Monthly Debt Reduction & Savings Statement – February 2009

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Each month I will be posting these Monthly Debt Reduction & Savings Statements.  It is my intent to use these statements as a comparison against Our Starting Debt Amounts where I listed our debt as of January, 2009 – when my wife & I began our Debt Free Adventure – to summarize our progress toward debt free living.

If you desire to track our progress, you can do so directly by following the MDRSS (Monthly Debt Reduction & Savings Statement) tag series here.

Here is our up-to-date Debt Reduction & Savings Statement for February, 2009.

Our Current Goals

  1. Pay off our credit card debt by the end of 2009 (which started as $9,197 in January, 2009)
  2. Pay off our auto loan by the end of 2009 (which started as $6,036 in January, 2009)
  3. Save $6,000 toward an Emergency Fund by the end of 2009
  4. Pay an extra $50 in principle payments on both our student loans so as to pay them off early
  5. Pay double principle payments each month on both our mortgages (we have a 75/25 loan) in an effort to pay them off in only 15 years as opposed to another 28.  **Update – 3/31/2009** We are not going to start doing this until we pay down our credit cart debt.

Our Current Debt Progress

Although we put forth more money than will be shown below, we are still getting charged finance charges on our credit cards and interest on our loans.  Although most of our interest rates are low enough to not bother worrying about, there is one card that is quite high.  I’m currently working to secure a new card that offers 0% interest for 6 months and no fees on balance transfers.  Although it is tough to find a card offering such a deal, they are out there.  The card I applied for is the IberiaBank Visa Gold (I’m not making any money on this link simply giving others the resources I use).

The following amounts were paid over the months of January & February of 2009.  All future such posts will contain the data of only one month’s information.

  • We realized $862.09 reduction toward our credit cards leaving us with $8,334.91 of credit card debt remaining
  • We reduced our auto loan by $208.34 leaving us with $5,827.66 of auto debt
  • We successfully put an extra $100 toward the principle of our student loans thus reducing the time it will take to pay them off (let it be noted that I am using an automatic withdraw to do this each month and am trying to get the wife to jump on this bandwagon, more on that later)
  • We also doubled the principle on our 2nd, higher interest mortgage.  This mortgage is only currently paying $35 toward the principle each month, so we went ahead and put an extra $50 toward it and plan to do so each month this year
  • **Update – 3/31/2009** – We did not pay any additional principle on our 1st mortgage because as stated above, we are using our available funds to focus on reducing our debt.  After the debt is gone, we will resume this goal

Our Current Savings Progress

Over the course of the last 2 months I have been driven to do a lot of studying on when to save, how to save, and where to save.  After much reading & comparison we decided to open a savings account with Capital One 360.  We currently have a two money market savings accounts with GMAC, but they do not offer a few of the features that Capital One 360 uses to make saving easier; so we’re closing our GMAC accounts and moving everything into Capital One 360.  Principally the two main features I’m referencing are automatic monthly savings withdrawls, and the ability to open sub-accounts for saving.  See this review by Frugal Dad (one of my new favorite blogs) to get more good information about Capital One 360 savings accounts and the benefits thereof.

Although I didn’t add my savings account information on my initial Starting Debt Amounts post, I find it a necessary addition to the monthly debt reduction & savings statements.

Since Capital One 360 is only letting me have one savings account and one funding account in my first 30 days with them, I have not yet closed my GMAC accounts.  Also, I’m not going to list all of my savings here, only the specific goals that I feel must be mentioned for biblical debt free living.  One of those musts is the infamous Emergency Fund.  We are funding our EF with an initial investment of $1,000 with a 2 year goal of growing it to $20,000 which will give us a solid 6 month cushion should we both happen to lose our jobs.  Over the course of February, I was able to move an additional $180 into it as well.

Here are the savings goals we plan on funding over the course of 2009.  More goals may come, and these goals are subject to tweaking as time and…life…happen.

  • $1,180 moved into our Emergency Fund with a goal of hitting $6,000 by the end of 2009 and $20,000 by the end of 2010
  • A Vacation Fund with a goal of $1,200 per year receiving $100/month
  • Lastly, we are creating a New Car Fund.  This is not because we need a new car right now, but because when we need one we want to have as much as possible saved toward it.  We don’t have a set amount to save toward this yet, it is lowest priority

Thoughts…

Our goals are ordered according to the Snowball Method of paying off high interest credit card type debt first, then once realized shift our focus toward reducing our lower interest student and mortgage loans.  This is a common strategy in the “debt reduction” circles I’m starting to run in more & more, and it makes perfect sense of course.  Thanks to Pete over at Bible Money Matters (another new favorite blog of mine) for that post.

Now that our plan is in place and underway, I am very excited and driven to see our debt numbers shrink every month while we sit back and watch our savings numbers grow! If you have never undertaken such an endeavor, it is a pleasure that cannot be realized without personal experience, and truly is an awesome feeling!  Thanks be to the LORD for His provision, guidance, wisdom, patience, grace, and mercy…just to name a few!

If you desire to track our progress, you can do so directly by following the MDRSS (Monthly Debt Reduction & Savings Statement) tag series here.



Betterment is one of my two favorite ways to earn interest on my savings! They have an awesome program for the Average Joe to save and invest simply and effectively. There are no minimum balance requirements and no transaction fees. Read my Betterment Review or open an account to get started earning now.

1 Bible Money Matters

Thanks for the link, glad you’ve been reading!

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