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 Description||Original Total (January, 2022)||Current Month Total||Goal to Payoff|
|Medical - COVID Hospital Stay||5,129||5,129||Jun, 2022|
|Medical - Hearing Aids||4,500||4,300*||Sept, 2022|
|Medical - Testing #1||7,506||7,506||Aug, 2022|
|Medical - Testing #2||5,900||5,900||Apr, 2022|
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.)
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.