Today is our 8th wedding anniversary. I think we’ve had a great eight years and I still think my husband is lovely most of the time :-).
I don’t know exactly how much debt we entered our marriage with… enough, to be sure. We weren’t doing a super job of looking at it all. Honestly, looking at all the debt is really painful. So… we’ve been sort of ignoring it, which is a terrible idea. So this spring I decided to take a look and add it all up. And added up… it’s truly awful. Because I want to be super terrified by the debt, I include cars, mortgage and home equity line and student loans in the grand total.
April 20: 403,438.14
Oh my god. What the hell have we been doing and where is all our money going? We don’t make minimum wage here, but I did stay home with the kids for three years. I’m not sure if our debt would have been better or worse if I had continued working full time — childcare costs for the last (nearly) two years are painfully prohibitive.
Just to clarify — we do not take expensive vacations. We haven’t flown anywhere since our honeymoon eight years ago. We do have a little bit of a home-improvement addiction, I suspect. Our house needed a lot of work and that’s certainly *part* of it.
But in April I made a budget and we’ve been pretty good about sticking to it. We both read Dave Ramsey’s “Total Money Makeover” and saved our little 1k emergency fund, and I’ve been reading personal finance blogs, mainly Get Rich Slowly.
In July, we got to 396,519.24
So 6918.90 in three months and saved an emergency fund. I guess that’s not so bad.
Today I updated our little excel spreadsheet, and it’s 391,582.87.
Since April we’ve paid down 11,855.27. And next month we’ll go below the 390k mark.
The snowball amount has been low, only 71.04 (hey, that 4 cents counts!) and we haven’t been doing great at snowflaking (adding all those little extras into more payments). I’m hoping this is due mainly to the high cost of child care for the summer and needing to adjust my highly optimistic budget from time to time. If we continued at just this rate exactly, we’d pay off all credit cards and both the cars by April 2014. If I then proceeded to pay off the home equity, that would be April 2016, and the student loan would not be far behind in July 2016. And finally the mortgage would follow in February 2020, which would be 18.5 years instead of 30. I’m hoping to speed that up considerably — but I guess we’ll see!
My best recommendation for a debt reduction calculator is from http://www.vertex42.com/Calculators/debt-reduction-calculator.html.
Best budget spreadsheet for us is from Gather Little by Little (http://www.gatherlittlebylittle.com/2008/05/personal-budget-spreadsheet/).