For this blog, I decided early on that I would only really discuss our credit card debt even though we have more types of debt. Credit card debt was the most damaging to our finances, and it really shows when I compare our monthly minimum debt payments from April 2006 to our present monthly minimum debt payments.
Back in April of 2006, things looked like this:
Auto Loan: $258
School Loans: $208
Credit Cards: $950
TOTAL: $1,753 / month
That number still gives me the chills. That is WAY too much money that we were paying a month for past spending.
Here’s what it looks like today:
School Loans: $238
Credit Cards: $99
TOTAL: $667 / month
We have reduced our minimum monthly debt obligations by $1,086/month. That is an awesome chunk of change.
When our credit card debt is paid off, our only debt obligations will be to our mortgage and student loan. Our current plan is to start hitting our mortgage because our student loans have a lower interest rate and with ours we can try to qualify for a forbearance if certain hardships occur. My husband and I both have loans and we never consolidated them together. So if something happens to one of us, the surviving spouse would not be responsible for the other one’s student loans. I really don’t like thinking about things like that, but it was a factor in our decision to pay off our mortgage next.
We will also start working on saving money. We’d like a bigger emergency fund, a new car fund and we need to get cracking on retirement savings. It will be a big period of financial catch-up after we’re done paying for past financial mistakes.