Debt Reduction and Savings Statement – March 2010

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Our goal progress for March 2010

Each month I post these Monthly Debt Reduction & Savings Statements so I can continually compare our current debt against our starting debt from back in January, 2009 – when my wife & I began our Debt Free Adventure – and summarize our progress toward debt free living.

Check out our debt reduction charts in the right sidebar.  I like graphs.

Based on our financial goals for 2010, what follows below is the progress we made during March of 2010.

1.  Lending Club debt goal

PAID OFF!  As previously mentioned, earlier this month we paid off our Lending Club loan.  It was a consolidation of credit card and auto loan debt, totaling $11,080 that we were able to pay off in just 7 short months.  Woo hoo!

If you’re interested in borrowing through Lending Club, read my advice on debt consolidation and check out my Lending Club review to help you decide if a similar path would benefit your debt situation.

March debt reduction progress = $1,933.47.

2.  2nd mortgage debt goal

After paying off our Lending Club loan we are now left with an average excess of around $1,500 each month.  We debated whether to use the excess to repay our 2nd mortgage or my student loan debt first, but after much deliberation decided to save most of the money.

Although we will be saving around 67% of the money as a hedge against job loss, we will also be putting $500/month toward extra principal reduction of both our 2nd mortgage and my student loan.

Essentially we are changing this goal, and beginning next month (April 2010) we will put $400 toward extra principal payments on our 2nd mortgage and $100 toward extra principal payments on my student loan.  Her student loan and our first mortgage will continue to receive regular monthly payments only.

March debt reduction progress = $72.23.

If you find the content on Debt Free Adventure helpful and would like to contribute to our debt reduction, check out the SmartyPig savings account widget in the bottom of my right sidebar.  Any help is greatly appreciated.

3.  Emergency fund savings goal

While repaying Lending Club we were contributing $100/month to our Emergency Fund via our Capital One 360 automatic savings plan but will bump this amount up to $850 come April. This is not the preferred Dave Ramsey $1,000 plan, but is the best decision for our current situation (threat of job loss.)

March savings progress = $100.00Interest earned on this account for March 2010 = $2.56.

4.  Side income growth goal

For the 2nd month in a row, DFA earned us enough to cover the cost of our 1st and 2nd mortgage payments.  Woo hoo!

I am also still working on ways to diversify my income.  The more sources I have, the more monetary security we have.

Other savings

Our other savings accounts include:

  • Vacation Fund = $100 added – interest earned for March 2010 = $0.84
  • Next Auto Fund = $100 added – interest earned for March 2010 =$0.79

Oh yeah… if you did the math you probably noticed that of our extra $1,500 each month we only accounted for $1,250 so far.  The remaining $250 will go into our Next Auto Fund.  Why?  Because both our vehicles are at least 9 years old and we want to have a good amount of cash saved if one were to die.  The next vehicle we buy will be purchased using whatever cash amount we have saved in this fund, which is currently just above $1,000 and growing at only $100/month.  Bumping that amount up to $350/month will greatly improve our chances of being able to afford a reliable replacement when the time comes.

Thoughts

Don’t agree with all the money we are saving as a hedge against job loss?  Think we should be putting it all toward our 2nd mortgage instead?  Well… don’t forget that my wife’s position will likely be eliminated next year due to state budget cuts.  Beyond that, my company has recently changed its business model and while we are hopeful, there is no guarantee the changes will generate enough revenue to keep the company afloat.  In light of all the uncertainty, we are focused on building our savings.

In the event that our jobs remain stable over the next year or so, we will then have enormous amounts of money that can then be used to make lump sum debt payments accordingly.

Oh yeah… our vacation fund has also grown to $1,000 and will be used toward a much needed spring break vacation next week.  We are incredibly excited about the trip and are so happy to be paying cash for the entire thing.  Like I always say… pay off your debt, but don’t forget to stop and smell the roses along the way!  ;)



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1 Mrs. Money

Go Matt! I am sooo excited to see your Lending Club paid in full. I can’t imagine how you feel!

2 Matt Jabs

Thank you very much. I feel “free-er.” :)

3 Elle

Congrats on paying off your Lending Club loan! I think aggressively saving in anticipation of a job loss is a smart move. You’re still paying down your mortgage while increasing your cushion.

4 Matt Jabs

Yeah, that’s the way we see it – I think even staunch DR followers would agree that this is the correct decision when job loss looms.

5 Jolyn@Budgets are the New Black

So exciting! What a great milestone to reach! Congratulations on your well-earned accomplishment!
We, too, reached a wonderful milestone by paying off our consumer debt last month (almost $20,000!). We, too, have a second mortgage that will come next on the snowball. However, in light of an impending move Summer of 2011 (we’re military), we will be bulking up some savings first. I’m getting ready to write a post with all the yummy details.
Congrats again!

6 Matt Jabs

That is so awesome to hear Jolyn… sounds like we are on VERY similar paths (I also just stumbled across your cash envelopes post.) :)

Congrats to you too… it feels so great to reduce debt and build savings!

7 Evan

Congrats Matt! I love reading about success stories and yours is one of the most detailed one around. Sucks for all those people that funded your lending club note though! They barely made any money off of you LOL

8 Matt Jabs

Ha ha, I know… I thought the same thing, and I wish I could them that I’m sorry… but I’m not. :)

9 Budgeting in the Fun Stuff

Congrats on paying off Lending Club! Even more congrats on making enough off DFA to pay for two mortgage loans!!! Dang!!!

Anyway, your plan seems solid to me…pending job loss means you need a bigger emergency fund. It might be cliche, but YOU GO BOY!

10 Matt Jabs

Ha ha ha aha ha! Thanks.

11 Anthony

I can agree that you are doing the best thing for your personally situation, which is the greatest thing that anyone can do. There are lots of opinions out there, but do what’s right for yourself!

Congrats! I’m in the middle of saving and reducing debt, and I’m splitting all of my excess funds, just like you are!

12 Matt Jabs

Yeah, doing what is right for your individual situation rather than blindly following some plan is something I preach often. :)

13 Adam

Awesome job Matt!

We just paid off a personal loan yesterday. Look for our update on Thursday!

14 MyFinancialObjectives

Congrats Matt! That must be such an awesome feeling! In a few short months I hope to have my similar post going up. I think I’ll probably re-post it about 5 times considering what a monumental day it will be. It might even out-do my Birthday :)

15 Matt Jabs

Ha ha, nothing wrong with that – It sure does feel great… lemme tell ya!

16 Derek Clark

Congrats on knocking out that last loan. My wife and I plan to pay off her student loan in May to become debt free. I can’t wait!

17 Matt Jabs

Awesome Derek! Debt free meaning debt free, or debt free meaning ‘only mortgage left’?

18 Derek Clark

Sorry, unfortunately meaning only mortgage left. hope to knock that out in a few years though.

19 Matt Jabs

Well… you also have an asset securing that debt, and assuming you could sell it (if necessary) for at least as much as you owe… then you’re not doing too bad! :)

20 Amy

Congrats on paying off the loan Matt. That’s such a good feeling. Being a Lansing native myself I can’t help but admire the green and white motif. Was that coincidental or are you as excited about the final four as the rest of us here?

21 Matt Jabs

Ummmm… thanks Amy, but I am actually a UofM fan living in the heart of Spartan country *sigh*. Nonetheless, I am very happy to see them in the Final Four and am rooting for them (I’m not one of those fans who roots against my teams rival just because.) :)

22 Amy

Nice. Yah my husband is a UofM fan even though he also grew up in Lansing. He’ll root for state though if they’re playing another team.

23 Ken

Congratulations on paying off debt quickly. Also good to see you planning for the future (job loss). This is wisdom on your part.

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