Medicated Money

Sunday, March 12, 2006

Paying Down That 'D' Word

The only man who sticks closer to you in adversity than a friend is a creditor. - Unknown

Paying down debt is one of the most humbling experiences one can encounter. It is both exhilarating and depressing at the same time. To know that you are freeing yourself from the mercy of another and realizing that you put yourself there in the first place is definitely a catch-22. Freedom from personal slavery. I heard that the debtor is slave to the lender, and I believe that this is one of the most honest statements ever declared.

We developed a debt repayment plan, and we are beginning to implement the system. Our take home pay after everything is $7,500. We believe that we can spend $3,300 on living expenses, save $700 (for money not marked yet; emergency fund as of right now), and $3,500 for debt repayment. Our repayment plan is a combination of Dave Ramsey thinking, and the 'financial advisor's' thought. Our order of paying off the debt looks like this:

  • #1 - Student Loan #2 @ 7.01: $6,241
  • #2 - Car Loan #1 @4.99%: $9600
  • #3 - Car Loan #2 @3.99%: $7,907
  • #4 - Personal Credit Cards @ 0%: $12,750
  • #5 - Student Loan #1 @ 3.625%: $88,572
Our goal is to pay minimal payments to debts 2-5, and pay $2,125 towards debt #1. Then the goal is to get the 'snowball' rolling. With this plan, we can be debt free by May of 2009. That's just around the corner! Our more realistic goal is to be debt free except for the student loan of 3.625% and to purchase a house within 12-18 months. This could be accomplished by March of 2007. A little more realistic. We will begin monthly post of our progress with this goal.

1 Comments:

  • Bub, I'm proud of you for turning the corner and starting to deep-six your debt. Dave Ramsey's debt-free plan makes a lot of sense, doesn't it? You're doing great; keep it up, baby! www.debtective.com

    By Blogger DEBTective, at 3:53 PM, October 10, 2006  

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