Am I on track?

April 25, 2009 at 2:36 pm (monthly budget)

How much do I need to pay towards my debt each month to reach my payoff goal of May 2014? I tallied up the number of months. If I started making payments in December 2008, that will be 66 months of payments. My total starting debt was $45,117. So I will need to pay $684 per month to stay on track.

 

My monthly budget is:

$150 for SBA (all interest, plus a ‘lil extra for an annual fee)

$200 for Personal Line (interest currently $70/month)

$100 for Discover (0% interest)

—————————–

$450 total paid – $170 in interest payments = 280 paid towards principal in my budget.

 

I would need to pay $684 – $280 already paid = $404 monthly extra to stay on track.

 

I am currently paying about $400 a month. I have been wondering and thinking of increasing my payments, since I think I can, to $500 monthly extra.

 

As I continue to pay down my loans, my interest rates will continue to diminish and more of my budgeted debt payments will go towards the principal and thus help pay it down faster.

 

Let’s see how I’ve been doing so far… I’ve been paying down my debt since December. That’s 5 months including April. I should have paid $3,420 to be on track. I have currently paid off $3,357 – that’s $63 short! Not bad! I can still contribute additional money this month, too, as the month is not yet over.

 

I feel pretty good about this. I have saved my emergency fund, I continue to save up for larger yearly expenses every month, and I have bought some dearly needed larger ticket items in the last few months that I couldn’t put off any longer. Even with my restaurant overspending, I’m still doing quite well. I know that if I tighten the belt I can pay it down ever faster! My budget is pretty accurate and my spending is within my means. My debt payoff plan is on track, established, and maintainable. Things are looking good! It could be the spring weather, but it’s always good to check in and see how plans are progressing.

 

Have a great weekend all!

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1 Comment

  1. brainy said,

    Sounds like a decent plan… though 2014 feels like a real long time away…

    But, really, if you do “up” your payments to $500, you’ll find that you’ll start to gain momentum in a hurry… and 66 months will be just around the corner … and likely many many months sooner than you think.

    That’s how it worked for me. Just keep at it — you’re doing great so far, stay focused (it’s okay to splurge every now and then), and try to stay dedicated to the goal.

    You’ll get there *way* sooner than 2014!

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