- I paid off another credit card! This is the last card from my college credit card debt and I am so happy to finally be rid of it.
- With the payments made today, I've crossed the next big marker on my debt-o-meter. I have now crossed the $4k threshold for debt paid off. That means I've paid off more than 11% of my debt in under three months!
So, here's the update in numbers:
Student Loan 1 - $1950/$1951
Store Card 2 - $2,638/$2,800
Student Loan 2 - $2,765/$3,148
Auto Loan - $3,735/$4,140
Credit Card 3 - $4,376/$4,577
Credit Card 4 - $4,910/$5,150
Student Loan 3 - $5,610/$5,614
Student Loan 4 - $5,904/$6,048
Total paid to date: $4,131.05
(plus I have my $1,000 Emergency Fund in the bank, which didn't exist before this process started)
All of those little balances are out of the way. The remaining larger balances look a little daunting, but I'm determined to keep the momentum going. I'm going to skip over Student Loan 1 for now and knock out Store Card 2. Student Loan 1 has a whopping $6 monthly payment which must be spread over about 72 years or so, but it has an incredibly low 3.25% interest rate. Store Card 2, meanwhile, sports a 25.24% interest rate and a $80 minimum payment, $56+ of which goes to interest every month. I'm looking forward to the day that I never again have to look at a statement with a double-digit APR. In fact, when I'm through paying off this debt, the only interest rate I ever intend to see again might be for a mortgage. Maybe, but we'll see. Maybe I'll just save up for a house and pay cash. Or maybe I'll build one a little at a time as I can afford whatever Lincoln Logs are needed to build a real-people house.
If I can keep going at this rate, I can be debt free in less than two years. That would be amazing. Most or all of this debt is going to be gone before the girls start kindergarten. That means that I'll be in savings mode throughout most of their school years. I can't believe that as a single mother raising twins I'm going to be able to pay for both of them to go to college by myself! Paid-for college is going to be a reality!
13 comments:
Great job!! Keep on going!! We became debt free (- house) on April 19th, and it's so worth it. We are now working on getting ourselves into a position so that we can start aggressively working on the house. Keep on moving! It is so worth it!!
If you have a steady job you should go to a bank and ask for a personal loan. The interest will be high, but 25% is just plain evil. I think that a bank would give you at least 15% or something.
So inspiring! I need to be this clear and honest about my debt too. You're an awesome mom for taking charge. And I'm going to treat Target like a bad part of town too.
Hit those high rate accounts first and hard. I guess I'm anti-Ramsey on that front, but whatever works for you, do it! Great job and keep it up. From someone who is ahead of you, it wasn't luck or the lottery. It was paying things off one by one, saving money automatically and putting off wants.
When the debts are gone, please build up your savings first. Education savings and retirement are important, but you need to take care of the short term first. That's one thing I would have done differently.
Found you from the NYT article today--good luck to you! It's a challenge, but you're doing a great job.
Congratulations on the steady progress you're making. Great job, keep it up!
Good for you!!! keep at it! :-)
In fact, when I'm through paying off this debt, the only interest rate I ever intend to see again might be for a mortgage.
When you've finished paying off your debts you'll want to look at interest rates you can receive by making investments!
Congratulations on your terrific progress!
When you've finished paying off your debts you'll want to look at interest rates you can receive by making investments!
Absolutely! I'll resume retirement savings for me and college savings for my girls as soon as my debt is gone. I won't mind at all if I'm looking at double digit interest rates on investment statements! :)
A new idea is taking hold here in Vermont. People like yourself who are studiously paying down debt have been hooking up with investors, mostly retirees, who pay off all their debt for them, consolidate their loans into a single payment with around a 9% interest rate. It works out great for the investor because the risk is smaller than the stock market and it works out great for the folks who now only have one payment and save thousands on interest. The papers are full of the ads.
Congratulations on your progress!
Hi, great blog you've got, hope you keep up the posts and the spending discipline too...
Question: Would you be willing to post the interest rates you're paying on each of your debts?
You're absolutely doing the right thing by delaying repayment of the low interest student loan(s) in favor of credit card and other high-interest debt, even if it's not part of the Ramsey system.
In fact, if your other student loans are at as low an interest rate as the $1950 loan, you may -never- want to prepay these and skip instead to the part where you build your savings and start funding your 401(k) aggressively. The first $450 you invest in your 401(k) with the company 2-for-1 match gets you an immediate return on investment of $900, whereas reducing a 3.25% interest rate debt by $450 would only save you $900 in interest costs after 61 years. It may not feel as good as eradicating debt, but it's a much smarter move for you financially.
Also, to commenter #2's point above, another potential way to refinance your debt is a service like lendingclub.com where you may be able to get a more competitive interest rate than credit/store cards.
Good luck!
G R E A T JOB!!!!!
From one single mom to another. I figured it out early on as a young mother of one boy that needs come first wants can wait. I bought a house just recently during closing most of my debt was wiped clean after the house I opened up a Home Depot account and racked it up gulp yikes well I figure I would treat myself I'm now working towards paying off that card. And you just inspired me.
Thx
Great job! Keep it up. You're girls will benefit from you having control over your month. They will learn from the great job you are doing!
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