This post is my 203rd post at Sound Money Matters! I passed the 200 mark while I was out of town, so I’m celebrating now, instead.

June wasn’t a great month for debt reduction, but we got back on track in July and are now 60% towards our $35,000 goal. We also received word that our second windfall will arrive within weeks, which will make August a banner month for debt repayment.

Debt Reduction Progress in July
We paid off the last of the medical loan this month with a payment of $762, and also paid an extra $1500 towards the first of three student loans we plan to pay off by next March. In addition, we accidentally paid an extra $325 to our primary credit card. That worked out well, actually, because our late July bill was huge. The overpayment brought it closer to our budgeted payment.

We also contacted the student loan company that we thought was applying our excess payments towards future interest and learned that they can’t do that. It seems that the interest portion was so large, that we were only paying a tiny portion of additional principal with our excess payments. The bills they were sending us were for less than the actual accrued interest.

Debt Goals for August
As soon as we receive our windfall, we’ll pay off one student loan in full and make a sizable payment toward the second one. August will also see another large credit card bill, which we’ll have to pay in full (although it may not be as large as we’d anticipated.)

Debt Plan Update
Once again, my husband plotted out our debt payments for the rest of the year. We’ll easily eliminate two of his student loans by the end of the year. We should also be able to save for the taxes. When my windfalls start arriving, that will go towards the emergency fund, taxes, and his third student loan. It’s possible that we could have made a nice dent in that by the end of the year, too.

Progress on Other Goals
After receiving a raise, I considered boosting my retirement contributions. Unfortunately, my employer doesn’t provide a match. Since I’m not losing any matching funds by contributing less, I opted to maintain them at 3% and put as much money as possible towards the debt. Given the lagging performance of the stock market right now, I’m not really losing any stock gains with this strategy. Come January, I expect we’ll contribute more to our retirement plans.

We’re still undecided about house hunting. Certainly, we’ll wait until we complete this year’s debt plan, and probably until we complete that third student loan. Once all our debts are gone, we’ll have reduced our monthly debt payments from approximately $2500 to roughly $1100. Not bad for 15 months work!

I’ve given up on losing those last three pounds. They’ve set up a nice little house around my hips and my attempts to foreclose on them have not gone well.

How’s your debt progress coming?

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