tell all tuesday slow and steady progress

February 10th, 2009

Tell All Tuesday – Slow and Steady Progress

When life throws you curveballs, when all is said and done all you really can do is get back up and start working towards that goal again.  Sometimes it seems like a continuous cycle – save up some money in the emergency fund, have an emergency, empty out emergency fund, rinse and repeat.  But in the end, we’ve been making great progress over the past 2 years towards our ultimate goal of being debt free, and that is what matters.

Our first priority right now is to get our emergency fund to $2500.  With a $250 transfer I made this morning, it is back up to the original $1000.  At the end of the week I get paid, so I may be able to transfer some more money in then.  I don’t know if we will be able to get it up to the full $2500 by the end of the month, but looking at my projected income for this month I am cautiously optimistic that we will be able to get it to at least $2000, barring any more unforeseen emergencies.

Our next priority is to save $10000 for a new-to-us vehicle.  Our primary vehicle has shown itself to be less than reliable, and we would like to be able to replace it without incurring additional debt, were it to have any more serious problems.   We will not start saving for this until we get the emergency fund to $2500, so it still stands at $0 right now.  This fund will also double as a backup emergency fund in the case of a very expensive emergency, but it will remain earmarked for use to purchase a new-to-us vehicle.

Our final current financial priority is to pay off our remaining non-mortgage debt, my student loan.  I made a $300 payment to this today, which is double the actual minimum, and what we’ve decided to pay to it each month until we complete the above two savings priorities (or we change the order of the priorities).   This brings the current balance owed on the loan to $9553.46.  This means that according to my NCN Network chart, we have paid off 73.79% of the total non-mortgage debt we had as of June 2007.

Nothing exciting or earth shattering happened this week, and at this point, I consider that a good thing!   I am considering re-prioritizing the student loan above saving for a new-to-us car, but I think that might be just because the Saturn has behaved for the last month.  We’ll see.  I get antsy about the debt still hanging over our head and unwilling to let it just sit with me for too long.

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13 Responses to “Tell All Tuesday – Slow and Steady Progress”

  1. I am also focusing on my EF right now. All the “Doom & Gloom” out there has started to make me nervous. I’ve actually decided to make the EF a priority over my student loan. It’s honestly not costing me that much to do that either – my EF is being saved around 2.5% and my student loan is locked in round 3%. The piece of mind is worth the expense to me…

    I’ll switch back to School Loan Butt-Kicking Mode as soon as the EF is fully funded and the talking heads stop giving me nightmares!

  2. ^ What he said about the “Doom and Gloom” out there. We don’t really have any debt (just a little on the cc that will get paid off before it’s due) besides our mortgage, but our emergency fund keeps being dribbled away on small “emergencies”–parts to fix the dryer, stuff that wasn’t planned for because I wasn’t budgeting as well last year, stuff I hadn’t thought of, etc. I want to get it back up to a reasonable amount, and then start saving for stuff we need to fix up the house a bit (new fence, new soffits and fascia, new blinds, new chandelier because I hate the one we have, etc.). I also want a long-term emergency fund in case the economy gets truly awful. So many things to save for!

  3. Another possibility: Save all you can toward that car (I’d do everything but minimum on the student loan) and if the old one decides to behave well for a while and you can postpone the purchase…then you can take some of the “car” money and make a whopper payment to the student loan…a big punch all at once.

  4. I would totally agree with Kathryn: pay the minimum on the loan until you’ve stoked up the other funds. Then, if the Saturn decides to go kaput -and not according to plan, you have leverage. Very easy to make big bolus payments to the student loan. Also, of course, interest on the student loan is tax deductible. Calculate the aftertax rate on the loan. May be inspiration to save up instead of paying (i.e., have a “Student Loan” ING savings account) and at the same time lower the risk of HAVING to borrow for a “new” car :-) Just my 2¢
    Thanks for posting.
    Congrats on the tremendous progress over the last year and a half!

  5. Oohh. I’m in the same situation as you, kind of. My wife and I have been trying to build a car fund for some time, but things keep working against us. Especially tuition/student loans. So we’ve put it off for now, even though our beloved car is starting to groan a little here and there, making it questionable how long it will remain reliable.

    When we start work again full-time, our plan is to pay off our student loans as quickly as possible. The question will be whether or not we also save for a new (to us) car. I have kind of a one-track mind, so we’ll see if I can handle that. Doing both would take more patience.

  6. Cool! Looks like things are going well. It’s always fun to bump up your savings.

  7. This is a great idea, I would also save up instead of paying extra on the student loan at the moment (we’re doing this at the moment instead of prepaying the mortgage principal).

    I must say, you’re on the right path, kudos to you for sticking with it in the hard times. I know too many people like you that would have given up already and started back down the road to debt slavery.

  8. Wow – you’re almost there on your student loan! That’s awesome! The fact that you have no credit card debt and are almost out of student loan debt is great. Very inspiring. I’m currently feeling a little overwhelmed about our own student loan debt. At this point, it’ll be another 7-8 years before we pay it off.

  9. I am just beginning to realize how LONG it takes to pay off debt. I have been making good progress. I am 37% paid down. It will take me a few years to be where you are. I find the pace tiresome. But I read your blog and I know if I stay the course I will get there too. Progress – even incremental progress is still positive. Given the scary things going on in the economy you should be proud of how far you have come. Thanks for keeping us all posted.

  10. Great work! Moving forward is moving forward– even if it is slower than we would like.

    One of my new mantras is Progress Over Perfection . . .

    It is better to achieve progress than achieving perfection. While you are trying to perfect something before starting or releasing it, you could be making progress or improvements instead. We are all guilty of analysis paralysis to some degree . . .

    More on this idea here:
    http://divorceddadfrugaldad.com/2009/01/12/progress-over-perfection.aspx

  11. Whew! This is hard stuff. How frustrating, to have to use up your WHOLE darned emergency fund.

    Given that the student loan will just sit there for a while, I also wonder if it would be better to make minimum payments and use the excess to rebuild the EF faster. That would at least return your back-up funds, even it it would delay the payoff a while.

    On vehicles: a friend who was one of the country’s highest-earning Toyota salesperson says that people are driving their brand-new vehicles back to her huge employer’s lot, handing over the keys, and announcing that they can pay for the things. And NOTHING is moving off the lot. If you go to the dealership’s site, you find a slew of “pre-owned” 2008 and 2009 Toyotas. They’re not exactly giving the things away, but some of the 2006 and 2007 models are on offer at fairly low prices. I’ll bet a smart negotiater get one for a lot less than the dealers are asking.

  12. I would be EXACTLY the same way, going back and forth between the nused car fund and the SL debt. I find it hard to work hard at two short-term goals at the same time. Have you considered paying 500/mo to your SL debt so you can go down a first digit every two months? That’s the sort of silly thing that would probably motivate me, lol.

    Your ability to face adversity, get up, dust yourself off and keep going is truly inspirational.

  13. Saw your interview on Bargaineering. I’m thankful that as the economy crumbles, there are people like you out there ready to lead and share your experience.

    Just wanted to put a straw in the basket regarding your new-to-you car research. As FunnyAboutMoney says, there are plenty of nice new cars back on the lot because their former owners can’t pay for them. But you may also want to check out car rental re-sale businesses. I purchased a 2yr. old Toyota Sienna from Enterprise for below Blue Book. The only thing I can find wrong with it is some overzealous cleaning on the dash. It’s bigger than we probably need but it gets decent mileage (24mpg) and we wanted to feel more secure on our many trips. Our previous car was totalled and I just felt so vulnerable in a smaller car. Knowing that I couldn’t afford a Prius and not wanting a total gashog, I think we really lucked out. Plus the Enterprise people called back several times to see how we were doing and if we liked our new van.

    We paid in full from savings so we saved the cost of financing. It was a sickening feeling to write that check, but as I’ve done more research after the fact I’m realizing it was a solid decision. There were cheaper cars for sale, but not by much. If we had had a Toyota or Honda that had been wrecked, we would have received a higher replacement value from insurance. But we had a GM model with low resale value and it didn’t matter that I’d just had new tires and new transmission put in, not to mention the faithful oil changes and car waxing. A beat-up Honda would have been reimbursed at a higher value than my pretty, well-cared-for American model. So that’s another column for your spread sheet.

    Happy researching, and may the Saturn give you time to plan!

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