Saturday, October 1, 2011

Debt Transparency

Conversations with friends, family, and acquaintances about money have been coming up over and over again in the last six months or so. Through these conversations, I have been very transparent with our debt, where we've come from and where we're headed. A big shout-out first to God for his grace, and a secondary shout-out to Dave Ramsey for teaching Biblical principles for handling money.

If you're reading this and you are lost financially, or you feel like you could be doing more, I'm going to direct you to Dave Ramsey, to his book The Total Money Makeover, to his baby steps, to his fantastic class, Financial Peace University, and to his movement, The Great Recovery.

Now, on to where we are. We took FPU in February of 2008 at our church in T-town. Then we moved,had two children, and bought a house in the middle there. And we just kept trucking along, adjusting our monthly cash-flow plan and debt snowball (Baby Step 2) to roll with the punches. Almost a year ago, we paid off my student loans. Earlier this year we paid off our both our credit cards. Aside from the mortgage (which is Dave's Baby Step 6), the only debt we have left is student loan debt--$52k of student loan debt. Feeling disheartened, thinking that we haven't made a very big dent in the overall debt, I decided to go back and get all the records I could from February 2008 to present and find out how far we've come, and I'm equally excited and pained to say that we have paid off more than $53,000 in debt in 44 months (thank you, homeowner's tax credit, for the boost)! We are halfway there!

I went onto the forums on (subscription membership is so worth it for the entirety of Dave's daily 3-hour radio program) looking for motivation while staring at defeating our remaining debt, and someone suggested breaking that debt into small chunks and working it from there, using a debt thermometer to track progress. Excellent idea!

I hereby declare war on our chunks, $10k at a time. So, I'm going to post our progress on each of 5 chunks of $10k in the form of a debt thermometer, updated monthly (or more often if I'm particularly inspired). And yeah, it still might take us 5 years to pay it all off, but I'm hoping it doesn't! And yes, there will be more than 5 chunks of 10 once interest is said and done, but we have to start someplace, right? So, in October of the year 2011, we start with our empty, new chunk:

First 10K Chunk, started 10/1/11
fundraising ideas
Fundraising Thermometer


1 comment:

Craig-Jen said...

I think this is cool!!!!!!!! And while Craig's school debt is locked in at a crazy low rate (Around 1.25%), we've decided any and all extra money goes towards wiping it out completely. We are SOOOO fortunate for Craig to have bonuses at his work which has allowed us to rapidly pay it off. We use that bonus money for things we don't normally buy (i.e. getting rid of those mirrors and installing a TV above the fireplace), but the extra cash every month by not paying on the loans is starting to look really attractive! I want to save it all and either pay down the house or save for the inevitable truck replacement...