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How Did I Decrease My Debt So Much in April & May?


A reader asked a great question in a comment: “If you are only putting 1300.00 a month on debt reduction, how did you decrease your debt by 3000.00 in April and May?”

That question is one of the reasons why I really need to show income on a monthly basis and I will start doing with this month’s reports (which I am almost done with and should be posted late tonight :)).

There are four main factors that led to the higher than normal debt reduction for April & May:

1.) Tax return. I have a habit of over-withholding and last year we were thinking we were going to make much more than we did. But when I quit my outside of the home job to find a work at home job – I had no idea I’d be out of work for four months. So, we ended up making less last year. It led to a nice tax return and that helped kickstart our progress.

2.) Overtime. The end of March brought a very nice paycheck at the end of the month for our highest paying job. That overtime helped the debt reduction in April.

3.) Extra hours. My one part-time job kicked up a little bit and gave me more than the normal number of hours which lead to temporary extra money.

4.) Three-paycheck month for two jobs in April (normally two paychecks/month). Because the last payday was near the end of the month, that led to more money for the month that could be shifted towards debt in May.

5.) Not as much paid in March and June. In March, things were still pretty new to us and we paid $566 of our debt down. In June, we paid $707 towards the credit cards. When one month was lacking – we tried to make up for it the next month.

Overall, I am shooting to pay $1050/month to our credit cards to meet our goal date of May 2009. However, I want this debt gone ASAP. If I have the money available to send more, I am sending it out. If I can’t pay that much one month, I will try to make it up another month.

Thank you, Kim, for your question. Questions like that help me figure out better ways to present info for everyone. As always, any other questions are welcome.

So, what do you think ?