We reduced our interest paid by $124/month this year!
You know what that means… an extra $124 of our own money goes where we tell it to go rather than being predesignated to one specific debt.
It feels good, and motivates me to keep on keeping on.
December Update – How much our debt cost
One of my least favorite things to think about is the amount of interest I pay toward debt each month. The good news is that it is shrinking with each passing month. Pretty soon all the money we line others pockets with will become our own. What a concept… being able to keep the money that you earn rather than paying it toward interest on debt!
Here is the comparison between the last two months:
| November 2009 Interest Paid | December 2009 Interest Paid |
| Mortgage 1 – $586 | Mortgage 1 – $585 = +1 |
| Mortgage 2 – $294 | Mortgage 2 – $293 = +1 |
| Student Loan 1 – $161 | Student Loan 1 – $155 = +6 |
| Student Loan 2 – $126 | Student Loan 2 – $106 = +20 |
| Lending Club – $70 | Lending Club – $65 = +5 |
| Total Interest Paid – $1,237 | Total Interest Paid – $1,204 = +33 |
A few notes about the details of the numbers…
- We reduced our interest paid by $124/month this year! The faster we pay this debt down the more money we save. By aggressively reducing debt this year we are now $124 wealthier every month… not a bad return on investment!
- Our interest shrunk significantly in one month. This is mostly due to the way the interest on our student loans was calculated over the last 2 months. If you remember back to our November cost of debt statement… our student loan interest was higher due to the way their interest is calculated and the way the dates fell. Interest on student loan debt is calculated daily so the interest amounts will vary each month, but will calculate out to 365 days charged at the end of each year.
- Our Lending Club interest shrunk quite a bit. Actually it did not shrink nearly as much as I wanted it to, but that is because our extra payment for November was only around $280. For December we were able to pay an extra $1,500 so our January interest will be significantly less once again. MAN I cannot wait until this debt is gone!
The “How Much Your Debt Costs” Spreadsheet & Graph
In case you missed it, last month I released the sweet spreadsheet that does all the above calculations for you and also gives you the nifty little graph allowing you to track your progress. I deemed it the How Much Your Debt Costs Spreadsheet… check it out.
The spreadsheet will also give you the interest amounts paid for each month in HUGE BOLD numbers for you to print off and stick on your fridge.
That is amazing how much debt costs. Keep whacking at it.
Yucky, isn’t it? I don’t like even thinking about how much we’ll pay towards the house and the mortgage – and that’s a generally “acceptable” debt. Keep it up Matt!
Matt,
One very noticeable stat is that you paid an extra $1500 in December, the month when many put debt reduction on hold or go further into debt. That one stat is indicative of your determination to get out of debt.
You are going to make it! And all of that interest currently being paid out will become positive cash flow to pay yourself with! Very exciting.
Our determination is built upon the Rock… and we will not stop until the debt is gone and we are free to start building wealth and giving it away! 🙂
You got your focus on the right things. Keep it up.
Way to go Matt. Your dedication and transparency is inspiring! I recall vividly how ticked I got when the realization of my debt became clear. This is one of the few battles in life that gets easier the closer you get to the end.
The real trick will be taking that same passion with you to the other side and using it to build your wealth. I’ve seen too many people just think being debt free was the destination.
I already have my plan in place and am already studying the arts of wise investing. I am also surrounding myself with people who are already winning in this area… so I am confident of success!
Yikes, kinda depressing when you break out the interest portion huh? Someone is getting rich off of you, and that’s got to make one mad.
At least you’re making progress!
Precisely Sam… and that “one” is me! I am so mad at my debt, but am VERY excited to be aggressively reducing it.
My wife and I just figured out that we should be able to pay off our Lending Club loan in February, and if not, for sure in March. Then all we have left are mortgages and student loans.