Monthly Debt Reduction & Savings Statement – July 2009 – Lending Club Edition

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Save Money with Lending Club
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.

Here is our up-to-date Debt Reduction & Savings Statement for July, 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)
  1. Pay off our Lending Club loan by the end of 2009 (which consolidated our credit card and auto loan debt – started as $11,000 in August, 2009)
  2. Pay off the remaining small amount on my wife’s credit card (was sitting at $632 in August, 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 paying double principle on our 2nd mortgage, but not our first.  We will not start doing so with our first mortgage until we pay off our high interest debt.

Our Current Debt Progress

In my last report I spoke of an unplanned expense to the tune of $4,500 that has put a serious blow in our progress toward our year end goal amounts.  However… I am not deterred.  I will continue to faithfully plod forward and have faith that the Lord will provide.  I may reach my goals and I may not… either way, blessed be the name of the Lord!

As you may already know, my wife and I recently joined and borrowed from Lending Club purposing to consolidate our high interest debt under a single payment at a lower rate.  We were quite successful, and will save at least $500+ because of it.

  • Credit Cards – I used part of the loan from Lending Club to eliminate the two credit cards that are in my name.  The total amount I put toward those two cards was $2,976.68.  Toward the last card in my wife’s name I paid $3,000.  Her card still has $632 left that she is going to pay on for the next few months.  So bottom line is… we now have $632 in credit card debt.
  • Auto Loan – The remaining amount of my Lending Club loan went directly toward zeroing out the remainder of my auto loan.  The total payoff amount for that loan was $5,003.74.  This loan is gone.
  • Mortgage – I continued to pay double principle payments on our 2nd mortgage.
  • Lending Club – I borrowed $11,000 through Lending Club and after the loan origination fees actually received $10,917.50.  This amount is to be paid off over 3 years and has no prepayment penalty.  My first payment is not due until early September.  As soon as I am fully recovered from my unexpected $4,500 expense, I plan to pay a minimum of $1,200/month toward this debt, but will increase it according to the increasing amounts I begin earning from DebtFreeAdventure.com

For the the month of July 2009, our high interest consumer debt was reduced by $385.30, from $12,017.54 down to $11,632.24.  Again, the amounts were so low because I had to put my normal debt repayment amounts toward the $4,500 expense.

Our Current Savings Progress

Our savings contributions remain consistent thanks mostly to the awesome Capital One 360 automatic savings plan, and have received a small boost thanks to the fact that we have been able to further reduce our expenses allowing us to contribute $50 more to our EF, and $25 more to both our Auto and Vacation Funds.  In case you’re wondering… I am a firm believer in contributing to my savings EVERY month no matter what.  I am currently following my Balanced 75/25 Method of debt repayment/savings contributions.

  • Emergency Fund - I increased the amount I contribute to our EF from $200/month to $250 thanks to more expense costs we have cut.  This month our EF was boosted from deposits of $250 and interest $1.51 bringing its balance to $1,290.12.
  • Auto Fund & Vacation Fund – both increased by $50.26 putting them both at a total of $225.85.
  • Side Hustle Fund – my side hustles earned my $99.98 this month bringing the total of this fund to $330.  At this point I am still putting all monies earned from my side hustles into this fund as a way to track the income.  I am not putting it toward debt repayment at this time, but may be soon… depending on how much I earn.  I only want to use this money to pay off debt if it is earning over and above the costs to maintain side hustle operations.

The total amount saved for July was $452.01 which brings our total cash savings to $2071.84

Thoughts…

Lord willing – my wife has just a few more months of paying on her credit card and will have that paid off by the end of the year.  I can now focus all efforts on my single Lending Club loan which I still plan to pay off by the end of the year.  I am not abandoning my goals to pay off this amount by years end even though I am way behind (thanks to the $6,000+ in emergency expenses we incurred in the last few months.)

I do not know where the extra money will come from, but will continue to strive through faithful, biblical stewardship toward God and hope that he will bless.

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



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1 Craig @ Money Help For Christians

Matt,
Just wanted to say it looks like you have made great progress. Your moving in the right direction and making positive steps. Can you taste debt free yet? Keep up the great work.

2 Jason @ One Money Design

Matt,
Well done! You have the right attitude. There will be hills to climb and distractions that will try to take you off plan, but stay the course and trust God. If you’re trying to live according to His financial principles, he will bless you immeasurably. Your updates are inspirational.

3 Matt Jabs

@Craig and Jason: Thanks gentlemen. I am a man consumed. I will not rest, I will not tire, I will not stop until I reach that glorious day when I can look up to my Lord – a debt free man – and graciously and humbly thank Him for his incredible and faithful guidance.

PS… YES. I can most certainly taste it!

4 Baker

That has got to be the most secure 9.23% rate of return in the history of man…

What kind of investors get this kind of commitment & passion?

Although, you will be debt free, far before I, I can’t wait to celebrate along side of you!

5 Jessica W

Hey Matt! I’m thinking of doing this too, but have a couple of questions. First, did Lending Club do income verification? I’m self employed and dread the idea of trying to collect all my invoices to proove my income.

Second, did you get a statement like the truth in lending act to determine what your interest rate would be and how much you’d be paying in the life of the loan in interest? If it’s not going to save me money after the origination fee, I’m not sure I want to do it. I’m having a hard time determining how to evaluate the pros and cons.

6 Matt Jabs

Hey Jessica. They did not do income verification. Yes I did get a truth in lending act statement by default. After the $85 loan origination fee, I am still looking to save $500+ over the life of the $11,000 loan.

If you situation is similar to mine, I highly recommend it. I have no complaints yet.

7 Frugal Dad

First, a confession. I’ve always skipped over these updates in the past. Today I sat down and read every word, and I must say I am inspired! Your story reminds me a lot of my own, and I was exactly where you are about a year ago.

I also wondered how I would ever find the additional income to pay down our debt. After looking around for months, I finally looked up!

My blog became a rather unexpected source of a great side hustle income, and thanks to it and a lot disclipline we wil soon be debt free.

I predict the same path for you. You have the right focus, and have a great product here in DFA. Keep at it!

8 Matt Jabs

Thank you very much for the encouragement… and I know what you mean about skipping over these types of articles. It is easy to do – thanks for reading.

9 BG

Matt — excellent job in nuking the debt. Did you get your car Title in the mail yet? It is YOUR car now! Drive it with pride.

10 Matt Jabs

Hey BG… figured I’d let you know – I just received it TODAY! :-)

11 Janie

Just curious as to whether the LC loan gets reported on your credit report. I’m currently working on increasing my score, and apparently need another account on my report. I’d like to get a business loan, but want to make sure it will get listed. Thanks!

12 Matt Jabs

Hey Janie – yeah, it shows up on your credit report. Good luck!

13 Jessica W

Matt–thansk for the follow up! I appreciate the feedback. I will consider doing our credit card payoff with LC instead of dragging these cards out. We’ve got great credit, so should be able to qualify for a low rate. Thanks again! :)

14 Matt Jabs

Yeah, it sounds like you’re in the same exact boat we are – should work out great for you! :-)

Just make sure all the other debt you consolidate is at a lower rate than what you secure through Lending Club. If your credit is anywhere near ours you should get a rate below 10% – I believe our credit score is between 750 & 800.

15 Jessica W

I’m on the fence because my credit card interest rate is already under 10%, and I think they’ll be paid off by the end of the year or early next year. It may not be worth the one-time fee to consolidate, even though it’s a large amount because we’re paying it off so aggressively.

16 Matt Jabs

The thing that pushed me over the edge was when my credit cards raised our rates for no reason other than “a bad economy.” After that happened, Lending Club made sense. You may find this happening to you soon, & if so your decision will be made easy!

17 Alex Fernandes

Great post and perfect saving plans, people should follow this post, so they will get clear idea about how to reduce their debt and how to make saving plans.

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