Hey there, fellow debt crushers! It’s been a few months since I put out a debt report. This is mostly because I’ve been on auto-pilot at the end of the year, and our numbers have looked the same from one month to the next. This has made for a very boring part of the debt payoff journey.
I think it’s important to note that a lot of debt payoff is, well, boring. You’ll get into a habit, and that’s a good thing, but habits, once established, aren’t terribly exciting. December 2020 was our ninth full month of paying off debt after starting in March of 2020. Specifically, March 7th was the day we got serious.
However, some big things happened in December (besides Christmas!) that have made it worth reporting again on how we’ve been tracking to our debt crushing goals.
If this is your first time joining me on these debt payoff reports, you can follow my story from the beginning or just recap here to see where we’re sitting. I’m on a mission to pay off almost $27,000 in debt in under two years.
Ah, December and Christmas
We started planning in August for Christmas. I started looking at my phone bill and calculated when I’d have my “free month” so I could put the extra money toward Christmas presents. Then I took my Adventure Fund money that isn’t currently being used, and put that money toward Christmas. Turns out the pandemic is good for something.
I had “additional savings” from building up $20-50 a week and used that money as well. All told, I was able to buy Christmas for three people and ended up with about $150 on my credit card by the time it was all over.
I spent close to $1,500 on three people plus decorations, baking, and cards. My husband spent separately on gifts for me and one of the gifts for Boy Spawn. He took his “extra” payment for his PayPal account and used that for Christmas spending this year. This meant that our total payments to debt were not as awesome this month as they usually are.
Which is cool. We expected that.
Is That Kinda Spending Normal?
You may think $1,500 is an outrageous sum or you may think that’s normal. I surveyed a group of gals I know, and over about 30 responses, it looks like Christmas spending is all over the place. Some people spend less than $100 per year on Christmas, total, while others spend far more than me.
You might even think I’m nuts. Maybe you think I shouldn’t be spending over a thousand dollars on Christmas when I have debt, and this is what’s wrong with people.
And you’re entitled to that opinion. But I tend to take a balanced look at spending, and Christmas is a holiday I absolutely LOVE to participate in, outrageous spending and all. I think the fact that I planned for it and I was able to ultimately only put $150 on credit (which I’ve since paid off without incurring interest) is pretty good.
My husband did even better than me this year. He was incredibly proud to tell me he finished Christmas for the first time ever without using ANY DEBT! And now we’re right back on track with payments to our debt. But unfortunately some changes come with the new year.
First, let’s look at December’s numbers.
December Debt Ledger
Originally, we anticipated having our Joint Card 1 paid off by January 22nd. BUT, with the second round of stimulus checks, we anticipate paying that off in early January, along with all but about $100 on the PayPal account! This was an unexpected bonus, but we certainly didn’t want to spoil it by spending it. So we thought its best use was paying down our debt even faster. We are thoroughly stoked about it!
This means that going into February, we will be focusing all of my payments on Kyle’s Personal Loan, and he will be continuing his usual payment of $268.
On top of adding the $300 he was paying to PayPal each month.
On top of the $150 he was contributing to Joint Card 1 each month. That’s a whopping $1,348 per month! This means that barring any unforeseen circumstances, we should have this line of credit paid off by the middle of April. That’s ahead of our original schedule by a couple of months.
Remember that as we continue, less of our payments will go toward interest, which means more of our payment will go toward the principal of the debt. Ultimately, things will speed up as we pay things off.
If we’re only paying $100 in debt starting in February (after applying our stimulus check to debt), then we are putting $77 more down on the debt itself in February. That means more of our usual $1,500-1,700 payments will go toward that rather than toward the interest. And that will further lower the interest owed each month, and so on.
We Could Do This Faster
We have sizeable savings, and we’ve considered several times over that we might want to use the savings to pay off the remaining debt. This would actually save us several hundreds of dollars in the long run in interest. Maybe even more than a thousand. But, because of the pandemic and the uncertainty it creates in the economy, we don’t feel that this is in our best interest (haha, pun not intended but stiiiiiiiill funny) right now.
We also made the decision in December to go down to one car. Kyle is only going into his office once per month, and I’m only going in twice per week. So we don’t need two cars in the foreseeable future.
This saves us money in car insurance, which is usually paid from our tax refund each year. We will be putting this year’s tax refund into our joint savings account in preparation to replace my car.
We have a couple of big things happening right now. My current company has been acquired by our technology partner, which is a fully remote operation. This allows us to move anywhere. The acquiring company has already made me an offer of employment at my current rate of pay.
Because we no longer want to live in Los Angeles, we’re making a move to the South late this year. We’re really looking forward to this move and are right now planning how we want to make that happen.
Unfortunately, I needed to make some changes to our medical benefits. This drops my monthly debt payments from $840 per month to $600 per month. Although this a sad turn of events for us, it was something that needed to be done and unavoidable. This means we lose an additional $2,880 annually.
We expect that at our current rate, we should have our debt completely paid off by July of this year. That assumes nothing crazy happens. If all goes according to plan, we may be able to move by the end of the year.
Let’s take a look at how I’m tracking to my annual goals, which I set in March of 2020.
Pay Down $17,000 in Debt
Since we got serious about paying down our debt, we’ve made a total of $19,034 in payments—woohoo! Even if we correct for interest payments (so far totaling $2,776), we’ve still managed total payments of $16,258! This leaves us at about $750 needed to hit my $17,000 goal. We will exceed that in early January, placing us two months ahead of schedule on this goal!
At this rate we’re actually on target to pay off about $19,500 in debt, so I’m not too worried.
Write 24 Pieces of Content
I slowed waaaaaaay down on content creation from November to December. In fact, I only wrote four pieces of content for my blog in October, and none in November or December, which is terrible. However, even with these abysmal numbers I’m over budget on this goal. Right now I have a total of 35 pieces of blog content. I’m on a mission to see if I can double my goal to 48 pieces of content by March 1st. To do this I need to create another 13 pieces of quality content in two months.
It’s a stretch goal.
I’ve already completed the goal I set for myself this year several months back.
I realize I either should have waited to set this goal or should have set a more aggressive goal. Before I can monetize I need to build up some blog authority, get some views, and start using social media. I’m pretty certain at this point that I want to use Pinterest’s search engine since it’s not as competitive as Google, although I will certainly be optimizing for Google as well.
Nine Months In
I wanted to continue my chart trend so everyone can get a big picture of our debt payoff journey. You can see that back in October we hit the halfway point on our debt payoff, and our streams crossed. Unlike in Ghostbusters, this is a great thing!
The most important thing to note here is the way the line is moving at a near consistent rate. You don’t see any months with sharper dips or a flatter line. This is because we’ve been realistic about our monthly payoff goals, and it’s something we can sustain long term. A measly seven more months will see us debt free, and then it’s on to the next financial goal!
Until next time, keep crushing those financial goals!
View the September 2020 report.
View the January 2021 report.