I have talked a lot about money in the past. I’ve written about credit scores, credit card terms, investing in a Roth IRA, and building a stable financial future for yourself, but I’ve never actually shared how much debt Mike and I really have. You know it’s a lot. I’ve made no secret that we’re drowning in it as 20-somethings and it’s mostly because of my student loans. You also know it’s one of my biggest reasons for joining the Air Force.
Since I will be an Airman First Class in the Air Force starting September 22 and my income will be doubling, I feel that now is the time to lay it all out in front of my readers and begin documenting our debt payoff journey. Now that Mike and I are both going to have higher incomes (he got a better job), we feel like we can finally make a dent in our debt. It’s amazing how helpless you feel when you’re putting around $900 a month towards your debt, but the trek is slow and tedious because you just need more! Bigger payments mean debt is destroyed faster. Even when we can put a $100 extra here or there, it still isn’t an extra $1000! It’s going to be amazing to see how fast we can pay off our debt when we can add nearly an entire single income towards it.
The Big Reveal
Truth time. I’m going to show you how much debt we have. I’m not quite comfortable showing the world how much we spend on everything or how much we make, so this isn’t going to be an income report. I’m not a personal finance blogger and I don’t want to be identified as one, but I do want to use my blog to document our journey. If it helps someone with their own, then that’s awesome!
I will show you how much we’re able to put on our debt every month as time progresses, though I can tell you right now that these numbers are coming from two people who don’t have side hustles. Mike is Army National Guard Reserve, so he does receive a little extra money from that every month, but we aren’t super hustling like so many other amazing people out there. This extra money will come from our everyday ordinary income as pee-ons.
NOTE: You won’t see another update until after I get out of Basic Training, but do stay tuned because that update will be huge. There are going to be huge chunks of money thrown on our debts in December because I will have graduated and be able blog again and show you what we’ve paid during those first 10 weeks of increased income.
Our Debt Total: $67,709
HOLY MOLY. Seeing it on paper and knowing that 19% of it is credit card debt is a bit overwhelming. Of course, I have always known how much debt we’re in, but I had never put it in a little pie chart like that. I love pie charts. They put things into perspective fast. I also didn’t realize that 56% of our debt was brought to the table by me alone. I never realized that my loans amounted to over half of our total debt – and I’m using my degree for piddly beans. Sad day here in the P household.
But let’s not fret! We’ve learned from it and we’re moving on! By this time next year, I believe Mike and I will be credit card debt free and even nearly free of the Sallie Mae Loans. For now, we will use the debt avalanche method unless we lose motivation and need to switch things up.
Target Goals by End of 2015
Pay Off Quiksilver Card
We’re going to use the debt avalanche method first, so our QuikSilver is our first payoff priority. It just entered it’s 12.9% interest rate, so it hasn’t drawn any huge interest charges yet, but it will as the months progress. We want this debt gone by end of November.
Pay $1500 of Family Debt
This debt has no interest, but it’s one of those personal debts you want to make progress on because no one likes to owe their family. The main reason we’re paying this $1500 before tackling the other credit cards is because it will be Christmas time and this large payment will help them out big time.
That will take us down about $6000 dollars by the end of 2015. January will start us out fresh with renewed spirit and fervor. I am so excited to finally be free of these chains, and every little debt picked off is one less payment to worry about!
Any other advice for us as we head into the unknown?
Also linking up with the Final Friday Finance Link-Up.