We just finished the second quarter of 2017, and I am happy to say that we’ve made some good progress on our debt goals. We definitely made some mistakes, but compared to our first quarter debt pay-off, we have decreased our total debt by about $4000.
Unfortunately, I do think we could have made that total about $6000, but as I said, we made some mistakes and spent some money we probably shouldn’t have.
Here are some of the things that happened from April through June.
As of today, we have $65,202 in debt.
This number should have been closer to $63,000, but I am happy with any progress, and this definitely shows progress. I plan to pay an additional $2000 towards the Discover card this month, so that will drop us down into that $63k range.
A Look at the Numbers
1. Goodbye Sallie Mae.
Sallie Mae is done and gone. Back in May, I was able to KO Sallie Mae, thanks to us taking on a roommate for two months. I am never looking back at that lender ever again. You may be wondering why I paid off that last Sallie Mae loan when my original goal was to start paying off the cars. I decided to pay off the Sallie Mae loan because its interest rate was higher than some of the other debts, and I read a book that fired me up on the debt snowball plan again. It was our smallest loan and it took just one good month to pay it off.
2. The Total Money Makeover by Dave Ramsey
Believe it or not, I had never read this book until April 2017. It blew my mind when I listened to it on audiobook. Dave read the book and his charisma seeped out of every chapter. After listening to him talk about the snowball method, it renewed my motivation to pay off some of our smaller debts. I decided it was time to rid myself of Sallie Mae once and for all, and I did. This has freed up $75/month to apply to our other debts.
However, even though I am a proponent of the debt snowball method, I am not following it systematically. Rather than paying off the AES loan, I am moving up to the Discover card, as it is currently at 0% interest, but will be switching to 6% interest rate at the end of July. My goal is to pay it off by the end of August.
3. A new credit line with USAA
You don’t have to tell me that I already have plenty of credit and credit cards. Trust me, I know. But when USAA offered me a smashing offer of 0% until December 2018 with a $0 transfer fee, I felt it would be foolish to pass up. So, I moved over the truck/credit card debt on the Quicksilver card to this new USAA card. After the Discover card is paid off, I will move to this debt. I will only need to pay $1000/month to beat the end of the promotional period, so my hope is to pay it off by May 2018. Seeing those numbers and dates get me so excited.
4. A change in retirement savings
I stopped contributions to my TSP after listening to Dave Ramsey. I think he made some good points in saying that it doesn’t make sense to contribute to retirement if you’re drowning in debt. He also notes that debt pay-off can be so fast, you may only miss out on a couple of years of contributions. I am happy I have some money in my TSP that will keep building while I’ve stopped contributions, but I feel it is worth stopping those contributions while I finish up some big debt pay-off.
Stopping these contributions freed up an extra $300/month to throw at debt, and once I pay off the credit cards, I will restart the contributions. This is a short-term change, and I look forward to switching back soon.
I believe that is all for the second quarter finances. I believe the third quarter is going to show some big returns on finances, and I cannot wait to see where we’re at in September! How have the last three months gone for you?