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I can’t believe we are only in our third month of our debt payment plan. It feels like it has been longer because we have made great progress and we are so committed. We’ve never been this committed in the past. We’re still buried, but having a plan helps us have hope because we can see the way out. We couldn’t see a way out before!!
Debt Summary (corrected mortgage 8/24/17)
|Type of Debt||Expected Payoff||Balance|
|Credit Card||2017 – December||$7,235.55|
|Credit Card||2018 – June||$5,935.47|
|Home Equity Loan||2018 – September||$8,395.98|
|Student Loan||2019 – September||$21,746.25|
|Student Loan||2020 – November||$32,499.25|
|Auto Loan||2021 – May||$18,839.29|
|Mortgage||2022 – April||$47,351.22|
|Student Loan||2022 – December||$36,030.00|
|TOTAL DEBT INCLUDING MORTGAGE||$178,033.01|
|TOTAL DEBT WITHOUT MORTGAGE||$130,681.79|
TLDR: Modified snowball method using Undebt.it
Wow! I can hardly believe it when I look at these numbers. We lowered our debt balance by $6,912.63 in just 3 months! We did withdrawal $1950 from my Roth IRA to pay off the smallest student loan, so that was a big chunk. (FYI: I withdrew only my contributions (not earnings), so I will not be subject to additional taxes and penalties).
This shows me that we are making progress, even when it doesn’t feel like it! Of course we are no longer adding to our debt which makes a huge difference, but this is still shocking to me! We are paying our debt snowball to our first debt and then minimum payments on everything else. I used to struggle just paying the minimums on anything. Now that I see how the overall plan works out, I’m okay paying the minimums on some things until it’s their turn to be in the hot seat. We still have a long way to go, but we’re 1/5 of the way there!
It’s pretty gross to see how much money goes to interest each month. This really shows me the true cost of borrowing money. $724?!?! Do you know how many other things we could be doing with $724 PER MONTH?!? I might have a newer car or clothes that fit…sigh. Our highest rate is only 6.5%. Our credit card rates used to range from 13-22%. Imagine how much we would be paying with higher interest rates. It’s crazy.
More Wasted Money??
It’s also pretty gross when I look back at my budget in YNAB and see that we spent $267.89 on dining out! The image below is a screenshot of my budget category at the end of the month. We spent $18.98 in cash and $248.91 in credit. (The amount on credit will be fully paid off, as we’re only using the card for the cash back benefits.)
Our original budget for the month was less than $100. At least $167 spent on dining out wasn’t budgeted to dining out, so that money had to be borrowed/stolen from another category. Often it comes from groceries or auto fuel, but sometimes I even have to dip into other categories which is super frustrating.
One of the YNAB rules is to roll with the punches, so that’s what I’m doing when I have to move money between categories. We are still spending too much on eating out with our current debt situation. We have other things we want to be saving for or using that money for. If we were to listen to some financial experts, we shouldn’t be eating out AT ALL, but we are trying to find a happy medium.
I really thought we were doing better. In truth, we probably are doing better, but we’re just not doing as well in this area as we thought. When you’re tired and hungry, you don’t really think about the cumulative effect of one meal. We’ve been trying to order the specials and ordering water instead of pop. I guess we’re still going out too often. We’re going to try to limit it to once a week and see how that goes.
What’s your biggest spending challenge? How do you keep it under control? Share in the comments!