We have done it! Our new debt total is $0, which means we have no debt total! We are free and clear of those financial woes at last!
It's hard to believe we won't be making any more debt payments. Ever. Not. Ever. Again.
Here's to 2015! And here's to a fresh start! A life without debt!!
Only $5223.23 stand between us and financial freedom.
Yes, you read that number correctly. Expect the Debt Beast to die.
Quick financial update of money owed to the idiocy of youth:
Canada Student Loan is at $18,759.71.
BC Student Loan is at $1830.82.
At least we can see the end of one of them.
When I miss a month update, I think you can pretty much guarantee it's because I've avoiding the obvious lack of progress on the budgeting front.
When last we met, the Debt Beast was a whopping $22,200.85.
At this moment our debt sits at $21,272.18.
This would be grand if it weren't for the fact that the total above was from 2014 January...three months ago.
We're way behind on our debt payments. In the past three months we've paid less than $1000, which is our monthly target. In order to make our debt goals, we'd now have to pay...
Actually, we still have to pay about $1100 per month to meet our goal.
The trick is we actually have to pay it.
Gabe likes to tell me we decided to pay only the minimums for a few months in order to build up a reserve in the Canada account. All I see is debt. Debt is not a logical thing. It exists...therefore we have failed.
I'm not really big on the logic. I see this.
So, we're $21,272.18 in debt. We'll see what it's like next month.
I have never been in a place or position where I could receive a year-end financial bonus. Honestly, it's one of those things you think only exists in movies. But this year, I received one. Unexpected and incredibly generous, I came into a sum of money I could not have imagined.
Anytime I have come into unexpected money, I start conducting research. The Internet and numerous financial books are full of useful and often contradictory advice about what one should do with the year-end bonus. I like the idea of the 50/25/15/10 split: 50% goes towards debt, 25% goes towards emergency fund, 15% goes towards savings, and 10% is leftover for experiences that are fun and spendy.
Unfortunately, we are not currently in a position where this is a viable option. Maybe we will have the stability to indulge in such thoughtful spending in the future, but for the immediate moment, we need that bonus to go to work for us.
This means majority of my unexpected bonus is to be put towards temporarily stabilizing our current and upcoming expenditures. This month and next we have a number of sometimes unexpected and costly items that need to be covered. This month alone we have seen unexpected veterinary bills (oh, Homer) and had to replace all of the tires on our car after one died an irreparable death.
We do have a cash cushion and an emergency fund, but we also now have a way to preserve those accounts in case we met an emergency without other financial options.
In a single moment, the bonus--what at first seemed a happy, plump, endless affair--is spent and saved in Responsible Ways.
But I can never be too Responsible. I decided to take part of the bonus and buy myself a ridiculously good and horrifically priced ticket to the upcoming Cavalia show, Odysseo. I also (and how could I not?) bought myself a book (no surprise here). I decided on a photography book I would not be able to buy myself were I not suddenly in possession of gift money.
Both my husband and I found this a satisfying end to the bonus, which was here, gone, and left us in unexpectedly better financial, literary, and cultural places.
Finite money meets infinite goals means a fair bit of creative play with the budget. And compromise. Always comprise.
The closer we get to our goal, which is also to say the longer we've been in debt, the more impatient I become to pay it off, and the more we would like to enjoy our life.
At this moment we owe $22,200.85.
We could pay this off in a year, and when I think of being completely debt-free within 12 months I couldn't be more eager to get it done and commit myself to the plan.
But then I have to agree to live less.
I'm really, really not fond of anything that keeps me from living life in exactly the way I'd like to live it, which involves a ton of travel, lots of activities, and having the flexibility to say yes to new experiences (or books)!
The original plan we set involved a five-year payment plan to get $62,000 of debt paid off by December 2015. We started and ended up annihilating debt faster than we planned, and the date of December 2014 seemed within reach.
This year we had a slower payment schedule, due in part to our dog's end-of-life care (which we worked out to be an average of $1000 a month, every part of that money well spent), other unexpected costs, but also because we decided to start living a little more. We traded the potential of debt-free months in for life, and it has delayed our repayment, but our lives are much richer for it.
If you had told me a few years ago that I'd make this choice, I'd be livid, but now, living this life we're creating, I couldn't be happier.
We could still pay our debt off by 2014 December, but neither one of us thinks it's worth the sacrifices we'd be making: Vegas, Galiano, Chicago, Colorado, sculpting classes, dance lessons, books, electronics... We'd miss out on so much.
And we don't want to miss these opportunities.
We've reset our debt repayment date to 2015 December, which puts it back to our original five-year plan instead of the four-year goal that became our pursuit for a time, and we're both really good with that.
So, here it goes:
Let's start with the mandatory debt update, because when the Beast is smaller than before, I become even happier than I usually am, so...
Last month we owed $27,607.87.
This month our numbers look like the following:
BC Student Loan: $2,863.29
National Student Loan: $20,390.63
States Student Loan: $963.19
Our new grand (that's completely the wrong word...it makes debt sound noble) total is $24,217.11.
This means we paid off $3,390.76 in debt this month, which is phenomenal! Woo hoo!!
We are still on track to be out of debt (OUT OF DEBT!!!) by 2014 December.
I have commenced the Happy Dance.
Now that we're out of refinance stasis, let's have a look at our current numbers:
Last month we owed $28,503.76.
Canada Student Loan $20,616
British Columbia Student Loan $5918.87
States Student Loan $1073
Our grand total this month is $27,607.87
We're closer to being back on track now, and next month will be even better!!
So, what else is new?
We saved up enough money and went to Disneyland!!
Last month we owed $28,813.76
Canada Student Loan $21,133.52
British Columbia Student Loan $6,080.93
States Student Loan $1289.31
Our grand total this month is $28,503.76
Let's talk regular budget for a moment, because we passed some milestones...
Back in April our debt total was $31,200.25. What a devastating number! Here is where we are today, two months later...
In the Great White North my National Student Loan is now sitting at $21,369.15
My BC Student Loan, meanwhile, is now at $6155.30.
In the States the student loan is now $1289.31
Aaaaaaand the credit card....no longer exists. Well, it exists. But the debt on that sucker? GONE!
So, we owe a grand and devastating total of $28,813.76
Squirrel and Nest offers one-on-one and small group financial counseling services that aim to give individuals the knowledge and independence they need to get their financial lives in great shape.