Monthly Debt Reduction & Savings Statement – December 2009

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Each month I will be posting these Monthly Debt Reduction & Savings Statements. I do this so I can continually compare our debt amounts against Our Starting Debt Amounts from back in January, 2009 – when my wife & I began our Debt Free Adventure – and to summarize our progress toward debt free living.  Like charts/graphs better? Look in the sidebar for those.

Our current goals for 2009

As the sun sets over 2009 and yet another decade of life… we take a final look at our yearly goals and make another call to prayer for a Personal Finance Miracle.

  1. Pay off our Lending Club loan by the end of 2009 (which consolidated our credit card and auto loan debt – started as $11,080 in August, 2009.)
  2. Save $6,000 toward an Emergency Fund by the end of 2009.

All other goals have already been met, or at least consolidated into the LC loan.

Our current debt progress

A little recap in case this is the first MDRSS you have read, back in August we joined and borrowed from Lending Club to consolidate our high interest debt under a single payment at a lower rate.  I only suggest that you do this if the rate you can get from Lending Club is lower than all the rates of the loans you are looking to consolidate.  We were quite successful in that respect, and will save at least $500+ over the life of the loan by consolidating through Lending Club.

  • Lending Club – The loan started at $11,080 (principal + loan origination fee) back in August, was reduced to $8,314.46 in November, and after our December payment we now owe $6,544.29.

For the month of December we reduce our loan principal by $1,770.17 which feels great!

Our current savings progress

When we started saving we set out to amass at least one month’s living expenses before focusing 100% on debt repayment.  Last month we reached that amount and decided to stop contributing… but halting contributions only lasted for one month.  Why?  There is just something about saving nothing that I disagree with.  As you may already know I came up the 75/25 method of debt reduction and emergency fund savings as a personal alternative to Dave Ramsey’s $1,000 EF plan (I’m not knocking Dave’s plan, I’m just doing what works for us… as I’m sure Dave would encourage and as I have discussed at length in other posts.)

Long story short, we started saving $100 into 3 different funds again.  Some will agree with this and some will not… oh well.  :-)

  • Emergency Fund – Our contribution of $100 (+ $2.50 interest) brought our total emergency fund savings to $2,449.
  • New Auto Fund – Unless we run into an emergency our EF cannot cover this savings fund will indeed go toward our next vehicle purchase.  We contributed $100 and brought the total up to $477.  It may not sound like a lot, but it will continue to grow and will serve us well in when we need a new vehicle.  This is another deviation from the Dave Ramsey plan that we see as necessary.
  • Vacation Fund – If all goes well we will be able to use this fund for just that… a much needed vacation.  We continue to fund it and will hopefully be able to use it for its designated purpose.  We contributed $100 bringing the total up to $606.  This is of course our 3rd deviation from the DR FPU plan that we view as necessary for our personal situation.

The thing about the different savings accounts is that they are always there if we ever do need them above and beyond our $2,449 emergency fund account.  Altogether we are saving only $300/month combined and splitting it amongst these 3 different savings accounts.  Doing this makes me feel good about always paying myself at least something, yet allows me to focus a vast majority of my available monthly funds to debt reduction.

Thoughts

I will take this opportunity to refocus attention on the Personal Finance Miracle my wife and I are praying for and ask you again to pray with us.

As the mathematics work we fell $10,095.29 short of our 2009 debt repayment and savings goals and have asked the Lord to provide us with a miracle in an effort to bring attention and glory to His excellent name.  Read more about our Personal Finance Miracle for details and let us know what you think in the comments!

- photo credit to rajeevnair1981 -



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