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December 28, 2017
The Magic Number: How We Paid Off $23k in One Year
2017 was not my year. Anyone who knows me well can attest to the truth of that statement, and looking back on it, I don’t exactly know how we made it through. From a loss in the family to our house falling apart, from job uncertainty to being evacuated during the wildfires 2017 tested me in ways I hadn’t previously fathomed, but through it all we also had some big wins. I started this blog (yay!), my husband and I both started new jobs that we love, and to top it off, we were able to pay off nearly $23,000 in debt! In the face of adversity and despite a long string of bad luck, we pushed through and made some huge strides financially this year. So how on earth did we manage to do this?
*** DISCLAIMER: Before I give you the breakdown, I’d like to note that I did not include payments we made to credit cards this year, since we also used them. I know that’s a huge no-no in the debt-free community, but flying back and forth from Southern California to New York half a dozen times when we hadn’t planned on it meant that we had to make some adjustments (#forgiveusDaveRamsey). With that one exception, here is the breakdown of our debt payments this year:
I started this year knowing that one of my goals was to have my student loans paid down below the halfway mark by my 30th birthday in June. I made that goal with days to spare, and am so excited to be on the other side of it – to read up on my student loan payoff journey, check out my post here! I was able to pay off my quarterly loans in full as well, which was another goal of mine; tracking payments monthly is hard enough, but making double payments every 3 months was killing me, so I’m beyond happy to be done with those. This is a great example of when veering off the debt snowball makes sense; cash flow should always be taken into consideration, and so should your sanity!
My total balance is below $15k now, and I’m determined to throw everything I can at this balance in 2018 to knock these out. My conservative goal is to pay off another $5k in principal in 2018, but I would love to cut this balance in half down to $7,500!
Yes, folks – I spent money on something I didn’t “need”. My eyesight has been an issue since I was a kid, and after 20 years in glasses and contacts, I finally had enough. I cannot recommend this procedure highly enough to anyone thinking about it, and it was far more affordable than I’d originally thought. I chose a zero percent interest payment plan and my only caution is to read the fine print; they set up your automatic payments so that you go just over the time-frame for the interest-free option, and then back-charge you at a super high interest rate, but all you have to do is set your payment a little higher to pay it off before the deadline. This is a typical strategy for most low or zero-percent offers, so do your homework and know what you’re signing up for before-hand; you can use these offers to your advantage (seriously, I can see everything!), but you just need to be intentional with your repayment strategy.
I’m set to pay off the balance in November of this year, and then can roll that money into my debt snowball!
We bought this truck new in 2014 and got an incredible deal through a family friend, so 3 years later it’s still worth a lot more than what we owe on it. This is our reliable, every day vehicle that we rarely have to worry about, and up until our most recent service, everything was covered under the original warranty & maintenance plan, so we’ve been very fortunate in that regard. We have discussed swapping this out, but we’re torn – having a vehicle we can always count on has been a source of comfort in some otherwise very trying times, so we’re hesitant to let this thing go. This truck is great for a lot of reasons – one of them being the super low interest rate – but we’re not against the idea of making a change in the future; for now, I’m just glad we’ve got the balance paid off to where it is!
We’re going to continue making the normal payments for now, but may consider swapping this out for something different in 2018 to bring our payments down even further.
I am delighted to share that as of last week, one of our trucks is now completely paid off! My husband bought this thing almost exactly a year ago, and 2 days later we drove it across the country – it’s been to the Grand Canyon, Yosemite, and is our “project” vehicle, but we absolutely love this thing. While it’s required a little more work than Truck #1, it’s worth more than what we paid & my husband gets offers for it all of the time. With this thing paid in full, we might consider letting this thing go, but for now we’re just excited to have it paid off and will look forward to that title in the mail!
Now that we’re done with these payments, we can roll this into our debt snowball!
I know that some people wouldn’t include the mortgage in their debt payoff total, but I have a few reasons for doing so. First off, even if this is “good” debt, it’s still debt in my book – we owe this money, we pay interest on it (even if it’s low), and I’m going to celebrate this accomplishment. Second, this is money back in our pockets someday when we decide to sell – while owning a home is no walk in the park, especially for us this year (#ripkitchen), this is still a better alternative in my book than putting that money in someone else’s pocket. Renting was perfect for us as a newly married couple (see how I threw our wedding for under $10k here!), but we knew that we wanted to buy as soon as we could for this reason. I’m the first to admit that buying a fixer upper isn’t easy, but we know that our investment will be worth it in the end. Until then, we’re trying to get the work done as quickly as we can and embrace the madness in the meantime – progress over perfection, people!
We’ll continue making our normal payments & finish the work that needs to be done; there’s a lot to do but we’re making headway, so we’re hoping to keep that momentum going in the new year!
For those of you keeping track, that brings us in at $14,487.26 in non-mortgage debt, for a grand total of $22,950.58! My sister suggested that I make a small payment on something for $49.42 to give us a nice, round number of $23k, but somehow I think this “just shy” number is more indicative of our year; we had a truly tough 2017, but it motivates me to do even more the coming year. We have a lot on the horizon in 2018 but I can honestly say that I’m excited to move forward and embrace the changes to come.
If I had to pull a lesson out of all of this, it would be that there’s no “good” time to start your debt-free journey, or any other difficult change for that matter. Life happens, curve balls get thrown your way, and all we can do is learn to adjust and recover quicker, and to reflect more of the strength that these experiences instill in us. On that note, I wish you all a Happy New Year, and a restful time before we get ready to tackle 2018!