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Hope’s Debt Update – January, 2022

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Without further ado, these are my current debt numbers…well, the closest I can estimate based on paperwork from my insurance company. I haven’t received actual bills on some of this yet, but I’m preparing and want to make sure I capture it all.

Debt DescriptionOriginal Total (January, 2022)Current Month TotalGoal to Payoff
Medical - COVID Hospital Stay
5,129
5,129Jun, 2022
Medical - Hearing Aids
4,500
4,300*Sept, 2022
Medical - Testing #1
7,506
7,506Aug, 2022
Medical - Testing #2
5,900
5,900Apr, 2022
Mortgage
97,850
97,850
Student Loan
19,116
19,116
Total$140,001
$140,001

Since all of my interest rates are <3% I’ve prioritized the medical bills over my mortgage and student loans. I’d like to get rid of all the unsecured debt before I tackle my mortgage and then my student loans since if I were to die, they would die with me. (No, I’m not on death’s doorstep or anything, but that’s my reasoning for the priority.)

The plan

How will I do this? Well, I get paid from my corporate job twice per month. The first check will cover all my personal budgeted items that I listed in my last post. Done.

I’ve opened several new checking accounts to keep things in order and keep me from over-spending especially those amounts that are only deducted quarterly or twice yearly.

Anything left over will remain in my primary checking. When my second monthly check hits, the minimum payments on each debt will be made first. Then the remaining amount in that account will be sent to the priority debt beginning with my $5,900 medical bill.

I’ve been conservative with my payoff dates. But at the end of the month or really before that, my primary checking will be at $0.

And then I will start all over when my next check hits.

The numbers are scary

When I totaled this up for the first time (as I was working on this plan last week), I about choked. But here’s the deal. The total is less than my annual salary. And it includes my mortgage.

If I live on less than 1/2 my salary, I can definitely pay off all my debt outside of my mortgage by the goal date of June, 2023. And if I work hard and stay focused, I truly believe I can pay off all debt by that date.

My consulting business continues to bring in steady income which I am just letting build right now. I will decide when to dip into that this summer as I re-evaluate things then.

*This number is an estimate. I’ve had a TERRIBLE time working with this lender. Their statements rarely arrive, they don’t “receive” payments and then charge me $40 late fees, etc. Just had a call with them and they are expediting a new bill for me and crediting my account for fees. Thankfully, I pay through my bank so it’s very easy to “prove” that payments were sent in a timely fashion. Not sure where the money is going, but they are straightening it out. Should have accurate numbers next month.

 

 

Why I Listen to Dave Ramsey…

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I received a lot of comments over the years that I should stop listening to Dave Ramsey. There are better, faster, easier methods to pay debt, earn, save, and grow money.

Why do I still listen to him? Two big reasons…

1) I’m debt free and I’ve stayed that way for 5 years. It’s like telling someone who lost a ton of weight that their diet plan sucks and there are better ways to lose weight. I’ve lost the ‘weight’. I’ve kept it off. The method was effective. To me, that’s kinda all that matters.

2) 2017 happened. I had the money to pay off my debt in 2016 but ‘Dave said’ to push pause on paying debt when pregnant and pile up the cash just in case something went wrong. I had three very healthy, very easy pregnancies up to that point. This just seemed like bad ‘Dave’ advice. Way too conservative. Then my son’s heart stopped. Emergency c-section. NICU. Rough recovery. Never once did I worry about money because I had plenty piled up just in case. I was able to solely focus on my son. It was worth every single extra penny I paid in interest.

Dave is very low risk. He leans heavily on Tortoise moves. Sure, I could do WAY better, more complicated, things with my money than pay cash for my house. I could finance it and invest that cash. There ARE better financial moves. Moves that involve more risk and more reward… but quite possibly, more loss. But here’s where I’m at. I can own my house outright. I can continue to invest 15% in retirement. I can continue to only buy things I can afford.

…And I’ll retire just fine.

I choose the tortoise.