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An Update on Our Debt Progress

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My husband was out of town at his grandma’s funeral this weekend, and I had some quiet evenings to do some reflecting. One thing I wanted to see was our progress with our student loan. Is all this hustling and cutting back making a difference? So one night I put together a new spreadsheet (because I know how to party).

And then I had a major reality check.

I’ve been good about tracking certain numbers, but I didn’t have one chart that showed all our progress. I especially wanted to see how much we’re really paying each month, and how much longer until this is all over.

Debt Progress

 

Wow. Anything jump out at you? Here’s what made my eyes pop:

A year ago, we were literally never going to pay off our loan.

I did not understand just hoooow loooong we were paying off interest only on our loan. We were income-based for years, and then flat-out negligent. That means that less than a year ago, we were set to pay on this loan perpetually, always, henceforth, and forever. We were never going to shake this thing! How were we sleeping at night?!

I felt like we were making more extra payments than we actually are.

“Feeling” like you’re doing something and actually doing it are totally different things. When we refinanced with Earnest last September, our monthly loan payment jumped from $1,821.39 to $2,302.49, so it already felt like we were paying a ton of extra.

Even though it’s in our budget to put our monthly excess towards our loan, I hadn’t appreciated how many months we sabotaged our “extra” plans and used that money for other things. We’ve either paid ourselves less from the business and lived off the extra, or we’ve used that extra for necessary things that should have come from our emergency fund. Sloppy, sloppy.

 

This was a wake-up call. Yes, we’re making debt progress. I’m seriously grateful for that. Paying it off in 14 years is better than 55 years (and definitely better than infinity and beyond). But when we refinanced to a 15-year loan, we vowed to pay it off early. It’s time to actually do that.

The next auto-payment on our loan goes through this Saturday, and I’ve already scheduled an additional $2,015 to put towards it that day. (I’m using money from that refund check from our state, but we decided to save the rest. We were warned that once your state audits you, it’s only a matter of time before the IRS comes calling. So that’s cool.)

Our principal balance today is $290,932.25, so after this weekend we’ll pass $290,000 and hit the first mini-milestone we set for ourselves. We’ll mark our debt progress on our charts with our kids, and then enjoy some “real” pizza (after tons of homemade, we’re ready for you, Papa Johns).

That spreadsheet should be looking better and better these next few months. Stay tuned.

Learning New Financial Lessons…

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Remember the post where I was upset because I felt like I was being called a financial moron for letting my emergency fund dip from buying a new trailer while I waited to sell the old trailer?

Whelp. I’m circling back to say…it was a bit moronic.

Here’s the deal. I don’t think letting my emergency fund dip from 6 months to 4 is a terrible thing. It’s still within the ‘acceptable’ range and if a real emergency happened during that time, I could have had a ‘fire’ sale on both trailers and been made whole nearly instantly. That said, I felt a larger sense of urgency to get rid of the trailer than I would have otherwise. Had I used a larger portion of my emergency fund, I would have been in an outright panic.

Panic is never a good place to be when selling a vehicle.

We spent many weekends and late nights showing the trailer because the thought of limiting the hours for viewing might make us miss the sale. I advertised everywhere and management those ads was a hassle. My phone was ringing non-stop. I even considered delivering the trailer to a property off a rough dirt road 45 minutes from my home which would have been a liability nightmare.

How Long Did it Take to Sell?

It took four weeks to sell the trailer and we ended up getting a little less than we hoped (but still within the planned amount). We had another offer on the table for more but decided to go with the lower offer. I swore that I’d never take a lower offer just because someone had a good story but… that’s what happened.

Karma Makes Me Eat My Words Often.

We had the choice to sell the trailer to a single guy who was going to live in it who offered full asking price or sell to a retired couple who shared their desire to take their grandkids camping. Our trailer has been such a huge part of our lives and we’ve made so many special memories in it for the last few years that I wanted someone to continue that tradition. I know it’s an inanimate object. It doesn’t have feelings. But I couldn’t stand the thought of it parked somewhere. It’s our gift of adventure to their grandchildren.

What Was the Lesson?

I did receive some great ideas on how to avoid this predicament in the future. It seemed silly to have a fund in addition to my emergency fund for these types of situations but the more I thought about it, the more it made sense. We decided to start that fund right away… well… next month. This month our account is running on E. But hey, at least my emergency fund is full again. Whew.

Thank you for the suggestions. It was an interesting lesson to learn.

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