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 = $100.00. Interest 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.
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.
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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