Monday, 2 January 2017
Wow! One year on the road to being debt free! What a year it has been . . . some ups and down, a change in mindset and communication about money and debt. All has been for the better, in the big picture, because we are much more in control of ourselves and our spending.
Unfortunately, we had to buy a car, and The Student’s loans are here to be paid off starting this month; consolidated to our advantage.
We are in the process of refinancing the house to lock in a fixed interest rate, and hope to be done in the next month with at least $500.00 less to be paid toward the mortgage, and hopefully much more. That extra money will be put toward the debt payoff, and will help speed it up considerably.
Meanwhile, there are plans and savings afoot for our August vacation, which is a road trip to Wyoming to visit some ancestral places, as well as to see some parts of the country with the in-laws. Brewing is also a cost being slowly factored in, with the creation of a new brew rig which will be more sophisticated than it currently is, and will be a switch from propane to natural gas.
This may not seem like a lot, compared to some who are managing to pay things off far more quickly than we are, but for us they are significant. Total debt reduction on the credit cards is about $10,000.00. There are still other cards needing to be paid off, but that amount is decreasing at a steady pace, ideally at $1000.00 / month. Savings is also steady at $1000.00 / month – for vacation, taxes, and other incidentals. The retirement funds are continuing to be funded at a regular pace, though not at the maximum allowable by law as debt pay off is more important at this juncture.
Besides improving our savings and our debt payoffs, we are doing so much better at talking about money without it being an issue. The big talk some months ago wasn’t fun, but it was necessary. The result is cleaner and calmer communication and being met with compromise and cooperation on both sides. We are now talking about things together, which is so important. One thing we have always had going for us is our mutual trust. It also helps we each get a monthly allowance, which lets us spend money without having to justify it.
In reality, our life changes were not huge – we seldom eat out, we don’t have cable that needs to be disconnected. The life changes were attitudes toward our money and how to spend it.
Just the other day I felt like there wasn’t any money to spend. We always had money to spend. We put things on credit cards, and had plenty of cash. We did not spend it on our bills or on our savings account. When I analyzed why I felt we hadn’t money, I realized it is because we are socking it away, and paying off debt. Out shopping with a friend the other day, I only bought some half-and-half and mints, along with a tablet of watercolor paper which was half-priced. I was looking at a new purse and a sweater – about $60.00 worth – which I didn’t spend because my mindset has changed: I didn’t want to spend the money even though I had it!
Finally, by reducing debt and refinancing the house, life becomes simpler. We have cleaned up various areas of our financial life, and it seems to carry over into cleaning up our environment. We have thrown out and given away more stuff in the past year than probably in the preceding ten. The fact that I didn’t buy a sweater or a purse attests to this. Kinda scary!
Looking ahead and using Debt Analyzer and our current budget, here are the projections for getting things paid off:
- Credit Card #1: February 2018
- Student Loan #1: November 2018
- Credit Card #2: April 2019
- Student Loan #2: December 2021
In my heart of hearts, I want Credit Card #1 paid off by June 2017. Can that happen? I don’t know. If our refi is good, it could happen. If not, its atrocious interest rate may make selling stock a viable option. That is a discussion to have with the accountant when we go in February for taxes.
Our 2017 Potential Problems
While we have good insurance, I’ve begun to have dental problems. Last year I had my first root canal. Now I am beginning to think I will need to go beyond the annual amount for bonding and another crown. I have an appointment next Tuesday to assess what is happening and set up some priorities.
Another potential problem is the need to fix the Acura for $1000.00. The air compressor is gone, so the air conditioner and defroster don’t work. It failed smog last month, but that is because it is seldom driven. The truck needs to have a bit of engine work done, that the DH can do, for about $200.00. It also needs to have a paint job to get rid of the rust spot on the top of the cab.
Taxes may need to be paid at either or both federal and state levels, in addition to the property taxes due in April.
And a January Challenge!
One blog I enjoy is Frugalwoods. And for January, Mrs. Frugalwoods is doing a one month Uber Frugal Month Challenge. I signed up for their daily inspirational email yesterday. One of over 7000 people, I hope I will be inspired. It certainly is something after the December holiday season to focus upon, and it does help keep that forward momentum momentumming. I am going to try to keep a daily accounting here on 182 Days – check it out at the top, or find the page here.
By nature, I am an optimist. Despite all the upheaval in the world around me, my own little world is pretty insular. Of course, that could change overnight. We are privileged in many ways, but that privilege has created a trap in that we have debt. Not as much as we did, but we still are caught in the American nightmare!