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.

One of the greatest things about writing this blog is having a public place to post my goals and easily review my progress each month (also publicly). I started 2008 with 2 ‘big’ goals and 5 ’small’ goals. Here is a look at my progress so far.

Big Goals

Pay off all Credit card debt - I started the year with $18,504.78 in credit card debt. After 2 months I have $17,364.96 for a reduction of -$1,139.82 in two months ($569.91 per month). At that rate it will take almost 3 years to pay off the credit cards! Obviously that would be a huge failure given the goal to pay off the credit cards this year. With 10 months remaining in 2008, I need to average about $1,736 principal paid per month for the rest of the year. That is still possible and I think it can be done, but time is running out!

Get body fat percentage under 25%  - I started the year with 39% body fat according to my new scale (the absolute accuracy of that may be debatable, but this is my baseline number). As of my last weigh-in for February, my body fat was 36.7% for an average of 1.15% lost per month. I need to average a little under 1.2% lost per month so I am just about right on track for my goal this year.

Small Goals

Increase the emergency fund to $5,000 - I set up an auto-transfer of $150 from every paycheck to the emergency fund. That alone is almost enough to reach $5,000 ($3,900 from the transfers). As of today, the emergency fund is at $875.11. That is lower than last month, but not because I have been spending the money, I am just changing accounts so some of the money has a different name now. I will be building the fund back up soon.

Earn $20,000 (gross) from side businesses - I consider any money we earn outside of our regular ‘day’ jobs to fall under this category. For me, this would primarily be freelance web development work and websites and for my wife this would mostly be tutoring (at least for now).  We have earned $1,722.59 toward this goal through February. We need to pick up the pace here, but I anticipate a couple of larger projects to come through later that will get us most of the way there.

Start a Roth IRA with at least $1,000 - Not yet, but soon!

Buy life insurance - Still have the quotes, need to follow up with our insurance agent.

Write a will - Nothing done with this yet. I want to do it, but our financial lives are so simple and our assets so small this is a low priority.

That’s it for 2 months into 2008. We aren’t off to an amazing start, but we have 10 months left so there is still plenty of time to achieve our goals.

One of the great things about writing this blog is having a public place to post my goals and easily review my progress each month (also publicly). I started 2008 with 2 ‘big’ goals and 5 ’small’ goals. Here is a look at our progress so far.

Big Goals

Pay off all Credit card debt - We started the year with $18,504.78 in credit card debt. After 1 month we have $18,034.11 for a reduction of -$470.67. At that rate it will take us more than 3 years to pay off our credit cards! Obviously that would be a huge failure given our desire to pay these off this year. With 11 months remaining in 2008 we need to average about $1,640 per month of principal paid. That is still possible and I think we can do it. It will require a little more dedication to frugality and some more efforts to earn extra money.

Get body fat percentage under 25%  - I started the year with 39% body fat according to my new scale (the absolute accuracy of that may be debatable, but this is my baseline number). As of my last weigh-in for January, my body fat was 37.6%. I need to average a little under 1.2% lost per month and I exceeded that in January so I am on track for this goal. I expect it to get more difficult the closer I get to 25% so I do need to increase the intensity if I want to be sure of reaching this goal.

Small Goals

Increase our emergency fund to $5,000 - I set up an auto-transfer of $150 from every paycheck to our emergency fund. That alone will put us close to $5,000 ($3,900 from the transfers). As of today, we have $1,372.07 in emergency funds. If we can hold steady, we will reach this goal in 2008.

Earn $20,000 (gross) from side businesses - I consider any money we earn outside of our regular ‘day’ jobs to fall under this category. For me, this would primarily be freelance web development work and websites and for my wife this would mostly be tutoring (at least for now).  We earned $860 toward this goal in January. If we stay at that rate every month we will only get about half of the way to our goal so we need to find ways to increase these earnings soon.

Start a Roth IRA with at least $1,000 - We have done nothing with this yet. I don’t expect to look at it until the credit cards are paid off.

Buy life insurance - We haven’t made the purchase yet, but we did get some quotes and will likely get this done soon. I know, waiting isn’t smart, but we’ve gone this long without we can hopefully survive a few more weeks or so. 

Write a will - Nothing done with this yet. I want to do it, but our financial lives are so simple and our assets so small this is a low priority.

That’s it for the first month of 2008. We aren’t off to an amazing start, but we have 11 months to get things done so I feel pretty good about our prospects for success.

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.