by Adam Dawson
This month was a MUCH better month in the debt payoff department. Thanks to the windfall, we had the biggest paydown of any month since we started, with over $10k disappearing from our balance! This is also a huge milestone as we’ve now crossed below the $100k balance! Here are the numbers.
Loan Balances
Stafford Loan #1: $0!! (-$8631) BAM!
Stafford Loan #3: $18411 (-$1722)
Discover Student Loan: $40240 ($-98) I HATE the interest on this loan. Hate.
Citi Graduate Loan: $37578 (-$177)
Total: $ 96,229 (-$10,628)
Account Balances
Emergency Fund: $5000
Race to $15k: $0 (+$0)
Debt Sinking Fund: $1200 (+$1200)
Total: $6200 (+$1200)
Grand Total Improvement: $11,828
What an exciting month for debt paydown. A very good start to our 2 year plan that sets us on the right path. I think of people who’ve told us, “You are over $100,000 in debt, you have no business spending money on _____!” You’re going to have to change your tune now, ‘cuz it’s only $96,000!
We are 2 years away from being debt-free! Can we pay off almost $50k in debt in 2014? It will be a huge challenge but I think we’re ready.
Ok, time to be blunt, here. I’m not trying to be mean, and that was a WONDERFUL accomplishment. But really, you’re still WAY in debt, and you signed onto this gig at least in part to have people help you maintain accountability, right? So if you don’t want people pointing out things like, “You have no business buying ______ because you are $X in debt,” why are you on here? This whole thing is to help you remember the behavior you want to adopt as part of your new journey to debt freedom, to give you the electronic dope-slap you need when you do something that takes you off that path.
GREAT accomplishment, but don’t lose track of your goals.
blech. it was a bit of sarcasm. we are still 96k in debt, of course we need help still.
Adam, I recognized the humour. And I think you guys are doing great! Keep up the good work buddy.
I got the joke.
I DIDN’T get that it was a joke. That’s the problem with written media. It’s hard to tell whether someone is joking or is serious.
I disagree a bit with Tracy. Very few people I know change their behaviors because they’re getting slapped, whether by family or by a bunch of strangers. They do, however, change them when they’re getting encouragement, being held accountable in a positive way, and they can see the change themselves. Such as paying off 10k in debt, and having 6200 in the bank for an emergency fund/extra debt payments. For that, I say way to go Adam and Emily! 48k a year, you can do that easy. Stay focused, keep your eyes on the prize, and you will make it.
What a great month! Keep up the good work!
It’s pretty incredible to look back over all the debt you’ve paid off to date. Is Stafford loan #3 the next on your hit list? Also, how much did you free up in minimum payment by paying off that loan in full?
Personally, I love the winter months for paying off mountains of debt. I tend to want to stay home, eat cheap comfort food, marathon TV shows and be a bit of a sloth. I’m pretty sure my winter ‘entertainment’ budget is $8.55/month for Netflix. The summers bring the temptations of drinks on the patios, many trips to all of my favorite garden centers, and wanting to be social.
So exciting to see your intensity and hearing the ‘hate debt’ message loud and clear.
Stafford #3 is next. It’s actually 2 loans bundled into one, so we’ll be working on 3a first ($~8500) and then 3b (the rest). We freed up just shy of $200 in minimum payments. Our total minimum payments now are about $880.
Really can’t wait to get through the last Stafford Loans and start attacking that Discover loan. Depends on taxes, bonuses, etc. but hopefully we can knock out the Stafford loan in 6ish months. Starting to really build some momentum.
I’m sensing the momentum now. Your challenge is to keep on the right path so you keep gathering momentum.
With dieting, I find little slips lead to disastrous falls. I’m terrible about staying on the right path for the long term. I’m sure it is the same with debt repayment.
You’ve got the goal; we’ll all do our best to keep you accountable to making that goal and hopefully you’ll internalize our questioning of everything you spend so it will be easier to avoid the missteps.
Great job! I love when an entire loan is demolished in one go. It’s the best feeling! I have mixed feelings about Dave Ramsey and his financial advice, but one thing I agree with is the adage that the momentum of wins keeps you going. I really think you guys can knock this out in two years if you keep at this pace.
Very smart idea to use the windfall for debt payment and not mess around with the money. You’re doing GREAT. Can’t wait to see the progress in the following months, really nice job 😉
GREAT JOB! Congratulations for getting under $100,000 and congrats on such an aggressive payment this month!
That is an awesome way to start off your new 2 year plan. And congratulations on getting it below $100k! That’s a milestone worth being super excited about.
Now keep going and show us $75k! 🙂
i’m shooting for 90 next.
Sweet!
I agree with Walnut, it is motivating for me in my own debt snowball just to the progress you have made and seeing all those beautiful lines through paid off debt. Congrats and keep up the great work!
No offense, but I’m honestly wondering how someone ends up with that much debt in the first place. It’s kind of shocking. I thought I was irresponsible for racking up $42k in student loans, but this is ridiculous.
take a look at the early posts we did in July and August, we explained all of this. It was for a full time MBA program
Even so, it’s excessive. I think we’ve been conditioned in US society to think of six-figure debt as being normal and justifiable when it’s really not. Also, living outside of our means, I see you had a ton of car debt, too.
They’re not here to be judged, this is supposed to be a safe encouraging place. It’s not constructive to tell them their school loans are excessive, this is where they’re at and they’re making great progress paying it off. Well done guys 🙂
I don’t think $15,000 qualifies as a “ton” of car debt. Good grief. You should’ve seen ours. Over 55K. Now that’s a ton of car debt. In Adam’s defense on the high student loan amount, at least he’s earning an income that justifies those loans. They’re going to knock this out in a few years and be just barely over 30 with a HUGE income and HUGE potential for growing wealth.
They have jobs to pay their debt, while you have no way of paying your debt.
You are the one with the ridiculous and irresponsible loans.
So pleased to see that you’ve cleared your Stafford Loan #1 debt, the perfect christmas present! Wishing you all the best with your 15K saving target, it’s always good to have clear savings goals. We’re trying to do the same ourselves!
I just stumbled across your blog and am trying to figure out what the Debt Sinking Fund is… Is it another term for your saving account?? Good job on your hard work!! Paying off debt is not fun, but you’re doing fantastic! I will definitely stick around and keep reading 🙂
Hi Esb. The debt sinking fund is just a savings account. The idea is that we will save up for a few months at a time, and then make a big debt payment once every several months out of this fund. It may sound silly to do this instead of just paying the debt down directly, but this is sort of a compromise instead of spending time building a big emergency fund. The money will be there in our account in case of a huge emergency, but if we don’t need it for an emergency, we can periodically pay down a lot of debt.
Ahh, that makes sense. And I think it’s a great idea! I am currently trying to pay down debt as well and find myself doing exactly what you described there… Save, save, save… Pay down a huge chunk! I tend to be impatient though, which is hard in paying off debt 😉 Y’all are doing great, good job!!! 🙂
I think it’s really hard to put your debt payoff into perspective without knowing your income and how much you spent in different categories. If you got a $20k boost from switching jobs, then where did the other money go? I mean, what you did is great but I guess I’m a numbers person who likes to look at the big picture and not just the debt payoff amounts.
Also, where do your mortgage/mortgages (from rental properties?) factor into your debt? In reality, your debt is far more than your student loans/consumer loans, right?
Again, i just feel like I’m only seeing a slice of the pie and therefore its hard to really take away anything valuable or encouraging from what you’re posting.
sorry to disappoint. we’ll get into the budgeting aspect more soon.
the debt and income from the rental properties are not tracked on this blog, except the property that’s attached to our primary residence. yes, in reality there is more debt in our rental properties, but there is also income and equity we aren’t tracking on this blog. Those funds are kept totally separate from our household accounts and don’t affect our monthly budgeting.