I had my first major debt-reduction triumph today! Our balance owed on the Honda loan is officially $0.00! This debt started at $28,271.00 at 5.75% back in February of 2008. It was our top priority debt because it had the largest monthly payment ($465.50) and the largest non-tax-deductible interest rate. The freedom of not having such a large car payment each month is wonderful, and makes me feel a lot more financially secure.
We will now make my graduate school loan our number one debt priority (current balance is about $6700, 6.5% interest, minimum payment 103.60), although since we put so much into debt this past year, we are going to not be quite as aggressive from here on out. We are going to increase our 401k contributions and put a little less toward the debt. We will use the former Honda car payment to pay extra on the grad loan, plus an additional $200 each month to help pay it down, for a total monthly payment of $103.60+$465.50+$200 =$769.10. With this much of an overpayment, we should have this loan knocked out by February, though my goal is to snowflake it to the point that we wrap it up in January instead.
