do 2-3 sports a year (on base).

Kids Stuff                                                $40
All the random little things that kids need.

TOTAL EXPENSES    $8418, or $101,016 annually

Breakdown of expenditures by %

Housing                                               25%
Savings                                                 24%
Debt                                                      14%
(Once we have a one month buffer, this will be bumped up to 20%)
Kid’s activities                                  10%
Charitable contributions              7%
Groceries                                            7%
Everything else*                              5%
Discretionary                                     3%
Rental expenses                              2%
Car                                                         2%
Birthdays/Christmas                       1%

*Clothing, phone, household, technology, annual memberships, stupid tax, contacts

A few last notes on the budget…

Here are some things NOT in our budget:

  1. Medical expenses. All paid by military, thank heavens. (I can’t imagine what our premium would be if we had to pay out of pocket!!)
  2. Iphone or accompanying iphone plan. I know we live in a day & age where everyone believes an iphone is a right, a necessity. But, we don’t have iphones. We love that fact, but more than that, we love the extra $150/month in our pockets.
  3. Internet service. Our rent includes free internet—suwaeet!
  4. Video games. We don’t own any gaming devices of any kind. Of course that’s intentional.
  5. A car payment. It’s pretty awesome to NOT have a car payment.
  6. Alcohol or coffee. We don’t drink or have a Starbuck’s habit to support. Which means more cash to spend elsewhere.
  7. Gym memberships. We can work out at the fitness center on base for free.
  8. Vacations. We live in freakin’ paradise. Who needs a vacation when your home is a resort???
  9. Diapers. I bought a set of 10 cloth diapers on Amazon for $60 when Tyndale was born & they are still going strong. I use disposable diapers when traveling but in 21 months, I’ve spent less than $200 on diapers & wipes (& this includes the cost of my cloth diapers).

The biggest difference between our old budget & our new budget is that moving forward, we are SAVING FOR RAINY DAYS & saving in general.

At this point, I don’t care that it will take us an extra year to get out of debt.

Joseph & I realized that we are no longer students, & we are no longer “just out of school.” We are bona fide adults with 5 kids. A thousand bucks in the bank just won’t cut it.

We need some nice cushy savings as well as an entrenched habit of saving a portion of our income each month.

I used to think when we were in school that we couldn’t afford to save. Then when we were just out of school I thought we couldn’t afford to save because we needed to throw every extra penny at our debt asap. But now I’ve learned that we can’t afford not to save. It’s just plain irresponsible not to have savings in the bank when you are in our stage of life with 5 young kids.

Also, having those rainy days funds will help us not continue to increase our credit card debt (as I explained in last post).

I’m curious, are you a saver? Do you have any money saved? Do you save a fixed amount or percent each month?

Care to share any of your budget numbers or percentages? It’s always more helpful & interesting to others when people comment, so please share! 


Other bring joy posts you might want to read:


  1. Annie
    on December 18, 2015 at 3:20 pm said:

    I found you this morning when someone posted one of your articles on Facebook. I love you already! I’m also LDS, with 5 kids (all boys though, and #6 on the way), and my husband is a SPC in the Army. He’ll leave for OCS soon though. You are awesome- and bold, and you’ve inspired me to look over my finances again and re-establish priorities. I used to be in the camp that said I have to pay off all debt and eat rice and beans and do nothing fun until it’s all paid off (and then save like crazy). But recently I decided that by that time my oldest will be out of the house and I will have essentially missed his childhood to worry about money- so I’m trying to take a more balanced approach, with both money and time (much to my DH’s relief). Thanks for the tips and huge dose of motivation!

  2. Amanda K.
    on October 17, 2015 at 8:58 pm said:

    before contributing to a 529, max out your Roth IRA and 401K. you get better interest returns from those accounts and you can use it for college since money is fungible.

  3. Katie
    on October 17, 2015 at 7:23 pm said:

    Man, you’ve really inspired me to start creating monthly payments for our annual expenses (amazon, etc). You’re really living a full life with your family while still being so responsible with your money. I can’t wait to see your thoughts a year from now!

  4. Alysa
    on October 16, 2015 at 10:23 pm said:

    Just wanted to say it’s cool to hear about your journey and your decisions and why you’ve made them. Thanks for writing. 🙂

  5. Kristi
    on October 16, 2015 at 6:21 pm said:


    I’m a saver and always have been. I’m happy to see that your debt is going down AND you are saving! When I was not in a “career” job for 3-1/2 years, it didn’t really bother me because my 401k was already pretty high and it has just kept going up. My husband has a pension and a 457b and we have an additional Ameriprise account. We were just fine while I was off.
    One of the big reasons I went back was to pay off our house by the seven year retirement deadline, but also to have the extra income for incidentals and kids’ activities and vacations. We had such a great time in Washington state in June! My favorite place in the world. ❤️
    I actually set up two regular savings accounts for us. One that we withdraw from and another that we only add to. The ATM card isn’t even activated to the deposit only account and it really helps my husband because he is more of a spender. When he sees the regular savings start to dip below his threshold of acceptance, he cuts back. It’s really alleviated any money discussions/arguments for us! I also have a five year CD that he can’t see without logging onto the bank website or going there in person. Don’t worry – he knows about them all, he just realized he’s better off not looking at the amounts in them!
    Over the course of our 18-1/2 year marriage, all of those accounts have grown more than I ever imagined. Five years from now you will be very happy you started saving now.
    Oh – I replied to your last comment from the previous post, but it kept giving me errors when I attempted to publish it. I sent it to you in an email. Hope you got it.
    Thanks again for sharing!