Cracking down on debt repayment
7/16/2008 11:34:00 a.m.My HELOC has now been funded and I have paid off the other, smaller, LOCs I had and that feels great. I know that the debt is just transferred to another place but it is now at a far lower interest rate. I have formed a plan of attack for dealing with this debt and that is to put a minimum of $1200 toward the debt each month, which will see the $19K paid off in just over one year. I then plan to continue making those payments and snowball them will the payments that go toward the mortgage portion of the HELOC, which would see the balance paid off in just a few short years. Knowing that I could be completely debt and mortgage free in just a few years is very exciting.
It seems silly but I am looking forward to Aug 1 when my first payment is due.
5 comments:
Hi, Gail here from TDDUP. I was wondering if you've got a healthy savings and emergency fund set up and enough wiggle room in your budget so that you're having fun. I applaud your huge drive to get rid of ALL your debt ASAP, but sometimes find that once the bug has bitten, people swing too far in that direction, failing to take care of some other important business, fun being one. If you have a good savings and emergency fun, and you're having fun, then you can just blow me away. If not, however, I'd suggest you put some of your $1200 for mortgage repayment toward building all three. Mortgage debt, while expensive over the long term, should not be paid down agressively at the cost of ensuring you have a safety net, some security in the futre (no your paid-for home isn't it) and a hoopla or two in the here and now. Good luck. Congrats on your progress and keep up the good work. cheers, g
GAIL! You read my blog? I am so honoured. I love your show and have been watching a few eps each night via slice.ca.
Thank you so much for your advice. I don't have a really large emergency fund set up but do have $1000 put away for emergencies. I wrestle between having a lot in an emergency fund vs. putting that money onto the consumer debt. Not that long ago I took the $1000 I had in the emergency fund and paid down the MasterCard. I have since re-built the emerg. fund up to $1000.
I also have $100,000 in savings (RSPS) and put an additional 10% of my pay into my retirement fund each month.
I do allow myself to have some fun. I have a virtual entertainment and fun money "jar" which allows me to go for drinks and nibbles with the galpals once a month or so and also allows me to take in a movie or go for lunch with my mom, etc.
Thank you so very much for taking the time to write. I appreciate your feedback.
P.S. I work two jobs and my second one brings in $600/month which goes straight to the debt so only an additonal $600 is coming from my full-time, bread and butter, job.
This is something I struggle with all the time too! I just hate having the debt hanging over my head and want to aggressively get rid of it!! Mine is all credit card debt though...so probably a little different.
Gail, if you're still reading, I should also mention that I have a buffer of 1 full month's worth of expenses in my chequing account at all times so I'm always living on last month's money. My July month end cheque will be for September's expenses as the funds for August's expenses are already in the account.
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