Debt at start of blog (July 2008): $51,497.33
Debt at end of September 2009: $14,459.25
Difference: $37,038.08
Current Breakdown: Car loan (at 5.75%): $0.00
Grad School Loan (at 6.55%): $0.00
Undergrad Loan (at 2.125%): $14,459.25
C got a bonus for work this month, and we used 2320.56 of it to fully pay off my graduate school loan. The debt I have been tracking has now been reduced to my undergraduate student loan, which, at a tax-deductable interest rate of 2.125% is not a huge priority. We still have other debt of course, the mortgage, my car loan (0%), our washer and dryer (0% for 36 months). I have decided that for October and November, I will use the extra money I would normally have put towards student loans to pay off the washer and dryer. Though we have 0% interest for another 2 years, the credit line makes me nervous because if you miss a payment, or are late, or any of a thousand other conditions, the interest rate goes through the roof. I’d rather not have to worry about that, and since we only owe about $1800, I’d rather just pay it off at this point.
After that, I’m not 100% what I will do about my debt. Now that the higher-interest rate stuff has been knocked out, I think we will shift the focus back to savings/retirement. I would like to max both of our 401k’s for the first time next year. To accomplish this, I will take a chunk of the extra payments we’ve been making to our debt and use it to increase my monthly 401k contribution. We will also start contributing to our emergency fund again. More details to come in future posts!
In the mean time, I’d just like to take a moment and say, “WOW!” I think it is so amazing how much debt we managed to reduce in a year and 3 months. I’m proud that we were able to tighten our belts, and find creative ways to make extra money to accomplish our goals. It is also important for me to acknowledge that none of this would be possible if my husband hadn’t made a tough career decision last year that led to him receiving some bonus money that helped substantially in the quest to eliminate our debt. I only fear that without such a powerfully motivating force, we will struggle more to be as fiscally responsible in the future. I guess we just have to come up with new, achievable goals that we feel strongly about.
I agree! You are an inspiration. Keep up the great work!