FYI - I'm updating the title of my initial post as we pay down our debt, so the pay down number in the title does not match the pay down number in this post.
I am excited about this opportunity to post about my fiscal fitness goal.
Late last year (2006) I started researching new cars. Background - I drive a paid off 1999 car and my husband drives a paid off 1997 truck. We live in southern Florida (I swear its the new car capital of the world, where else does one see new Lotus, Bentley, Rolls Royce cars mixed in with the more ordinary BMW, Mercedes Benz, Lexus, Hummers, etc.) and we are both professionals and both of us receive ribbing from our co-workers about our cars. Late last year, one of my peers upgraded from a leased VW to a leased Audi and left me as the remaining old car hold out. As I researched new cars, I also researched how to avoid a new car payment and I came across Dave Ramsey's web site and read Total Money Makeover. After finishing TMM, my husband and I (we were married in Oct. of 2006) totaled up how much unsecured debt we had accumulated (wedding costs, grad school, credit card debt, etc.) and decided that before we accumulated any further debt (i.e. the new car) we needed to pay off our unsecured debt, figure out where our money was going, create a budget, etc.
So, our number 1 goal for 2007 was to pay off our unsecured debt. We started the year with 8 debts (6 credit cards, 1 student loan and 1 other loan) and a grand total of $55,537 in unsecured debt. Step 1 of goal 1 was to identify and total up our debt (see above). Step 2 was to fund an emergency fund (see Dave Ramsey) which was easy to do since we already had a couple thousand sitting in general savings. Step 3 of goal number 1 was to cease adding any new debt to our existing debt. We cut up all our credit cards and we have not added any new debt. As of today, April 29th, we have paid off $20,878 in debt and 5 of our 8 debts. We followed the Dave Ramsey snow ball method and started with our smallest debts and paid off 5 of the 6 credit cards. As of today, we have the other loan, 1 credit card and our biggest debt $26,423 in grad school loans remaining to be paid.
Goal number 2 - We deviated from the Dave Ramsey method as we both continue to fully fund our 401ks ($15,500 each in 2007). We both felt strongly that we needed to continue to fund our retirement because we are both 35 and did not want to forgo a year of savings.
Goal number 3 - is to fully fund our emergency fund which will be larger than most because we own 4 investment properties and I would like to have at least 3 months of mortgage payments, tax and insurance escrow payments in savings for all 4 properties.
Last edited by Sam on Tue Jan 15, 2008 4:34 am, edited 33 times in total.