tell all tuesday figuring it out edition

December 9th, 2008

Tell All Tuesday: Figuring It Out Edition

My finances are a mess on paper right now.  Nothing we can’t recover from and move forward from, but life has been throwing a few curveballs our way in the past month.  Most notably my lovely car, which has cost us way too much this year already, now has nice new back brakes and rotors, a new seal on the power steering pump, and a new oxygen sensor for the engine.  Add that to the new tires on my spouse’s car and the timing belt my car will get replaced this month (both planned expenses) and our car maintenance budget this month and last month has been totally blown.

Which necessitated my re-allocating the Christmas budget last month temporarily to the cars.  But I am still having Christmas, so that money is going to have to come out of the money that I try my hardest to reserve just for debt elimination – my income.  We are getting closer and closer to the point that we can pay all our bills and other expenses from my spouse’s income alone, and that is my goal every month.  But sometimes, that doesn’t happen.  So since I am not sure how much of my “alternative” income (taekwondo, tutoring, and this blog) is going to be able to go towards debt elimination vs Christmas presents, traveling, and other related expenses, I need to hold off on the debt elimination using that money until the end of the month.  But I don’t want to wait until the end of the month to pay anything above the minimum on my student loan, so I came up with a compromise.

Our debt snowball – the money we have budgeted every month for debt elimination – is $810.41.  Originally that included the minimum payments for both student loans, the car, and $200 towards our credit card.  Now that the only non-mortgage debt remaining is my student loan, that entire $810.41 in the budget goes towards that.  On top of that payment, we have been able, using my income, to snowflake above and beyond that minimum amount anywhere from $100 to over $1000 depending on the month, for the past year and a half.   This month, I am completely unsure what we are going to be able to use towards debt of that income and what will need to go towards Christmas.  So even though it will end up advancing my payment due date (and I hate doing that), I am breaking my student loan payment this month into two payments – one now for the budgeted amount of $810.41, and then one after Christmas at the end of the month for any snowflakes I can scrape together.

So that is exactly what I have done so far.  I made a payment this morning of $810.41 to my student loan, applying the extra above the $144.50 minimum payment directly to the principal amount.  This brought our remaining non-mortgage debt amount to $10032.62.  Still five figures, and I could have paid a little extra to drop it under, but with the daily interest calculation thing it would have been symbolic at best.  At the end of the month I will hopefully have enough snowflakes to drop it low enough to stay under five figures permanently.  Our total non-mortgage debt paid off since June 2007 is now 72.48% (up from 70.4% at last update).

Making two payments in the same month is going to advance my next due date to February instead of January, but that’s okay.  I think it won’t make much difference as far as interest accruing on the principal in the long run, and I am hoping to be able to knock this debt out completely as fast as possible.  Which may mean the end of 2009, but maybe sooner depending on how things go on the income vs expenses front.

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8 Responses to “Tell All Tuesday: Figuring It Out Edition”

  1. It sounds like you got it figured out. It sounds like you are in such better shape than when you started this journey.

  2. You’ve been doing so well. Cars are troublesome sometimes, aren’t they? I can’t wait for the day I get to read “We’re Paid Off!” although I hope it doesn’t mean the end of your blog.

    Just out of curiosity, you said previously that you have a price book, didn’t you? Did you ever get confronted by anyone in the stores about what you were doing? The reason I ask is because I did just recently (I just started mine). First store, too. Then again, I didn’t even try to be discreet about it. Or do you go by the receipts?

  3. Although I feel your pain for all the car repairs, it is good to see that you are human. I have read your blog for about a year now an often felt you have had a ton of money to throw at debt. Even as you had problems with your electrical system and hot water heater, you still made sizable payments above your basic snowball. It is nice to hear that sometimes you can just make your basic snowball payment. As I struggle to just make minimums on-time each month, especially in months with more than the usual expenses (like Christmas), it is nice to know I am not alone.

  4. I want $810 a month to pay toward debt!! I need to get a higher paying job or something! That is so fantastic that you are so close to being under $10K! Congrats!

  5. @Jen – it may seem like we have tons to throw at debt now, it wasn’t always that way. When I started this blog, I was juggling minimums and trying to keep from having to resort to credit – and when the stupid car blew its engine a year ago, we actually did have to finance part of the repairs for a while.

    As the numbers of debt and amount shrink, the momentum builds. That and me working three jobs. :) My spouse misses me ;)

  6. Great job on the project so far!

    Christmas always seems to be a difficult time. Dunno why, but this is the time of year when everything goes expensively haywire (at my house: $380+ pending to repair the dishwasher; $223 for a vet bill; yet-to-be-determined amount to repair the poolting set for dinner for 10 people). This is the time of year when you feel like you can’t ever get ahead. For reasons I don’t understand, this happens EVERY December. ?????

  7. I swear we are on the same payoff time table, we are down to one student loan that I am squeezing and pinching all the pennies this month so we can start out next year with it at $9999.00, and I think I might actually pull it off. Of course we had a rather expensive car repair pay for this month too and that came out of our snowball money as well but I think it might still happen! I’m hopeful anyway, here’s to being debt free in 09!

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