by Tricia
I’ve really missed blogging the past few days, but I did manage to make some progress with getting some things done. Unfortunately, I couldn’t get off of work so that put a little bit of a damper on things.
One of the biggest things I did was to really take a look at our finances. Today marks the one year anniversary of Blogging Away Debt and deep down I really wanted to pay off $15,000 of our debt by then. I’m happy to say that we did meet that goal, and our new debt total is $22,302. I did pull some money from the home repair fund that we have been saving to make it happen. I still cannot get my handiman to call me back and I’ve pretty much given up on him. It’s winter, so that’s probably why he hasn’t called. Once the snow starts melting I will call someone else to come and do the repair. I hope to replace the money I borrowed from the repair fund by then.
I also plan on putting more money into our new savings account. I don’t like to call it an emergency fund because that sounds like I am waiting for something to go wrong. I’m not sure what to call it yet. Perhaps a “contingency fund” as a reader suggested before. I believe this is important, so the debt reduction is going to go slowly for a while to get that built up.
I did some shopping for life insurance. I was hoping to write a post as I was researching, but I didn’t have enough time. I took notes and wrote down a few websites I found useful. Probably this weekend I will put it all together. Our quote to cover my husband and I for $100,000 each for 10 year term insurance: $50.00/month. Now, that could change once the nurse comes and takes our stats and takes our blood. I am not very excited about that.
I didn’t get a chance to look at disability insurance, so that is still on my “To-Do” list.
I did go shopping for a few things to giveaway on here. Expect more on the first few things later today 🙂
Cheers to your first year and awesome progress paying off your debt! 🙂
Great job paying down $15K in one year. That is an awesome achievement. I doubt I could have done it.
$600 a year for $100K term life on you and your husband? Ouch! Unless you two really have some major health issues, like having had a heart attack or cancer, this is entirely too expensive.
2 years ago, I got $250K and the wife got $150K 10 year term life for $500 a year total. And we are not pictures of health either! I was 41, 100 lbs over weight, had high blood pressure and high cholesterol. The wife was 35 and had the same weight problem, with diabetes (treated with pills) and depression.
I’d really recommend shopping around some more, unless you did have major health issues. Also $100K won’t do very much for the surviving spouse. Try to bump it up to $500K for each. Right now, I’m in the process of increasing my coverage to $1,000,000 for myself, because the wife and son will need more than $250K if I die.
15K in a year, you are an inspiration! Thank you so much for writing as you do and sharing so many good ideas and thoughtful reflections.
Does your life insurance quote consider smoking status? Because if it does, that might be an incentive to quit! (Just a gentle nudge…:-) )
Good job on the year anniv and the 15K – it takes a lot of dedication to make both those things happen.
Yeah, the life ins quote sounds high to me too… can’t advise further on that – I get mine through work and it’s very cheap (less than $80/year for $200,000 and I am a smoker).
Re the emerg/contingency fund – how about calling it the “Rainy Day Fund”? Then you will have the extra pleasure of yelling out, “It’s RAINing” when you have to use it.
😉
Best wishes -L
I suggest calling your emergency fund what it is “Capital”. It’s money working for you whether it is earning interest from the bank, or it is earning interest from you when you have to borrow from it for emergencies and such just like your credit cards. Capital is not depleted, it is always working for you in some manner. Capital has only a few simple rules, but they will get you to where you want to be. First, if you have income, determine a set percentage to contribute, no more and no less. You have taxes, social security, health, etc. taken out of your paycheck and you manage to live on what is left, so you will adjust. Second, if you need money for emergencies, repairs or such, BORROW from it and pay it back just like any other debt. It should be earning the same rate of interest that it would cost you if you borrowed from a bank or credit card. And even though it may be going back to the same account, your repayment is not the same as your regular contributions. In other words, when you need to borrow from it, make sure you have enough in your budget to make regular payments back to it after your regular contributions. But the nice thing about this is that the money your capital is making from your interest payments is tax free. The IRS will never be able to tax your own contributions.
This is a simplified version of what I personally do and it has been very successful for me. I have not paid a single dime to a credit card company for over three years, and it feels very good. And after putting 275000 miles on my 91 Honda Accord, I just bought a 2006 Accord (used but only 12K miles and still 24K bumper to bumper warranty) with cash from my personal Capital. I am making monthly payments of 406 for 66 months which is what my credit union was going to charge me, but my check is deposited into my Capital account instead of their loan dept. And I still make my regular contributions every time I get a paycheck (for me it is 10%).
Just some thoughts, maybe a little rant, I didn’t expect to keep writing this much, but I live by what I speak.
I can’t believe how fast you’ve paid this down. I’m sure that Copper Country-sized mortgage is a big part of it but I’m still thoroughly impressed having beat the CC debt beast back a couple of times myself.
I have just under one extra house payment (which of course is a little higher for us trolls) in a savings account. I never sat down and consciously thought about a name, but I always refer to it as the cushion.
That’s not for real emergencies like complete loss of housing/health/transportation though. I do have a separate fund for that (finally!). The cushion just avoids carrying a CC balance or having late/overdraft fees if I plan poorly or something unexpected pops up (or when the stupid house payment comes out ONE DAY before the paycheck goes in).