I’ve Paid For This Twice Already…

Archive for the ‘goals’ Category

Happy New Year! I hope everyone had a joyous celebration with friends and family and are refocused and eager to move forward in a positive manner into 2008. Or, at least, I hope I am somewhat focused.

Being the first Tell All Tuesday of 2008, I thought I would do a mini-review of what financially happened in 2007. I only started tracking anything in earnest starting in June, so this is really a recap of the last 7 months of 2007.

• I paid off a total of $9267.07 of the principal amount of my debt.
• In total, I paid $10504.54 to debt in those 7 months. So I paid a total of $1237.47 in interest.
• My “debt snowball” amount (my minimum budgeted amount to debt each month) is $810.41, or $5672.87 for these 7 months. I paid $4831.67 above that in snowflakes to my credit card debt directly. In total I paid $6231.67 to credit card debt and have $175.17 left to pay off in 2008.
• In the last 7 months of 2008, I paid off 25.43% of our total debt.

A lot of things happened to make this possible. We had some setbacks, but we also had a number of fortuitous things happen in regards to money in the past few months. My spouse had a small windfall. We got a property tax refund. I received some Christmas money. But even with those huge snowflakes, the amount of debt paid off would not have been nearly as high without all the little snowflakes I’ve collected every month. Maximizing every dollar and looking for places to earn more or spend less has really turned our lives around. And I couldn’t have done any of this without you, the reader. This blog has helped me sort out my thoughts, kept me on track, and provided a new source of revenue for our family to attack debt with that I never even imagined existed. Thank you all for reading and supporting our journey.

I don’t know how replicable our progress will be in 2008, but that isn’t going to stop us from trying as hard as we can. In the next two weeks, our credit card debt will be completely paid off. I’ll be examining the best way for our family to tackle the student loan debts in the coming weeks, and then my sights will be firmly set on eliminating my spouse’s (which is at 9%, our highest interest debt left).

Our debt snowball of $810.41 over 12 months amounts to $9724.92. My hope is to pay ~$18,000 to debt this year (so almost double our snowball) and completely eliminate my spouse’s student loan. $18,000 would be about 50% of our starting total debt (as of June 2007) and since I paid off 25% in 7 months, why not shoot for another 50% in the next 12 months?  And then our debt would definately be paid off by 2009 instead of 2010.  A girl can dream…  My actual reasonable goal, however, is not quite that ambitious. Pay $1100 to debt every month, or $13,200 total over the course of the year. This wouldn’t be all to principal since there is a lot of interest being charged to our student loans, but it would be enough to knock the student loan to about $5000 or maybe a little less.

After the dust has settled from our holiday trip (and the car is actually completely fixed) I am going to reevaluate my 2008 goals, since when I wrote them, some of our windfall money hadn’t happened, and see where we might stand. Paying off the entire student loan might not be completely out of reach in 2008. But I do know, if we come as close to paying that off in 2008 as we came to paying off the credit card in 2007, I’ll be a very happy camper.

Happy New Year! Thanks so much for being a part of our snowflake revolution.

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Last month, I got a notice that our mortgage payment was going up because our property taxes last year were higher than expected. Well, when we got home from our vacation, sitting in our mailbox was a check from the county auditor for several hundred dollars in property tax refunds. Apparently our state passed a property tax relief act in December and refunded a portion of the taxes we paid this year.

That isn’t going to affect our new higher mortgage payment for the coming year, but it does give us ammunition for a snowflake to the credit card. I also received some significant Christmas money from relatives I wasn’t expecting, and my parents always put some scratch-off lottery tickets in our stockings for fun. This year I won $25 and my spouse won $5. So that is going to the credit card as well. All in all, I’ve gathered up about $1000 in the past week through the magic of Christmas and the property tax refund check (as well as a few survey checks waiting for me when we got back), and before the end of 2007, I will make a payment to my credit card to knock the balance to somewhere in the $200 range.

Just have to wait until my spouse gets home and then off to the bank with my checks I go. He has my car with the carseats because it needed new taillights today, so I can’t go out with the kids until he gets home. Nice to find out your taillights aren’t working on mile 780 of a 800 mile trip by the local law enforcement… I’ll save that story for the trip wrapup post I am working on. Luckily the hazard lights worked and we got home safe and sound. And now my car is fixed.

It is tempting to pay the entire credit card off today and be done with credit card debt in 2007, but that would probably put us in a huge bind for the next few weeks unless I pulled it out the emergency fund. I can wait. I don’t want to wait, but I can. Patience is a virtue, after all. I’ll have the new total tomorrow in a abbreviated Tell All Tuesday post as well as on my current numbers page when I make the deposit and then tally up and make the payment.

My credit card debt is an endangered species.

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Now that 2007 is almost complete, it is time to look ahead to 2008. Last week I looked at our original 2007 and 2008 midterm debt reduction goals and found that we’ve met our 2007 goals and the original 2008 goals are more than feasible, so it is time to reevaluate our midterm debt reduction goals for 2008.

Our budgeted minimum payment, the original “debt snowball” if you will, is $810.40. Every month so far I have been able to put more than that towards debt reduction, at first around $100 a month in alternative income raised and budget savings, and as time has progressed and the blog has started to earn income, that amount has increased. Blog revenue is somewhat unpredictable at this point so I don’t want to design a budget for debt reduction based on it, but I do want to aim for higher than simply the budgeted minimum being paid to debt every month.

My conservative goals are at least $900/month paid to debt reduction. If I can pay at least $900 a month to debt reduction, which I think is reasonable because we have all but $90 of that worked into our monthly budget, and I have been averaging over $90 in alternative income every month since we started concentrating on snowflaking, I should accomplish:

• Eliminate all credit card debt by April 2009 (snowball calculator says I would have $41 to pay in May)
• Spouse’s student loan under $8000 (snowball calculator says it would be at $8141)

My stretch goal is to pay $1100 to debt each month. That would necessitate averaging about $300 in alternative income over our budget every month, which is more than our average so far but is less than what has happened in recent months. I think this is obtainable if I keep concentrating on alternative revenue sources. It will, as the goal implies, be a stretch. At the end of 2008 we would:

• Eliminate credit card debt by March 2008
• Spouse’s student loan under $5500 (snowball calculator says $5847)

The ultimate stretch goal? Be on track to have all non-mortgage debt eliminated by December 2009. That would necessitate us averaging $1261 to debt every month in 2008 and 2009. It would mean a lot to me to have this whole debt chapter of our lives behind us, or at least, mostly behind us, by the time our first child starts kindergarten in the fall of 2009. Starting in January I am going to make the paid to debt this month number part of our monthly wrapups and see how close we can come to that number. You never know. As time goes on, maybe I’ll be able to shrink that number needed per month even more.

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Several months ago, I set some goals on this blog to complete in 2007, 2008, and 2009 regarding our debt reduction. Being that 2007 is about to draw to a close, I wanted to evaluate our 2007 goals and see if we met them, and see if our 2008 goals should be reevaluated in light on the progress we have made thus far.

For 2007, I set 2 goals.

• Move my credit card debt to a 0% interest no balance transfer fee offer.
• Get credit card balance under $4000.

And I am happy to say - I did it! Both of those goals were met. I moved my credit card debt to a no interest offer in September and have been beating it down with renewed determination as every dollar goes directly to principal. And that has been one of the key factors that has allowed us to not only drop under $4000, but under $2000 in 2007, and I am scrimping and saving and planning and plotting to try and get it down closer to $1000 before the end of the year. I don’t know what I’ll be able to manage, but it is going in the right direction.

I didn’t set a goal for our overall debt number for 2007 but I am happy to say it has dropped under $30000 and I hope to never see it rise above that again.

For 2008, I set two goals as well.

• Pay off credit card by August 2008
• Have spouse student loan under $10000

I think both of those goals are more than attainable. We should have the credit card debt paid off before August 2008 and my spouse’s student loan should clock in at just over $9000 at the end of the year just by paying our budgeted minimums (our own little debt snowball) every month. I am working on figuring out some new goals for 2008, both a “conservative” set of goals that with staying the course, we should be able to reach, and a “stretch” set of goals that it will take some luck as well as hard work and focus to reach. I do however know that the sooner the credit card is paid off, the better, for our peace of mind and our budget. We also have to assess how we want to attack the student loan debt and what changes if any we want to make to our emergency fund.

I want to eliminate $15000 in debt next year. Stick around and see if we can do it. It’d be a huge huge stretch but anything is possible.

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Patrick at Cash Money Life is concurrently starting a new carnival (the Carnival of Financial Goals) and running a giveaway for a new iPod by asking What Is Your Financial Resolution for 2008? Funnily enough, that’s something I was already formulating a post about (and honestly, you’ll see quite a few “goal” oriented posts here in the not too distant future, since I am starting to feel like real progress is being made and can continue to be made with some planning and goal setting) so I thought I’d jump on the bandwagon and put my thoughts into words. iPods are pretty. And y’all know how much I love carnivals.

The #1 Financial Goal for our family in 2008 is NO MORE CREDIT CARD DEBT. Specifically, my goal is to eliminate the credit card debt by August 2008 so that I will not be charged any more interest on it whatsoever (the 0% interest offer it is under expires in September 2008). So I have 8 months in which to accomplish this goal. But how?

My credit card debt stands right now at $3144.20. August is 9 months away, so splitting that up, I need to pay at least $349.36 (we’ll round that up to $350 for simplicity) per month every month. $200 of that is budgeted in our monthly budget already as my “fixed” minimum payment, so it is the other $150 I need to concern myself with. My goal is to dedicate every bit of alternative income I earn, from selling things, taking surveys, and blog advertising, as well as any other source I can come up with, to reducing this credit card debt. Between those sources, I have in the past few months earned over the $150 threshold. The challenge will be to be able to dedicate all of that money in the next 9 months to debt reduction since I recently lost my contract position that was contributing to our overall budget. So to accomplish my goal, I will have to either increase the alternative income goal per month by another ~$200 at least, or find another contract-type position. I am actively pursuing another contracting option and hope to have positive news on that front soon. I would like to keep all other alternative income focused on debt reduction if possible.

I do think this goal is very acheiveable and realistic. In the past 6 months, since I started this blog, we have eliminated almost an equal amount of credit card debt to what we have left - about $3000. Since that time, advertising on the blog has started to bring in some more revenue which is counteracting the loss of the contracting position for now, and if we can keep up the pace we have set in the past, we stand to eliminate the credit card debt well before our self-imposed deadline. We have kept on track and stuck to our plan and there is no reason to believe we will not be able to continue to do so. We also have an emergency fund of $1000 in place to help if we suffer a minor setback.

So, I feel our goal is specific, measurable, achievable, realistic, and has a definite timeline. I’ll be posting updates on our goal as part of the general Tell All Tuesday posts as well as some serious mini-celebrating when we cross each $1000 threshold (which hopefully we will do very very soon!)

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