Well not only am I trying to limit the groceries which we purchase and try to spend a lot smarter during the course of a month – as you may know I’m also trying desperately to reduce my debt – this debt being my line of credit, and any credit cards.
My first update was back in June 2009 and at that time I told myself that I was 12.07 months from being out of debt (keep in mind this is line of credit and credit cards – obviously not mortgage). As with most things, there are obstacles along the way – and with my budget there certainly were some obstacles (Hunters surgeries being two fairly large ones!).
My next update was in July 2009 and at that time I was 9.85 months from being out of debt. Pretty darn good,I can’t quite remember what I was able to do to decrease the amount of debt as quickly in a month – but obviously I had a very inexpensive month.
In September of 2009 I posted another debt repayment update and although I didn’t post how many months were left on my debt, I did post that I had paid off over $3700 of my debt. It’s funny how you accumulate debt by buying things that you want or need to have or purchase, but it’s always such a pain in the neck trying to pay it off eh? In September I had 7.5 months or so left – so I was right on track.
Then came January 2010, which was my last update I’ve posted on my debt repayment. At that time I had paid off $6118 of debt which (at the current pay-off schedule) left me with 6.18 months left to try to get myself out of debt. This was after one of Hunters surgeries (he needed two) and the reason that I mention this is that each surgery was well over $1000 to perform.
This bring me to my update today.. I will call this the May 2010 update since it really doesn’t include June yet.
I am absolutely elated to report that I have paid off almost 82% of my debt since I started almost last year to the day!
Yes, you read that right – Now having said that, I did have a few ‘extra’ payments in there on my debt which I hadn’t originally put in the budget – namely my tax refund which I posted about.
I am so close to being out of consumer or “bad debt” that it’s starting to get exciting. According to my budget schedule – I’m 2 months from getting rid of it. Wow.. what a year!
I can’t wait to write up a wrap up post on how long it took me, how I did it, what changed, what I’m going to do now, etc.. All I know is that whatever the hell I’m doing – it seems like it’s working.
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Nice work Len, I’ve been working on my bad debt as well, but always seems that as soon as I start to get ahead, some unexpected expense comes up and keeps adding to the debt, for example, had a good month with bringing in extra income and was looking at putting a large chunk of cash down on one of my CC, but now my car is acting up, which I’ll need to take in next week and god only knows it always seems to be a few hundred bucks. Do you put money aside for unexpected expenses?
Great Question – traditionally I would have just used my line of credit for ‘unexpected expenses’, oh who am I kidding – I would have just used it for ‘unneeded expenses’ as well as the unexpected. That said, I’ve sort of got a new approach and I’m trying my best not to put ANY charges on debt. Once my LOC is paid off, I plan on saving up with an emergency fund. This fund will be (hopefully) 6 months worth of expenses which I will also use for emergency purposes. I won’t be putting money into it as fast and as furious as with the pay off amounts I’ve been doing, but yeah.. that’s my next plan.
I should also say that I definitely hear you with the unexpected expenses when you least expect it.. the last paycheck that I had was a ‘free paycheck’ for me.. basically I didn’t need to worry about many bills from it.. but you know what? Almost as soon as I realized it was a free check.. I got in a fender bender.. *sigh* see ya later extra income.
Crappy deal on the fender bender, but always seems to be the case for me, get a nice chunk of cash saved up from extra income and something happens where the cash is needed … oh well, once the debt is gone it will be smooth sailing.
Ha! Dude that is the EXACT same thing as me.. I was even telling Liz and my roommate of this fact. Was doing well even through Christmas.. then boom! Hunter needs 2 surgeries.. then this.. fortunately the $400 is petite in comparison to the surgeries.. but ya. Tough to get ahead it feels.
The good news is that we’re aware of the problem, aware of where we want to be and will work towards it… that makes us ahead of most people (sadly).
According to Suze Orman, your next plan of action should be to have a 6-8 month emergency fund when your credit cards are paid off! No one, in this economy, should consider their job ‘safe.’ She has some interesting ideas about using your credit cards instead of the emergency funds in some circumstances.
Check out her show on Saturday nights – it helped me get out of debt before I retired – an event that was hoped for but not really planned! I only have a 4 month emergency fund, but no credit card debt. With a few investments and a smaller house, I should be fine!
Mortgage is considered good debt – credit cards are bad debt.
Many of the tools on her site will really compliment the work you’re already doing! Great job using your blog to inspire others!!!
http://www.suzeorman.com/
Thanks for the comment Rose,
Actually as I mentioned to Thomas, that is my next plan of action. That will be a 2011 goal however as there are a number of things which I’ve been putting off in order to be able to pay for in cash like a lot of house renovations which will hopefully increase the value of my home as well.
Having paid off as much as I did over the last year however certainly gives me a lot of hope that I can and will be able to complete these goals.
I’ve read a lot of personal finance books and blogs, and truly once you get reading through a lot of them – they all say the same thing – live frugal, make saving automatic, and pay off debt. All of these things I’ve done, it’s the patience to wait and discipline to keep it up that separates the success stories and the wannabes.
Another idea, Len is to get and/or use your line of credit.
The interest rate (depending on the bank) is prime or prime + 2-3% on a LOC. Pay off your credit cards with your LOC and actually save a bundle in the long run. Even if you make exactly the same payments on a LOC as you were doing with your Credit Card – you’ll pay off your debt much sooner!
If you know an accountant, he or she may be able to put ideas like selling your home into perspective. Since the home I’m living in is my primary residence – there are savings I didn’t know about when I sell! Big Bonus!
Also, if you’re claiming the rent from tenants – there are tax breaks on heat, lights, the new stove, replacing the roof etc. You probably already know this, but I know others read your blogs and people that are following your progress in the variety of things you’re involved in may not know.
Thanks for the info you’ve been sharing! I’ve learned lots and don’t think I ever told you!
Hey Rose,
Thanks for the tips.. good information for the readers! ( I know I don’t carry a credit card balance so that doesn’t apply thankfully)