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Posts tagged with: Total Money Makeover

Ashley’s December 2015 Debt Update

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Here we are on the last day of the month/year. How has your December been?

Aside from a couple little financial hiccups, ours has been fabulous! During the school break I’ve actually unplugged for full days at a time (a rarity, especially when you work online!) and its been great to just be around and enjoy family without constantly checking email!

But let’s not forget why we’re here. We had some lofty goals in terms of debt repayment that I wasn’t sure we’d meet this month (in fact, I have said several times we probably would not meet our goals).

After all the dust settled and the paychecks had been cashed, let’s see how things shaped up this month.

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Capital One CC-17.9%-Paid off in March 2014$413
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
BoA CC-7.24%-Paid off in June 2014$2220
License Fees-2.5%-Paid off in April 2015$5808
Navient$82,1776.55%-8.25%$277December$80761
ACS Student Loans$85966.55%$20December$8215
PenFed Car Loan$31812.49%$1800December$24040
Balance Transfer student loan (Former Navient 1-01)$26120% (through April 2016)$400December$5937
Medical Bills$59360%$25December$9000
Totals$102,502 (Nov balance = 104,704)$2522Starting Debt = $145,472

After all was said and done, we ended up paying just over $2500 in debt this month. Our initial debt payment was actually about $300 lower than this, but I squeezed every spare penny out of the budget and was able to make an additional last-minute (December 30th) extra payment to the car loan.

Our final consumer-related debt, the car, is now at a balance of $3,181. And our overall debt balance is at $102,502. So we did NOT make our goals of paying off the car or dipping below $100k in debt this month as we had hoped. 

That being said, come hell or high water, we will meet both of these goals in January. So we’ll be a few weeks behind the initial goal, but not by much.

Another one of our 2015 Financial Goals included paying $30,000 total toward debt during the year. Here’s where our final debt payment numbers landed:

January $1678
February $1822
March $653
April $1796
May $1708
June $725
July $2125
August $2250
September $2575
October $5513
November $2751
December $2522
Total $26118

So, again, we didn’t quite meet our goal, but we weren’t terribly far off either.

Overall, I’m quite proud of how well we’ve done in 2015. Let’s not forget that hubs’ business has had a bit of a rough year. His income wasn’t as high as it was in 2014 (and he had a couple months with no income whatsoever). Plus, I didn’t start my full-time job until the end of summer, so my income didn’t increase until the second half of the year.

When I set our goals, I always like to set “reaching” goals. This means they’re not easily attainable in-the-bag type goals. They’re goals where the numbers don’t quite work and, yet, I set the goals anyway because I want something to reach for and work toward. So the fact that we didn’t quite make our goals doesn’t bother me as much as one might think (though, don’t get me wrong, I would have LOVED to reach our goals!). My point is simply that I think the goals did their job. They made us work hard to try to do something crazy – something the numbers said wouldn’t or couldn’t work. And we made incredible progress, so that’s something to be proud of.

And, I have a mini-secret up my sleeve. My “ace in the hole”, if you will.

Just as former blogger Adam posted that he and Emily are effectively debt free (see their update here), I have similar news to share. You know how every month I’ve reported that I’ve been saving money toward Cruise 2016? Well, guess what…

As of this month (December 2015), I have $3,300 in one of my Capital One 360 savings accounts for the cruise. But the next cruise payment isn’t due until February 2016. So what I’m saying is that we actually have enough liquid cash available to be entirely consumer debt-free today.

In fact, I had initially planned to “steal” from myself (from the cruise fund), pay off the car in full, and then spend January/February re-saving that money for the cruise. However, after the unexpected extra expenses this month coupled with the fact that we really have little-to-no additional savings to speak of right now (not to mention we’re still in Texas so if we encountered any problems on the trip back to Arizona, etc.) I wanted to err on the side of caution and keep that money in the bank.

That being said, mark my words:  We will be consumer debt-free in January 2016. Hopefully we’ll be able to do it the old fashioned way (i.e., using our pay to finish paying off the last consumer debt). But even if something crazy happened, we had extra expenses or whatever, and we didn’t have enough money to quite cover the full amount of debt, I fully intend to use all our available capital (including the cruise fund) to MAKE SURE our consumer debts are fully eradicated before the end of January.

So we are effectively consumer debt-free now (in the sense that we have the money to pay off the last of our consumer debt), but we will become actually consumer debt-free within the next couple of weeks.

You can imagine that this is one of the biggest things on the forefront of my mind and I basically can’t shut up about it. My family has asked if it feels amazing and, although it feels pretty good, I still think there will be a big difference once I actually transfer the funds and see zeros on the balance owed of our vehicle. Just thinking about it makes me smile. And now I’m totally “that person” because I bought both my sister & my brother a copy of Ramsey’s The Total Money Makeover for Christmas (during their $10 sale! Couldn’t pass it up!) Edited to add:  This is totally creepy, but the link to Ramsey’s book automatically appears, perhaps since it’s tagged to this post. I did NOT link it myself, nor is the link an affiliate link. In fact, it seems like I cannot remove the link without changing the wording of the post to not include the book’s name. Really weird/creepy, and I don’t particularly like that, but just wanted to be transparent that the link appears to be an auto-generated thing and I do NOT make any type of money or kick-back if you buy the book.

Just to be clear, I don’t blindly follow everything Ramsey says (as you can tell from my 2016 financial goals), but I do credit him (and Bobby Bones!) with jump-starting my mission to become debt-free. And I want to spread the message to those I love! What better gift to give than the gift of financial freedom? LOL. A bit of hyperbole (it’s not like I’m paying off anyone else’s debt), but it’s like giving a roadmap that can help others, so of course I want to share that information!

Anyway, this post has become entirely too long and I’ve got to run! New Years Eve is my birthday and I have lots of fun plans for family time, getting my hair professionally cut/colored (gift from my Mom and the first professional job in a really long time), lunch with my Dad, sparklers with the kids, etc. etc. etc.

I wish everyone a safe and happy New Years! I’ll catch you on the flip side! 😉


My Debt Reduction Story

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This is a guest post from reader Jennifer who is 32 years old, married, with no children, 2 dogs and a cat. She lives in a rural part of Virginia and just started her debt reduction in February 2012.

Debt…A monosyllabic, 4 lettered word, such a small word, but can get you into so much trouble. Like most Americans, I assumed that carrying debt was just a way of life. I graduated from college with debt, bought a brand new vehicle, bought a house 2 years after graduating from college and just assumed that I would always be in debt for the rest of my life.

Fast forward 5 years, by this time I’ve paid off my vehicle (affectionately named Eleanor), married and acquired 2 dogs and 1 cat. Although I loved my little house we decided to sell and buy a larger house with a little land. Luck would have it that we found a foreclosure! The house was originally for sale for $250k; not really in our price range. The sellers kept dropping the price; or rather Freddie Mac and they dropped it into our price range. We put in an offer, it was accepted, and with the money we made off the sale of my house; we were approved for a loan of $169K. Husband’s car goes kaput and we have to get him a new one, a new loan of $17K. My student loan was originally $12k, but I had whittled it down to $6K.

Now with all my rambling from above, are you keeping track of my lovely debt record? Almost $200k in debt…OMIGOD. I think I just had a stroke. Actually, I got really pissed; pissed because I’d been raised smarter. What was I doing?

I had listened to Dave Ramsey on the radio and always wondered how in the world do people get out of debt? So, I went to my library and checked out his book, The Total Money Makeover. I personally found it one of the easiest books to read on debt management/reduction. His ideas and logic made sense to me; my husband and I were just throwing money away each month.

I am in charge of the money and bills for our household. My Type A personality does not want anyone else dealing with the money; I have to know where it goes and when each month. The problem was I did not know when and where it was going. I had no idea actually; all I knew was that we looked excellent on paper, credit scores and repayment histories. Seriously, is that how I wanted to be known? Was that going to be my legacy?

Dave told me to tackle the emergency fund first. DONE, $1000 in the bank. That was actually the easiest part. 2. Start repaying debts, starting with the smallest amount. I had started repaying my student loans in the Fall 2003. My original payment was $120; I consolidated to 2.5% and $88/monthly. Repayment would reach finality in 2019. 16 years of repaying my student loans.

People I would talk to said, “Oh, don’t worry it’s such a small amount it doesn’t matter.” Seriously?? I think it does. Starting in February 2012, I started throwing every extra dollar I could scrounge up at this debt and am happy to report that as of May 18, 2012 that my student loan debt is repaid!!! I am no longer a slave to Sallie Mae; actually she owes me 2 cents (think I’ll see that?). I called my husband to tell him what I/we had done and his response… “That’s awesome, what’s the next debt we are going to tackle?” Um, excuse moi, for reals?

Let me tell you people, this man was skeptical. He told me let’s try Dave’s plan for a few weeks and see how it goes. Well, it went GREAT! He is right on board with the plan now, and I love it! We pay for everything with cash. Here is how Dave’s plan works for us:

1. The beginning of each pay period, I pay all the bills with checks (I know I’m in the stone age, but I don’t like to use automatic debits except the car payment and mortgage).

2. I pull out anywhere from $400 – 800 for spending cash, gas, miscellaneous expenses, food etc.

3. When it’s gone, it’s gone.

4. If we need anything, we save for it. Case in point, my husband wants/needs a new boat battery. I told him he’s going to have to wait until we can pay cash for it. We don’t even use debit cards anymore.

This has been a real lifestyle change for us. But, I also know that I AM going to be one of the very few who has no debt and no credit score BECAUSE I pay for everything with cash. I realize that this might sound silly to some people, saying you need a credit score for some things. Why? Because that’s how it’s always been done? Nope, not anymore.

Both of us have given up a lot of things, I’ve given up pedicures. I loved them! My husband, I think, dreads mealtimes mostly because we don’t eat out anymore. No more restaurant dinners or quick stops to grab something. It’s healthier for him in the long run and I have to say he has lost a ton of weight and is looking mighty fine these days.

So, our debt reduction lifestyle continues. I know it will take a few years to get where I want to be and it is frustrating at times. I don’t by any means want to belittle this plan and say it’s easy; it’s really not. I know Dave’s plan is not for everyone; sometimes it’s just not feasible. I really like the idea of not using debit/credit cards, taking out consolidation loans, to get out of debt or enter into debt settlement. Cash seems to work for us. The one thing I don’t care for with Dave’s plan is stopping your contribution to your retirement plan to assist with paying down your debt. I still contribute $700/monthly to my employer’s plan. My peace of mind is worth it and to my husband, even if he doesn’t know it.

I look forward to the lifestyle we can live after our debt is gone. There are also more money saving/debt reduction tips I could share. Maybe if I’m allowed to write another article I’ll share those. I guess the one thing to remember, is you’re not alone in your fight with your debt.

I’ve shared our plan with my family members and although they made fun of me initially, they are now supportive of my mission. It stinks and sometimes I want to throw up my hands and just use my cards to get what I want NOW! I’ve learned that my sense of entitlement is pretty selfish, and if I wait, I enjoy things more.

We live in a society of right here, right now. It’s pretty sad considering where my grandparents came from and how they lived. Debt was unimaginable to them. How did our society get away from that? It’s astonishing how far my grandmother’s salary could go; we could learn a lot from that generation. Maybe we should.

*Side note…When I told my sister I had paid off my student loans, she told me I was one of the 1% population who had accomplished this. WOW, what a sad statistic.*

Are you interested in guest posting? We love to receive stories about different aspects of personal debt. It doesn’t matter if you are a seasoned debt blogger or you have never written anything before, but have a story that you would like to share. We’re always on the lookout for different perspectives about debt. If you’d like to share your personal debt story, please contact us.