Debt – Past, Present & Future

Oh this four letter word. A curse name in some households and a powerful tool to utilize in others. As for me, I wish I had none. But, unfortunately, like so many Americans, debt is a part of life and there’s no use crying over spilled milk. There is use though in cleaning it up. So, here’s what I did.

2015 GOAL MET

I’ve been in debt for many years, including most of my 20s. Yet, something happened last year. I made a New Year’s resolution to get out of debt. Thank goodness, I made it happen. What was different was that I had an accountability partner that helped me through the year. I helped him as well with his New Year’s Resolutions.

Specifically, my goal was to get out of consumer debt. I paid of my credit card debt, my personal loan, and my motorcycle. The total amount, if I remember correctly was about $20,000.

I still have debt though. My student loans are around $40,000. I also just bought a house and have a mortgage of about $200,000. So, I’m still in debt of an amount totaling approximately $240,000 – it’s a very big number.  That being said, it was a pretty good feeling having a goal, sticking to it through the thick and thin, and achieving that goal.

Oh, for anyone who is wondering what strategy I used, I got advice from several different sources including Dave Ramsey. Although I don’t religiously follow Dave Ramsey’s baby steps, I do believe that he is a good reference if you want to figure out how to get rid of credit card and other consumer debt.  Consistent with Dave Ramsey’s baby steps approach, I organized my debt from smallest to largest. It also worked out that my smallest debts at the time I started the process were also the ones with the highest interest rate. So I got the best of both worlds.

What REALLY helped me was being able to visualize my debt and the end payoff date. It’s funny, but I think that was a HUGE part in helping me get on a plan and sticking to it. It’s the same with creating this blog. I tried starting a blog several times before, but because I never found the right tool (that suited me), I never got started. I used a spreadsheet online that I found that allowed me to reorganize my debt from smallest to largest, by the highest interest rate, or even customize how I wanted to pay off the debt. The spreadsheet also showed me what making additional payments would do to getting out of debt faster. I also was able to see a month by month graph of what my debt balance was and how close I came to zero.

2016 STRUGGLE

With my consumer debt behind me, I haven’t started tackling my bigger non-consumer debt amounts. With the start of a new year, I had a break in the momentum. Or, more accurately, I wanted to take a break after achieving my goal. It’s just that I never got back into the grove of paying down on those bigger amounts.

In addition, Getting rid of those debts is a good goal.  However, I’m not sure how quickly I should try to achieve that goal. Take my house for example. I have a low interest on my house. Supposedly, I can make more by investing in the stock market, and then I’ll come out ahead. However, I’m not sure if I’m really going to keep the house for 30 years. So, I’m not sure it makes sense to try to pay off my mortgage early only to have to then sell my house a couple of years from now.

As for the student loans, the Government is helping me with paying a portion of my student loans. However, the assistance from the Government ends after this year. I’m just waiting to see what the final student loan balance is going to be (after getting all the Government assistance I will be getting) before I decide on focusing on paying down my student loans. Soon, I’ll know that final number.  I will create a plan to eliminate my student loan debt. I should be out of student loan debt (assuming I decide to make paying off student loans a priority) within two years (hopefully) – three years tops.

However, I do admit that I’ve WASTED so much money in 2016. I’ve wasted money by going casino gambling or going to the bingo hall. I’ve eaten out a lot and could save a lot of money by learning how to cook. I generally waste a lot of money. So, I created this blog to give me something to do in my spare time, as opposed to going out and wasting money. I figure it is time to put my spare time and money to good use.