Tell All Tuesday: Two Debts Down, Two Debts To Go
The reality of having paid off my spouse’s student loan is setting in. When I started making up my list of November’s bills and allocating them to paychecks, I didn’t have to include my spouse’s student loan. When I was calculating the total amount left of our non-mortgage debts, I only had to add two together instead of three. I was barely used to only having to add up three instead of four!
This paying off debt thing is addicting. I may have to seriously revisit the idea of paying ahead on our mortgage once we are down to just mortgage debt and see if that would make sense for us. I don’t think we can knock out a $100K+ mortgage in this short a time, and we have other savings goals that I think might be higher in priority, but the idea of trying to knock it down a bunch is tempting.
With that, I paid the minimum payments to my student loan and the car loan this past week, which is all we had left in the budget for debt reduction this month after knocking out the spouse student loan. The numbers now look like this:
Debt at start of blog (6/19/07) : $36,451.71
Current total as of 10/21/08: $12,175.07
Principal paid to date $24,276.64
Broken down into:
- Credit Card: PAID OFF 2/7/08
- Student loan (at 7%): $11,025.19
- Spouse student loan (at 9%): PAID OFF 10/7/08
- Car loan (at 4%): $1149.88
NCN Network Chart: 66.6% of debt paid off
The goal is to find enough money by November 20th to pay off the car loan in its entirety. Although I still lean towards my student loan first (probably because it is, after all, my student loan, and I am sick and tired of more than half my minimum payment every month going towards interest) I do see the benefit of creating increased flexibility by knocking out the smaller balance. It will cost us an extra $6-7 in interest over the course of the rest of the payments doing it in the opposite order, but I am okay with that.
We have $437.59 in our debt snowball, freed up by paying off the credit card and spouse student loan. Add that to the minimum payment on the car loan ($228.32), that’s $665.91. We’ll need approximately $1154 to pay off the car loan, so that leaves $488.09 more we’ll have to come up with through snowflaking alternative income (blog revenue, survey payments, tutoring, and other miscellaneous things). I think I will try and add a few extra tutoring hours in the next few weeks to add to that, and we may be able to knock out the car loan next month. Now that I break down all the math, it seems more likely. The power of that growing debt snowball.
As for my student loan, that will be a little while longer. But once the car payment is gone, the entire budgeted $810.41 a month for debt repayment will go directly to my student loan. Add on to that snowflakes of alternative income, and I am starting to feel pretty excited by the whole thing. My spouse still owes me $7 for deviating from my highest-interest payment plan though. I think he needs to sell something. 
And then we need to start saving for a new-to-us car so that once one of ours gives up, we don’t go back into debt. 
But for now, on to next week!
October 21st, 2008 at 3:14 pm
Thanks for sharing this. It is inspiring to know that people do this every day. Sometimes I look at the balance sheets and it seems impossible, but then I realize I have to take it dollar-by-dollar, bit by bit.
October 21st, 2008 at 4:38 pm
This is so awesome. I have been reading for a while but the magnitude of what you have done hit me today. You have done such a great job getting rid of debt. I cannot even imagine how wonderful it must feel!
October 21st, 2008 at 5:14 pm
You are my guide and inspiration for debt elimination. I hope you will still around cyberspace in 10 years or so when I can proudly say…My debt is gone!
Until then, I will be plodding along, making those monthly payments and watching the amount I owe go down so very slowly.
You have every right to be proud of what you have accomplished!
October 21st, 2008 at 5:29 pm
This is so inspiring. Yay!!! for one less debt. You go girl!
October 21st, 2008 at 5:42 pm
Woo hoo! You’re making fabulous progress! And soon, you’ll be throwing a HUGE amount toward your student loan. That thing’s days are certainly numbered!
October 21st, 2008 at 6:16 pm
I am almost right in line with you on this journey. I just yesterday paid off one of our student loans, paid off our only car payment a few months back, and paid off all our cc’s earlier in the year. Now we are down to just one student loan almost the same exact dollar amount as the one you have remaining! Maybe we should have a RACE! although mine is at 8%…
October 21st, 2008 at 11:33 pm
Wow! Isn’t it exciting to actually see the changes! Good idea to track your progress carefully so that you can really see the difference all your hard work is making. Also, thanks for sharing the details – it’s great to be able to share and speak freely about something that people are usually to afraid to open up about. I’m sure you’re going to be a wonderful inspiration to a lot of people.
October 22nd, 2008 at 2:42 am
Wow, your progress is amazing! I have no doubt in my mind that your debt would be paid off within the next year or so!
October 22nd, 2008 at 10:47 am
I am a new reader, but an inspired reader none-the-less! Thanks so much for sharing your debt reduction journey! After reading, I paid off a pesky store account that I was going to put off another month, but I got so caught up in what you’re doing I just paid it off (I borrowed from savings). Of course I was paying more in interest than the savings was earning–duh! Why didn’t that clock in before? Anyway, I currently have NO credit card debt or store card debt and am just paying on a Parent Plus loan for my daughter’s college. You are truly a debt reduction wizard! Thanks!
October 22nd, 2008 at 4:55 pm
Seeing your paid off list and the fact that the car will be paid off soon gives me motivation. I just found your blog and can’t wait to spend some time reading about your journey.
October 22nd, 2008 at 5:55 pm
I am simply amazed by what you’re doing! It’s definitely a reminder that every little bit counts and I can make things happen if I just focus.
October 22nd, 2008 at 11:27 pm
I remember how excited you were at the half way mark… and now you’re 2/3′s of the way there! HOORAY!!!
October 23rd, 2008 at 5:09 pm
You’ll do it! I wouldn’t be surprised if you had a good part of that $488.09 snowflaked away already.
I can’t wait to read that edition of Tell All Tuesday! Maybe you can do a Tell All Thursday that week instead? (Nov 20 is a Thursday.)
What I most admire about you is not your ability to pay off debt, it’s your perseverance.
Also, I’m curious. Do you guys ever “reward yourselves”? I can’t believe you don’t, so I’m assuming they are smallish, affordable rewards you don’t feel the need to post about.
Here’s to your welcoming 2009 with just four digits of SL debt. Cheers!