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Written by money funk on January 7, 2010
There were a lot of changes since last month’s account of Net Worth. I won’t run Net Worth numbers this month as I am still trying to sort out figure for this new year, but will update you on the debt repayment numbers.
Last month we had 4 credit cards and one retirement loan that we paid off with a personal loans from Lending Club and my Credit Union (it was a race against rates and time that I ended up with both – very happy with the results). It is nice having two payments compared to 5 different payments. We also reduced our monthly payments from $641 to $404 – saving us over $200 per month perhaps to allocate to our Emergency Fund. The loans helped us cut our interest down and cut the life of our debt by at least 9 months. Although we didn’t pay down our debt we made some great changes.
The retirement loan was was automatically taken out of my husband’s paycheck. By paying it off we put $440 back into his paycheck. This will be nice to have back into our accounts. Kind of puts closure on the whole custom motorcycle experience (don’t build a custom, buy one already put together).
Our chart shows we only paid $835 down on our debt, but that is because we just obtained the loan. Payments don’t start until the end of January. So you will see a larger spike in debt repayment in next month’s figures. We of course still have that payment money allocated for this purpose sitting in our checking account. Plus, I still have $1,800 sitting in our account from the Lending Club loan trying to figure out what to do with. Any suggestions?
I may put it towards the Wells Fargo credit card account (the last of our credit cards) since the APR is like 22% (ouch). But I hate making a minimal payment on a $7,600 balance.
Also, I forgot to mention. My husband earned $599 in OT! Yeah! We are still trying to decide where to put this money, too. In the Emergency Fund or against our WF card. What would you do? We do need to up our Emergency Fund. Hmmm… perhaps I will do a 50/50 split of the OT money. There is more OT money coming in the next paycheck, too. Sweet way to start out a New Year.
How is your progress going? Have a new budget set up for a New Year? Did you make any changes from last year?
Article by Christine
Hi! I am the mind behind MoneyFunk.net. What started out as a blog to hold my family accountable for climbing out of $89,000 debt, has morphed into a community of bloggers & readers all vying for the same thing – ERADICATING DEBT!
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Looking good! Nice job! And give the hubby a kiss for working all that overtime!
How much is in your emergency fund now? If you need to increase it, that’s what I would do. Otherwise, I would put toward WF. Either choice is a “good choice” so I think you’ll be fine either way.
Thank you. And definitely love the husband for overtime.
There is not much. So I am thinking I will hold the money in there. I know I will feel more secure doing so. Then I will obliterate the WF card as I will have my financial platform ready to go.
Thank you Kelsalynn!
Looks great! I think that you should split that OT pay like you mentioned, toward both your EF and WF card. I like to do this myself when I get a little cash, put some towards our EF and some towards paying down our line of credit (our last remaining debt that I want off our back!).
Good luck!
Thanks. Every bit of progress I make helps (makes me happy too)!
I am still undecided, but at this time feel content if we put the $1800 into our EF until further decision. But I do like the idea of a split. Kind of gives satisfaction to making progress in both areas. Hmmm…
Oh, your last remaining debt? Sweet. Will it be much longer before you have it PIFd?
I think that it depends on your overall situation, but I’d be tempted to put it all toward debt as long as you already have a small emergency fund to begin with. Maybe 3 months worth of expenses? Then you could really hammer the debt.
Well, our EF is below par. So, I think I may like to get it back up to par and then go Rambo on attacking the debt.
I love how everyone’s debt journey is unique and there are so many ways one can move towards achieving DEBT-FREEdom.
Wouldn’t it be a dream to have a 3 month expenses EF?! I am far from it.
It’s so nice to see the debt figure go down! I remember when our 401K loan ended (we took it out to put a downpayment on our home). We got an extra $535.00 a month! It was awesome!
It is! And I really hope to do some heavy movement on that figure this year. Cogs are spinning in my mind – how I am I going to do it. I figure if I keep moving forward with my idea than one has got to click.
Although, I have yet to see the $ back into my husband’s check, it is a very nice feeling to know its back where it belongs. Now if the FEDs would just stop taking so much money out of that check! Darn taxes (I wouldn’t complain so much if the freeways/roads were in top shape).
I vote for the 50/50 split too. Good luck!
Thanks!
78%/22% split is recommended! Ur getting rich! Congrats!
Hmmm… and the thought behind those #’s???
Like your irrational, rational thinking.
good for you christine! anything that isn’t an increase is a good month sunshine!!!!!
Right on for that one! Thanks!
Since it’s the beginning of the year, I’d favor putting the extra $1800 into the emergency fund for “sleeping money” (you’ll sleep better with a bigger bannk balance!).
Another advantage too is that with the money in the EF you can preserve your options for a later day. If finances are in your favor, you can put extra on the CCs next month or later in the year.
Or maybe save up an even bigger amount for a larger paydown later. There’s something sweet about making a payment on a credit card that REALLY lowers the balance. It’s a real rush!
I guess I feel at odds that I am paying interest to put money into my EF. Then again, I am paying interest on it regardless. Plus, like you say… I am perserving my options for a later day. When I have that big chunk to throw towards that last CC.
I love the rush, too!