Debt Confessional // Our Progress (or Lack Thereof)

>> Saturday, September 2, 2017

Remember when I told you guys how we’re carrying $34K (not including our house) in debt? Yeah. Not much has changed since I last wrote. We did go full steam paying all extra money we had toward this number for a few months. Then we fell off the wagon. We had to buy a new washer and dryer. Our car needed new tires. You know, stuff happens. So, while I don’t have the exact number . . . we haven’t made a ton of progress in this department.

As you remember, without aggressively paying down the debt (paying only minimums), we’d be paying bills for the next 78 months or -- gasp -- 6.5 years. If we allocated all my freelance income plus the minimums, we had the potential to be debt free in just 15 months. Fifteen glorious months that would we would have already been six months into paying.


Here’s the problem -- that plan was too aggressive for us. My freelance income isn’t always steady. Emergencies come up. And -- yes -- weakness does set in even if you have the best of plans. I think the new debt plan will have to be a mix of pay more when we can, pay less when we’re dealing with other financial stuff. (Like summers! How did I not plan for summers with no paychecks?! Fail.).

I’m interested in those of you who have followed the snowball debt repayment -- did you really deplete all the money in your bank account to pay off your debt? I see this being a good or potentially bad thing. On one hand, with most of the debt, you’re paying interest rates. Some high, some low -- but that’s added money you don’t HAVE to pay if you get your act together. Depleting savings makes sense in this scenario.

At the same time, then things come up like needing new tires or a hot water heater, etc. (ugh, yes -- my birthday present -- and then some -- this year was a hot water heater). If you have nothing in the bank, what do you do?

Ultimately, we need to figure this whole thing out sooner rather than later. We’re wasting money on interest . . . we’re feeling the weight . . . we want OUT. I get so inspired by the stories I read of people who have come out of debt, but many times I feel like they are about credit card debt. For us, the student loans have really limited our available funds for other things. Then car payments (stupid, STUPID cars, right?!) Credit cards weren’t much of an issue.

I suppose I could look into a blended approach between the debt snowball and debt avalanche. There are really so many approaches.

To recap today, here’s what went wrong:

We made too aggressive a plan that didn’t leave room for any error. As a result, instead of sticking even remotely close to it, we got overwhelmed and almost rebelled at the whole idea. Thinking, “this is ridiculous -- we can’t even BEGIN to follow this plan.”

Area for improvement: 

Get over it and keep moving forward. We may try to do HALF of my original plan. Use half my freelance income and go after our car loan first. From there, we’ll get ONE of our debts totally paid off, feel accomplished, and then be able to pitch that money toward the next debt.

I’ll be back soon with some notes on how we’re hoping to cut our budget further in the fall. These will be specific, seasonal tips . . . and I’m excited to share them with you. I’d love to hear what things you’re doing recently to save money. We joined Sam’s Club a couple weeks ago, so I have a lot of good, bad, and ugly to write about that.

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