Saturday, October 29, 2016

October 2016 Update: $71,216.70


Every month I update where we are at in terms of our total debt (aside from the mortgage). It helps me to be accountable to readers as well as to myself. I have been posting our debt updates for over two years now, and while it feels like slow progress, I know that things will pick up over time as our income situation (hopefully) improves and the interest drops as we pay off our debt.

To clarify for new readers, this debt includes our car loan as well as student loans. Our student loans stand at around $62,000. Right now, we still owe just about $9,000 on our 2007 Toyota Sienna. While it would be ideal to have purchased our van outright, given the timing of the situation and our desire to have an extremely reliable vehicle for our one-car family of six, we opted to get a low-interest loan for 5 1/2 years along with a warranty for major engine problems such as transmission, etc. 

So let's get on to the fun part - our debt has dropped to $71,216.70. This month, the most exciting thing was that we paid more toward our loans than we have in the past. Usually we allocate $465 per month, and had planned to increase it to $665 this month, but once again some unexpected expenses arose when we discovered that a spring on our garage door was broken. The cost to repair that was $250, and through some rearranging in our budget, we managed to pay for it with some of our extra student loan money as well as our own bank account and decided not to sign up for the YMCA this month. Still, with the major repair expense, we managed to pay $620 toward our student loans and the regular payment of $294 toward our vehicle. That's over $900 that we put toward debt, and considering that our take-home pay is $3250, I'm happy with that number.

One thing that has really helped me in our debt repayment process is to create a spreadsheet that anticipates what we could pay off each month if we committed to a certain amount. It reminds me of where will we be if we keep going, as well as what we are giving up if we spend the debt-repayment money on something else. At my husband's current income, we could break the $70,000 mark by Christmas, and by next Christmas, we could be down in the mid-$50,000 range. By Christmas of 2018, our debt could be down to $37,000. So while $71,000 doesn't feel great, $37,000 two-years-from-now motivates me to press on.

2 comments:

  1. Congrats on your progress!! That is really exciting to be in the 70k range! When we are in that range I honestly will feel like we are basically done (we're paying off $600k. Eek.) And I love your idea of looking to the future to help you stay motivated! :)

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  2. Thanks, Amber! You never know, you may reach your goal sooner than we will reach ours - it depends on your budget and what income you have to work with as well. Ours is tight right now compared to our debt, but I'm hoping that maybe just a little over 3 years from now we will be done.

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