The slow March begins...

The last 4 months have been great, haven't they?  In each of the last 4 months we've paid off a loan!  It seems so crazy sitting here thinking about it.

In November we paid off the truck.

In December and January we paid off two of the Gate loans .

In February we paid off the ECSI loan and the third Gate loan.

In short, we killed it.  We really focused, even while going through the holiday season, and we met our goals.  And now comes the hard part.  

The remainder of our loans are all multi-month projects.  We knew this was coming, but it does derail the momentum a bit.  Paying off a loan was a nice way to end each of the last few months.  It allowed us to build a lot of momentum and fine-tune our spending habits that will propel us through the slow March that's upon us.  (See what I did there?)  Our next estimated payoff date (EPD) is April, and that will be one of Kristi's Stafford Loans ($4600 @ 6.8% Interest).  

Let's recap The List, shall we?

The List

1. The Truck
• $2,256 - PAID! (Nov 11)
2. Gate Loans
• $2,604 - PAID!! (Dec 11)
• $2,628 - PAID!!! (Jan 12)
• $2,799 - PAID!!!! (Feb 12)
• $4,978 - EPD:  June 2012
3. ECSI
• $5,486 - PAID!!!! (Feb 12)
4. Stafford Loans
• $4600 - EPD:  April 2012
• $5848 - EPD:  October 2012
5. Federal Direct Loan
• $22,495 - EPD:  July 2013

The more observant of you will notice a large gap between EPD of the Gate and second Stafford loan.  In previous years we stored money over the school year to cover the two months Kristi doesn't get a paycheck.  We realized that this money we were saving would almost all go to loans anyway, so we decided to stop saving and start using it towards loans now.  However, the drawback is that in August and September we won't have a snowball.  We'll make the minimum payments, but that's it.  Kristi is doing summer school this year, so that may change, but right now we're not planning having large snowball funds in August and September.

I'm incredibly happy with our current progress.  In the last 4 months we've paid off roughly $15,780 in loans.  I am amazed at that total.  I knew we were capable of this, but seeing it in print is still jaw-dropping.  It's also amazing that we're in month 5 of a 22 month plan, almost 1/4 done.  I say 22 months because with our progress so far we've cut a few months off the total time (even including the Aug/Sep no extra payment months).  


I want to thank everyone for the support.  It's really great to know we're on the right track and that everyone understands and supports us.  It's been hard saying no to a lot of the fun stuff we've had to cut back on, but in the end we'll be able to do so much more that it'll all be worth it.  Besides, we still have Alaska 2012 to let our hair down a bit on, so we can recharge and refocus when that trip is over.  It's very exciting to see where we were, and where we are headed.  Let's do this!

On the Road Again!

I'm on my way to California for the Christmas and Kristi and I have been listening to a lot of people call in to the Dave Ramsey show with huge problems.  Problems with their husband/wife/significant other/family.  Problems with their management of money.  Debt problems, health problems, car problems.  It really makes me appreciate all that I have, and all the plans I have to continue the success we've achieved in 2011.

First of all, let's begin with my lovely wife Kristi.  We've been together for 7 and a half years, but we've only been married since May 2011 and I couldn't be happier.  Statistically the number 1 reason for divorce is money issues.  As the saying goes, "It's not 'till death do you part,' but rather "till debt due you part."  I am so incredibly fortunate that Kristi and I are on the same trail together.  She has been working on me for awhile, but I had to come around on my own.  And I'm so happy that I did.  Kristi and I have struggled with finances in the past, but we're both on board, we've circled the wagons, and we're on our way.  I don't think I could do it without her, and I'm so glad I'll never have to.

Secondly, I want to reflect a bit on how much 2011 has changed my life.  I think this will always be a year I look back on and marvel at just how fortunate I've been.  The year started off with landing a job at Optimize Technologies and I love my job.  Every day I go to work for a locally-owned company that cares about me and that wants me to succeed.  I enjoy everyone I work with, the atmosphere fits my personality perfectly, and the only direction I've gone in the almost year I've been there is up.  I've heard some whispers on the next step at Optimize, and I'm catiously optimistic about my review next month.  Stay tuned for an update on that front.

The year continued with my wedding and subsequent honeymoon.  I'll always remember my wedding as one of the happiest moments in my life.  I was surrounded by my closest friends and family as I made the committment to Kristi and I will be eternally grateful for all the help and memories everyone there shared in.  And then there was the honeymoon!  Words can't explain how great that was, and I'll always remember it. 

As the year continued I made new friends and deepened other friendships on and off the softball field.  I couldn't ask for a better group of guys to spend a few nights a week with.  I'm looking forward to the 2012 season that starts in a few weeks (cold!!).

In September Kristi resumed school and thus far has had a much better year than last year.  She's comfortable in her role and the kids are much better behaved for her because she has the confidence that comes from someone who knows their position and how to get the most out of the kids she has.  It's really been helpful for our relationship as she's not bringing home bad experiences every day.  To me she is happier than sh's been in a long time with being a teacher.

In October we had the priviledge to stand witness at our best friends' wedding.  The lead up, the ceremony, and the reception were great and I really enjoyed meeting Tamara's friends and family, many for the first time.  I am so happy for them and I know now that the clock is ticking before our lives are full of baby joy.

And finally I want to look back on the debts we paid off this year, and the debts we're on track to paying off next year.  This year we paid off a small student loan that my mother had to co-sign for when I was in college.  This was very important to me because I didn't want my mom to have to assume any risk on behalf.  She was gracious to do so when I was in college, but I no longer wanted to have her in that position nor do I ever intend to put ANYONE in that position again.  After that we took care of some other small loans/credit card debts.  We (or rather, I) wasn't as committed as I am now, otherwise we would have done much more.  We had a balance on a Home Depot card for our carpets (at 0% interest for 12 months) and I had a balance on a ShaneCo card for the wedding gift I gave Kristi (also at 0% interest).  Even though they were 0% interest, the priciniple of being beholden to a credit card company frustrated us to no end.  Part of the plan is to cash roll everything, so we knocked out those debts quickly.  We also took care of the truck and the first of 4 Gate Loans through American Education Services, the recent one happening last week!

For 2012 we're on track to pay off the following loans:
January 2012:  Gate 2 ($2500ish)
March 2012: Gate 3 ($2800ish)
May 2012: Gate 4 ($5000ish)
July 2012: ECSI ($5300ish)
September 2012: K Loan 1 ($4800ish)
December 2012: K Loan 2 ($5500ish)

Wow...  Just looking at that makes me smile.  We're on track to knock out 6 (SIX!!) loans this year based on our currect incomes and payment plan.  That's awesome and I can't wait for 2012 so we can meet this challenge head on.

Merry Christmas everyone and may the New Year bring you new joys and adventures!

October Debt Process, October Budget

October Snowball Progress

I plan to update each time we make a payment on a debt and to update the remaining.  This is the first of such updates. 

This month, as the previous list of debts indicated, we paid money toward the truck.  $1,420 to be exact.  As I said in my post about Riley, this is less than our goal of around $2,000 towards debts each month.

After the payment processes, we’ll have just about $940 left to pay on the truck, which we’ll finish up in November.  This is very exciting as not only will we own the truck, we’ll be able to adjust our insurance on it down from full coverage, which the bank requires for the loan, which will save us some money each month.  It may not be much, but every dollar counts when it’s going towards debts.

Also, we plan to make the trip to Salem to the Oregon Community Credit Union (the closest branch of the bank that our car loan is through) to pay the final $940 and be done with it.  I think it will be valuable and important to pay the final payments on each debt (whenever possible) in person for the sense of accomplishment and pride in our achievement.  I know it doesn’t seem important, but I feel like taking the final step in person will provide a much better sense of fulfillment.  We plan on doing that next week, so stay tuned for that report!

October Budget

I’ve been meaning to write a post about our Monthly Budget for some time now, but the end of the month is coming quickly so I won’t bother with a full post this month, but I will outline the budget we’ve lived under this month.

Typically our total spending money for the month is about $1,000 to $1,100.  This amount fluctuates up and down depending on the planned and unplanned activities over the course of a month.  Each month we sit down and see where we’ll be spending money and plan accordingly.  Unfortunately we didn’t adequately account for Halloween so we’ve over spent a bit on our clothing budget this month for our costumes.  I think also the trauma of re-homing Riley caused us to not want to cook and we ate out more, which literally ate up our Recreation budget.  However, being able to adjust the budget each month helps us to plan for events like holidays/birthdays so we’re not constantly overspending or eating out all the time since we have a budget to live within.

Budget

Pets                     $50.00          (food, toys, etc)

Clothing               $50.00          (sundries, clothes)

Recreation           $150.00        (eating out, movies, date nights)

Personal              $150.00        (household items, toiletries, etc)

Food                   $300.00        (breakfast/lunch/dinner items)

Transportation     $300.00        (gasoline mostly, parking, maintenance)

That is a typical budget we work from.  I’ll post a full overview of November’s budget next week so I can report at the end of the month on how we did.  Currently we’re not doing that great with October, having gone over budget in a few categories, but we’re still overall on track with our budget (we can shift some money from unspent categories to cover the over spending in others, but we try to avoid that since we’re overspending). I’ll post a recap of October next week as well. 

The Loans

The List

1. The Truck
• $2,256
• Estimated Payoff Date (EPD): November 2011
• We decided to upgrade my truck from a 1993 GMC Sonoma to a 2001 Chevy S10.  It's bigger, it has 4WD, and it can get us, our stuff, and the dogs around easily.
2. Gate Loans
1. $2,604
2. $2,628 
3. $2,799
4. $4,978
• These are some small loans from Willamette that were mostly for living expenses and books.
3. ECSI
• $5,486
• This is a student loan from Willamette
4. Stafford Loan
• $10,942
• This is Kristi's loan for her MAT program at Willamette.
5. FSA
• $22,495
• This is several federal student loans consolidated into one loan payment.  Had I to do it over again I wouldn't have consolidated and kept them separate as they would have been smaller loans we could have paid off individually as time goes by to keep us motivated.  As it stands now this loan looms large at the end of trail. 

Grand Total: $54,000 and change

This is the goal: Debt Free in 2 years or less.  Piece of cake.

Each month is a new challenge, especially as the holidays approach.  Kristi and I recreate our budget each month based on upcoming events and past budget history.  For example, next month we'll increase our food budget because we'll be hosting Thanksgiving for Kristi's family and therefore will have to buy turkey and most of the food to make the side dishes.  In December we'll increase our Auto Expenses because of our planned trip to California to visit my family.  

However, the plan each month is to contribute about $2000 towards loans.  This includes their minimum payments and our Debt Snowball money.  The minimum payments are fixed, but the Debt Snowball will fluctuate each month depending on our budget and if any needs/emergencies pop up.  This month we had to take Riley to the vet, so our contribution will be about $1500 instead of $2000, but hopefully we'll average $2K and above.

As we work our way through the list I'll make a post when each debt is paid off and how we reacted to paying it off.  I'll also update the remaining debts and post a goal for the next pay off date.

Feel free to play the home game along with us as we begin our Oregon Trail to Debt Freedom.