Milestone, taxes, and general ramblings
Today is a great debt day! I paid off my second to last debt and only have the SBA loan remaining. Whoo hoo! It’s an exciting moment to finally get to that point.
On top of paying the final $654 on my last remaining credit card/loan, I also just got my $880 tax return back, which I immediately paid towards my *last* debt, the SBA loan, bringing the total under $27K! Fabulous day indeed!
February is a bad income month, since it is so short. I also forgot to put in my hours for one day so my check from Monday is short a day! I wasn’t too horribly upset, since the next check (after the end of February) is only 9 days!!!! So an extra day of pay (a paycheck late) will be more than welcome when it comes time to pay rent and bills.
Still maintaining bringing lunch every day to work! I have gone out once this month, but that was a planned-in-advance activity, so I am going to include that in my restaurant spending.
I also have a very sizeable check coming my way in a week or three from a settlement. I’m involved with a 2-part lawsuit due to a bunch of accidents I was recently involved in the last few years. I haven’t ever spoken about them, but I should be getting about $7K, which I am going to pay towards my debt. Even though I’d love to go to Europe. Even though I’m bemoaning the fact that my truck has such sh*tty mileage and I want to get another Subaru outback. Nope. Not going to do anything but pay debt. Even though I really really want to do something else! I may have a big splurgy dinner out. Once. But that’s it.
Nothing else to report from the maven household. Working. Going to the gym (a lot!). Cooking at home (a lot). Not much else!
Stay warm everyone!
Chipping away at the debt
I just paid off the third of my remaining debts. I had to pull a little from my EF this month to keep on track, but I felt it was worthwhile to continue my momentum with J’s continued unemployment and reduced rent payments (since March!). I paid off my BECU personal loan, with an 8.9% rate. I just sent in my final $599 payment!! Now onward to my penultimate debt, a $1900 BECU bank credit card (at 6.9%). Once that is paid, which I will have done by February 2011, I will only have one last debt to plug away at. I am really excited and energized about that.
My last debt is an SBA loan, $27,713 at 5%. It’s such a small percentage that I know I won’t have to shop around and find crazy ways to reduce my interest rates (no more reading fine print on those 0% offers!). Just the one debt, nice and easy. It will be relatively straightforward to only have one single payment to do per month. That’s it! It’s like getting a debt consolidation. I can’t wait, the end of the tunnel is in sight.
I have continued to plug in some savings in my mini-funds. I’m doing well on my gift/xmas fund, and am back to a good strength for my vehicle (now I’m just waiting for the next major blow-up). My kittens were both sick this month, so had some tests and expensive medication to pay for, so that was a wash (monthly savings = money due the vet). I bought a bunch of clothes this month too, getting ready for winter, but am keeping it pretty inexpensive.
I did get a stupid driving ticket (not using a turn signal to change lanes, how lame is that), which was totally bogus, so I am going to try to fight it in court. No payment due yet. Other than that, running things pretty lean. Spending a lot of time at home, downloading ebooks or working on the internet, so no big entertainment budget. Food as always is my largest and biggest expense, but haven’t done too many trips out to restaurants.
Yeah, I’m doing well, and I finally went under $30K of debt, I’m in the twenty nines now, and boy does that feel good!
Calculating my debt free date! Wow.
For fun, I tried calculating how much debt I’ve been paying per month, on average. I then extrapolated with my remaining debt, if I kept up the same debt payments going forward, when I’d be out of debt. See my (really intriguing) results below:
To date, I’ve paid off $13,892 in debt.
While my starting date was Oct. 2008, I didn’t actually start paying off debt until January 2009.
This makes the number of months of debt payments 20 (not 22 as it might otherwise appear).
Thus, I’ve paid $695 per month towards debt since I started.
I have $31,225 in debt remaining to pay.
Divide that by a continued assumption of paying $695/month in debt and I get
44.9 months of debt payments remaining
That’s 3 years and (rounded up) 9 months remaining until I’ve paid off all my debt.
3 years & 9 months from now is May 2014.
Wow. I’m totally on track!!! How did that happen?
Slow and steady wins the race
Regardless of how quiet I’ve been on this blog, I continue to chip away at my debt. My disposable income seems to have shrunk a little in the last few months, what with the boyfriend still paying a reduced rent due to his unemployment, and my increase in REI purchases the last few months. But I’ve refocused on paying down debt and am trying to slow down on buying. If nothing else, I continue to pay debt and update my debt stats on the right.
Made a pact with a friend to get out and go hiking every weekend in spring, so had to buy a bunch of new equipment that will last me for years to come. New boots, new hiking pants (and all those fancy new non-cotton fabrics) and shirts, and all the camping supplies that I once owned but seemed to go on their own walk-about (I think they did on my last relationship breakup). I think I’ve spent like $800 this summer!!! But it’s mostly over now. At least I already had the tent, sleeping bag, cookware and stove. Not to mention all the extra gas! It’s about a full tank of gas every time I go, so $30-$40 every other week. But it’s been worth it to get out in the woods for a serious dose of triple oxygen for 6+ hours one day a week.
My car broke…again. Some really expensive Nissan part, diagnostic, and labor. $788. That was way more than I had in my car fund, so half of it came out of debt payments (I didn’t need to hit the emergency fund). This is the third time my truck has broken since Thanksgiving. I wonder if it will continue being so expensive? I do a lot of driving with it, luckily it’s all been when I was close to home, and not 2 hours from Seattle on a forest service road with no cell reception in the middle of the mountains, which is definitely a concern! I don’t want to, but I think I have to increase my vehicle fund savings from $100 to $150 for a while.
I finally managed to have a yard sale. Made $350 and promptly put it in the bank and paid down debt. We’re planning on having another one in a few weeks, now that we’re finally clearing through all the piles of stuff in our basement storage disaster. I also have a bunch of higher ticket items that I need to sell on craigslist/ebay, since they will all sell between $50-$500. That’s definitely too rich for a garage sale, plus many of the items are pretty specialized.
I did a photo gig about 3 months ago for a company that wanted photos of their staff and office shots to redesign their website (which replaced really bad stock photos). Finally got paid $500 for that, and of course, it went straight towards debt. Not something I have done before – a good friend talked me up to her friend (who eventually hired me), since I do photography and well. But I had never done people or any type of photo shoot like this (I do fine art that does not include people!). This seriously pushed me out of my comfort zone, but the results were quite nice, and I got paid a bunch, so bonus!
My computer broke last week – the port where the power cord plus into the laptop broke off inside and I couldn’t charge it. Ugh. $208. Not expecting that. 1.5 years old, too. It’s annoying when all these things happen when it would be so much better if they didn’t! To think of how much debt I could have paid off instead?!
Either way, I’m sticking to my slowed-down schedule of debt payoffs. Hard as it is! It’s a process, a long one, but I’m getting there. I don’t think it will happen, but I’m pretty close to only havine one debt left (by February/March next year) and be under $30,000. I think when I make it into the 20Ks, I’ll really feel like it’s manageable. I’m definitely on track to meet my deadline, and who knows what will happen in the future?
A big debt payment & progress check-in
Well, as of today I have passed the quarter mark for debt paid! I am a wee bit over 25.5%, so I rounded it up to 26%! I feel good – I had enough of a surplus this month to pay $600, RIGHT NOW. The month isn’t even over, so I may be able to squeeze in a few hundred more prior to my first paycheck of May.
I had an unexpected $253 payment arrive this month. A prior employer from 10 years ago had been bought out for a lot of money in cash. There was a small amount still in escrow, which finally cleared. I was recently contacted by their accounting department to update my address (though FaceBook of all places!) which is how they were able to find me and send me my missing money. So I did what any good snowballer would do – I immediately put it towards debt. All of it.
That extra payment helped make up for the measly 1% paid off last month.
So… time for a check in with my debt progress so far. I have a goal of my birthday, May 2014, 5.5 years from starting my debt plan. I had gotten off to a slow start, which is what happens with most people. I had to set up a budget, get used to limiting my spending, and at the same time, create a cusion in case of emergencies. Building up a $1,000 emergency fund while very necessary to being successful to staying on budget and not creating new debt, is not the bam/wow/amazing beginning we all wish for. It can be a little demoralizing, to SAVE before you pay off any debt.
So I’ve been paying debt off for 1 year and 4 months (even though my blog started in October, I didn’t start debt payments until January). I have paid roughly 1/4 or 26% of debt. If I triple the time I’ve taken, 1.33 years x 3 more quarters to go, that equals 4 years. If you add 4 years to now, that is April/May 2014! That’s pretty darn amazingly close to my deadline!!!!! As I’ve just illustrated, this means I am completely on track!!!!
Now I still don’t feel self-congratulatory or anything. I still feel mired in debt. But it’s important to realize that hey, I’ve already paid a third of what I have left to pay. I’ve gone from $45K in debt to $33.5K. That’s pretty darn cool!!!
April is feeling like a good month. My money issues are clearing up, I’m back on my debt payoff track, it’s spring, and regardless of anything that’s happened to me recently, I’m still moving forward. It may sometimes be the speed of molasses, but sometimes it becomes a sprint!
Stay focused everyone!
Great progress this month – line of credit paid in full!
Today I paid off my personal line of credit with a $1,000 payment!!! It was my highest interest rate debt at 10%. Now, I’m left with $29,582 in my SBA loan, which is at 5% and about $5800 on my US Bank card, currently at 0%. I’ve been very careful this month with spending, and I was lucky enough to have 2 very nice paychecks with a lot of overtime. Going forward, I will dedicate myself with sniper focus on my SBA. In a way it’s a nice feeling to know that you only have to concentrate on one debt. I don’t know how people with a gazillion cards do it. But then, in the past I’ve only had 2 credit cards at most at any one time (now I have 3 but that was just to get the 0% interest rates; I did it intentionally, never used them except as a way to reduce interest, and have been paying them back steadily).
I should be receiving my $792 back from the IRS by early March. I think I will put $300 into my emergency fund to top it off back to $1,000. The rest I’m debating throwing at the SBA debt, or possibly saving it for next month’s expenses. I will have a fairly large expense in the next 3 weeks; we are building raised garden beds and will have 6 cubic yards of compost/soil delivered, which should be about $240. Add in the purchase of fertilizer and soil ammendments (we will have a lot of growing space to deal with), I’ll say it will be $350-$400 that J and I will have to split. To add insult to injury, my next paycheck will be extremely tiny. Not only will it only be a measly 9 days, but due to a 3-day management seminar work is sending me to, I’m losing 2 days of OT – both days that I stay late to close the building – to the tune of about 4 hours. So this paycheck will be a full day and a half smaller than usual.
I also updated my mini-funds a few days ago. Overall, this has been a good month for progress, great for making up for the past 2 months of much more modest gains.
Actually
Almost 1-year, am I meeting my repayment goals?
I began this blog, and a budget, in Oct. ’08, but I didn’t begin paying down debt until the start of 2009. As the year comes to a close, I decided to do a check-in to see if I’ve stuck to the plan and am on track to pay off all my debt within my planned 5.5 years.
I originally planned on my debt repayment journey taking a full 6 years, but thought I could do it by my birthday in May, instead, so I shortened it to 5.5 years, as an arbitrary, but hopefully realistic goal.
If I divide my initial debt, $45,765, by 5.5 years, that comes out to $8,237 per year, or just over 18%.
It’s funny, I recently updated my No Credit Needed chart, and thought, hmm, looks like I’ve been doing pretty good so far – the pie wedge shape that is “paid” seems pretty large (it is 16.18%), which is completely opposite of how I thought I’d been doing! I had fallen off the budget bandwagon for 2 months earlier this year, so thought I was seriously behind. I’ve only paid off $7,500 so far this year and had been thinking how poorly I’ve done.
Turns out I’m pretty darn close to where I should be. I’ve done better than I had realized.
I don’t know that I can completely pay an additional $737 (the remaining balance I need to pay to meet my 18% goal) off before the end of December, but I will be very close! I could always raid some of my mini-funds/emergency fund to pay it all and reach my goal, or maybe I’ll just let it slide. There’s a chance I might actually get a small bonus from work (we’re on the edge of making it!), so I may be able to make up any lost ground in January.
I’ll do a follow-up post beginning of January to fill you all in on my progress and the final result.
Changes to debt sidebar (Discover card added)
I’ve added an additional credit card to my list of debts, but don’t worry, I’m not planning on spending more! This is a new card I got for the 0% interest rate. I had a $5000 limit, so I transferred $4,800. With their 3% transfer fee, that adds $144, for a $4,944 total “new” debt.
This resulted in a large payoff on the Line of Credit – It’s now at $8,988 due! That also drops my interest payments from $115 to $75. I’ve estimated that it will save me over $300 to do the transfer, so I’m not that concerned over the $144 charge.
I do know that my minimum payments will be 4%, so I’m going to revise my budget to reflect a decreased minimum Line of Credit payment plus an addition of $200 for the Discover Card. I will pay the minimum on the Discover card, and apply all extra debt payments to the Line of Credit. I have 0% interest through the end of the year. After that, I’ll transfer all remaining balance BACK to the Line of Credit, which has a 10% interest rate.
It always seems a shame when paying interest that you pay more than you actually pay off (ie, the privilege of having credit). I wish I could include that extra payment, but it kindof doesn’t count. In the same spirit of paying interest rates, I’m not going to raise my debt total, nor decrease my amount “paid off” on the total debt by that $144 transfer fee charge. I’ll chalk that up to payment that doesn’t count and isn’t tracked in the totals.
Sidebar Updated
Credit payments have been updated on the sidebar. When I make my monthly payments to the Line of Credit, I always have to wait a while to see how the interest will be apportioned (it’s never 50-50 or anything easy like that). January’s payment has finally cleared and been posted. The minimum payments include some interest and some principal, so I don’t want to update the total paid until I know how much I was able to pay it down.
I also realized that my calculations for percentage paid had been listed incorrectly, so I’ve corrected that as well (I was previously too high, but the bar graph was correct).
Debt Balance
Can’t really do a blog about debt without starting with the statistics!
1 credit card: Citibank: $500
1 bank personal line of credit (10%): $14,765.03
1 bank SBA loan (6.75%): $29,851.65
CPA: $1800 (this doesn’t have a due date and I’ll be doing a trade for part of the amount)
Next post: expenses
DebtMaven 