Finance and Fat

We finally topped the $10,000 mark in principal paid on all of our debt! We have been close to $10,000 for a couple of months now so I’m really glad to finally hit that milestone.

Current total debt = $255,118.82

Principal paid in February 2008 = $729.41

Principal paid since August 2007 = $10,499.94 (average of $1,499.99 per month)

We paid a lot more debt per month in the last few months of 2007. I’m not exactly sure what the difference has been lately. I think we are spending money a bit more loosely than we were then and I also had some side projects toward the end of 2007 that provided some nice extra income to pay toward debt.

We need to tighten up on the spending and I need to find some projects so we can make some more progress in 2008.

We made progress on our debt snowball in January 2008, but not as much as I had hoped, and it was our lowest month of debt repayment since starting our get out of debt plan in August 2007.

That being said, the news isn’t all bad because we did carry over about $1,000 in cash from January that could have been used for debt payment, but due to payday timing and payment due dates I would have been left with very little cash on hand had I tried to use all of the money within the calendar month.

Current total debt = $255,848.23
Principal paid in January 2008 = $396.21
Principal paid since August 2007 = $9,770.53

While it’s not critically important, I was disappointed that we are still stuck below the $10,000 total paid number since we have been in striking distance of that for two months now. $10,000 is a significant milestone, but I also know that it is a small step in the big picture so I need to just continue to be patient and wait for it to happen, which should be in February.

Current credit card debt = $18,034.11
Principal paid in January 2008 = $470.67
Principal paid since August 2007 = $7,525.71

You may notice that we paid more on credit card principal than our total debt principal went down. That is because we had some accrued interest pile up on our student loans in January. I’m a little unclear on the details, something I am looking into further, but to save a long story I will just say that our student loan balances went up for now (I’m not sure if there was a mistake made or not).

Six months into this project, we have averaged $1,628.42 of principal paid per month. At that pace, we are looking at more than 13 years to be out of debt. Ouch! So far our monthly debt payments have varied a lot, so I don’t have confidence in the average or the projected time (could trend higher or lower at this point), but I like to have a trend-line to follow even if it is a volatile one.

Nothing left to do now but try to find more money to pay toward debt in February. Wish us luck!

It looks like I never did a November debt report. Oh well, time to talk about December.

December was our lowest debt payment month in the last 3, but we still made some decent progress. Christmas, eating out for the holidays, plus $720 on car repairs slowed us down, but at least we are still moving in the right direction. We paid $1,663.15 of debt principal, which was only 0.64% of our total debt.

New milestone # 1 - credit card debt is now UNDER $20,000. Since I started tracking this (beginning of August), my credit card debt has gone from $25,559.82 to $19, 475.47. That is a change of $6,084.35 in 4 months (not too shabby).

Milestone # 2 - total debt is now UNDER $260,000. This number started at $265,618.76 and now stands at $257,907.59. That is a change of $7,711.17 in 4 months. You can see that the bulk of our work has been on the credit cards, but it is nice to see that all debts are moving down.

The first credit card I am attacking in my backwards, sort-of debt snowball has gone from $10,730.04 to $5,585.65. That means this is no longer the largest balance credit card, but it still has the highest interest rate by about 6% so I will continue to attack it first. I am excited now because with some extra hard work I could be killing off that balance in as little as 2 months (3 months comfortably). Time to find some money to save and some stuff to sell.

I spent some time recently cleaning out old financial documents and I found a credit card statement that made me laugh. I guess I must have been really desperate for credit and the opportunity to spend money that I didn’t have because this credit card was just awful.

I had to pay a $70 set-up fee and $69 annual fee and the interest rate was about 23%. The limit was $600 and there were no rewards or anything else that could even remotely begin to justify those huge fees. All I can say when I look at that is I can’t believe how stupid I was. I can’t believe how much money I threw away in an effort to spend more money than I had anyway. It’s disgusting really.

Fortunately, I got at least a little bit smart even before starting my official financial turnaround because I paid off that card last year and closed the account. If you have a credit card like that or if those sound like good terms to you, cancel the account immediately! Believe me, you will regret it later if you don’t.