tell all tuesday the windfall edition

November 27th, 2007

Tell All Tuesday – The Windfall Edition

So, the post this morning about our debt reduction goal for the new year went out of date (the forecasted numbers part at least) almost as soon as it posted. My spouse’s dad emailed him late last night and told him that he (the dad) had gotten a small inheritance from a relative and was giving a portion of it to my spouse and my spouse’s brother to the tune of $1000 each. My spouse and I discussed it thoroughly and we haven’t quite decided in stone what to do, but we are leaning towards putting $900 towards the credit card debt, and $50 in each of the kids college savings accounts. Yes, I know – no room for fun (although it is paying for past fun after all) – and we may change it slightly. But the idea of paying down the credit card by $900 at once is so…. satisfying. The idea of paying it down by $1000 is even more satisfying but we want to give the kids a little bit of the money in a responsible manner. I don’t know when the money is arriving, the email said it was coming by insured letter and we’d have to sign for it, but not if it was sent yet or not.

I could write a whole series of posts on how cool this is and how amazed I feel and yet how much it sucks when you’re in debt and $1000 just melts away to deal with it. I’ll probably limit it to just one post though ;) .

So, the debt numbers should get a shakeup sometime in the future. It seems my under $30,000 total goal for December 31st wasn’t ambitious enough, because if this all works out we should blow right past that. Let’s get to those current numbers and then I have some potential income-related updates to share.

Debt at start of blog (6/19/07) : $36,451.71

Current total as of 11/27/07: $30,595.43 (principal paid to date $5,856.28)

Broken down into:

  • Credit Card: $3,144.20 (snowflaked $196.73 on 11/23/07)
  • Student loan: $11,878.03
  • Spouse student loan: $12,002.27
  • Car loan: $3570.93 (made minimum payment of $228.32 this week)

% of debt paid (by NCN Network Chart) :16.07% (last week 14.95%)

So I paid the car payment this past week, and since the interest is low (only 4%), most of that goes to principal each month (about $212 last month did). That makes that total shrink fast and I love that. I also snowflaked a large amount to the credit card – that was in itself a mini-windfall. Part of that was a number of survey payments I finally received, and another part of that was for the pretty Prosper ad on my site. And the final portion of it was for doing some website copyediting work that fell into my lap from a friend for their family business. It was an unexpected project and I was very grateful for the opportunity, which I did as a favor and was unexpectedly compensated for. The debt will be gone! I will beat it down. :) 16% down! Only 84% to go. Heh.

I am very positive that the credit card will drop below $3000 by the end of the year now, and my new goal is to have it drop below $2000. Amazing. But I am positive we can do it. In fact, I would love to see it drop below $1500 by the end of the year. We might just pull that off… $900 from the windfall, $200 standard minimum we pay, leaves $544.20 to knock down to meet $1500. That is not probable, but it is definitely possible. I just have to earn ~$700 somewhere, or we have to have some good surpluses this month and next! Frugality and increasing income… a winning combination. I hope. I’m really happy about likely being under $2000 regardless of where we actually end up on December 31st.

Speaking of earning, I had my mock tutoring exam last night for the online tutoring I applied for and I haven’t heard the results yet, but it felt like it went really well. Tutoring online is harder than in person, I think. But I was solid in my content knowledge and I felt like I was effective as a tutor. Getting this contract position would really help. So I’m just waiting to see if I move on to the next step in the application process, but I am feeling very good! :) On to this week!

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21 Responses to “Tell All Tuesday – The Windfall Edition”

  1. Can I suggest that you put 100% of the gift $1000 into the CC? One thing I’ve written about in my RESP series (education fund for Canucks) which you probably haven’t read (why would you?) is that in my opinion you are better off taking care of your current finances rather than worrying about a future uncertain obligation (education).

    My feeling is that you should get your debt levels to a comfortable level before saving for college.

    Mike

  2. Fantastic! Great work! You are truly an inspiration!

  3. I hope your online tutoring exam went well!

  4. You are making such amazing progress, congratulations!

  5. Thanks everyone!

    SavingDiva, I *just* found out I passed my mock session! woooooo So now I have to watch some training videos and take an exam on them. And then if I pass that I get hired. :)

    Yay me :)

  6. This is so cool. Sometimes I’m jealous of the focus that all you debt-free people can bring. I just don’t want my strictly money based goals that much, so they happen as if in slow motion.

  7. What an amazing, unexpected turn of events! I just read your goals for 2008 and thought how great it will be to achieve them, and then you get a huge step up! Congrats! And god work on the tutoring exam as well.

  8. @Mike – you can suggest it, sure!

    My spouse thinks his dad might ask what we did with the money. He (spouse) isn’t comfortable telling them “We put it all towards our credit card debt”. I, on the other hand, think that might give them a good lesson (they have a lot of cc debt of their own, I don’t ask, his mom just tells lol). But he wants to tell them we put “some” towards the kids college funds without lying to them :) .

    And, after all, I flaunt conventional wisdom on that front all the time. I save (a tiny amount) for the kids college every month, even being in debt. I know financially it would be better not to but I emotionally need to. I have a little history with that – that I don;t need to go into right here but let’s just say it is a very high priority of both my spouse and I to contribute to the kids college education financially.

    Anyway, now that I have written a book…

    And thanks everyone for the well wishes! Life is really funny sometimes. In a good way.

  9. I like how you said that you are paying for past fun. Every time I think about buying something new instead of paying down debt, I think ‘I already had my fun. Now it’s time for business.’ People don’t seem to understand that. They are obsessed with treating themselves (every day!). I treat myself every now and again, but mostly I pay for my past fun or my school loan (which can be classified as fun, I suppose).
    Congrats on the windfall!! I wish I had received that email. :)

  10. Wow, congratulations!

    I have a $1000 savings bond from my grandma that I got for graduation that I feel similarly about. I can’t cash it it out until June 2009 without penalties, but I’ve already decided that it’s going towards paying down my loans. On the other hand, I’m like, “Wow, $1000! I could do a lot with that!” and it’s still only 1/50th of the total loan amount. But I know in the long-term I’ll feel better about it if I put it towards my loans.

  11. PT – fair enough!

    You should do a post or two on college fund accounts – are they called 529s? I’d be interested to know how they work.

    Mike

  12. Awesome on 2 counts, the windfall and passing the online exam. I should fill my wife in on the online tutoring. Currently she works at a brick and mortar tutoring place. The money is decent for a part time position, but I am sure online may be better.

    On the windfall, I think the mix is good. I am sure the $100 towards the college accounts won’t be big for you since this is unexpected money.

  13. @Mike – I will post about 529s when I figure them out. Right now the kids funds are in two ING savings subaccounts because I haven’t taken the tax advantaged step of the 529. I think I will do it sometime next year. Want to be a little more secure financially first.

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