Okay, so I sat down and drew up a budget for the next 4 months, with goals for January 1st. I've gone through Mint and figured out what we spend where, and how much we can realistically expect to be able to put towards the debt and savings between now and then.

Now: $75K in debt, $4500 in savings (rewards checking really, but it's our only bank account)
Goal for January 1st: $59K in debt, $10K in savings

I'd like to increase the savings account by 1K at the start of each month, so that it's at least 6K on Sep. 1st, at least 7K on Oct. 1st, etc. It's a little tricky since this is the same account that all our bills come in and out of, but previously we were able to keep it above 6K consistently, so I think I can figure it out. We earn 3% interest on this account, so we're not interested in opening a second account, even if that would make things a little clearer to understand.

I'll send less to the loans in September than I did last month, to help get the savings account back up. I got a little overzealous in August and sent $6k instead of $4k, forgetting what it would do to our bank account by the end of the month.

I'm a little nervous, because we have a big cross-country wedding to attend in a few weeks that will probably set us back almost a thousand dollars, then Thanksgiving cross-country again.... but at least we don't have big Christmas obligations (yay small Jewish family!). So there'll be some challenges, but we'll see.

Wow, that's more than $20K of planned savings and debt reduction in four months. Just slightly green with envy over here. If I could do that, I'd wipe out my mortgage in less than two years!!!!

Good for you!

.................

-$47K as of today. It'll be a while before it changes again.

Wow, just found out we're missing out on a free $6K/year in employer 401k matching. There's still time to max out before the end of the year, but does it make sense for us to spend the $8K to do it? Or I wonder if we could get this year's $6K by rolling over the $10K we have in old IRA's. Hmm hmm hmm....

I'm not sure about rolling over your previous IRAs into an employer matched 401k, but at my company, you can deduct the 6% up to a certain amount of your paycheck. So, you can deduct the 6%, but if it's more than say 20% of your paycheck, you can't do it. I guess they want you to pay your bills and eat before spending all your money on retirement. Make sure you can put in the 6000 from another IRA and have the company match it before you move that IRA money. You don't want to get taxed.

-$44K Net Worth today

It's a little hard to nail the number down, but I think -44 is about right. I'm a little bummed because so much travel stuff has come up, I haven't been able to send a big check to a loan that I desperately want to kill off asap, but we've spent 2K just on airfare this month. :\ That should be all of our travel for the rest of the year, though, I don't anticipate flying anywhere again until next spring.

I'm basically on track with the 4-month plan, though, the bank account should end the month at about 7K, an improvement over last month, and the debt is dropping.

-$39K Net Worth Today

Hopefully the big travel expenses for the year are done. Got a few business expenses coming up (getting a website professionally redesigned, might allow us to double or triple the income on it), and I'm toying with the idea of starting a real brick-and-mortar business next year that would require actual equipment (about $10K) and rent (maybe $700/mo), plus we want to start looking for a house next year. So the sooner we kick this debt and get in the black, the better!

No change in net worth, but I just wanted to say that I finally tried shopping at the Grocery Outlet yesterday, like an earlier guest blogger recommended. It was good, not like a dollar store or something, just a normal low-end supermarket, and I found some great stuff there. Muir Glen pasta sauce, Amy's pizza, Cedarlane burritos, Kashi rice packs, Annie's mac and cheese, Kettle chips, Cheerios.... all for about 40% less than I'm used to paying for them. If we ate meat or high fructose corn syrup, we could probably do all of our food shopping there. Very cool.

I'm making an effort to have more food staples around the house, so I'm ready to cook whatever we feel like instead of going out to eat. Something we should have been doing all along, really.

-$35K Net Worth Today

And once Toyota gets around to finally processing our warranty cancellation, that'll knock another $2k or so off our debt. It'll probably take them another month, I'm guessing. Never should have agreed to that warranty!

In other news, we've been shopping around for mortgages... though the good news is that we've dropped our earlier plans to look in the 500-600k range in our current neighborhood, and we're now looking seriously in the 300-400k range in another part of town. If we do end up getting a house now, we're going to immediately start doubling the payment, which would pay off the house in 10 years and less than a third of the interest. That would leave us with about 5k a month for non-housing bills, spending, and more loan payoffs/savings, which would be pretty comfortable. January is also when we're going to start seriously putting away for retirement, which we've been neglecting.

We'll see!

-29K Net Worth Today

My goal back in August was to have 59K in debt, 10K in savings by January 1st. We've got the debt down to 65K, but we've put the (accelerated) debt payments on hold while we put together a down payment on a house. We've currently got 15K in savings, and I'd like to get it a little north of 20K before we start sending large amounts to the debts again. The car loan is down to 7K, the private school loan is at 6K, and the rest are consolidated federal student loans that we're not in a big rush to pay off. I hope to have the car and the private loan paid off by May at the latest.

I'm not sure what our net worth is at the moment, Mint.com is no longer working with my bank account. Oh well.

We're in the process of buying a house, and we plan to accelerate the payments as much as possible. That will be delayed at first while we finish off the car note and the worst student loan, plus the costs of moving and buying living room furniture (whee!), but I think within a few months we'll be able to double the principal payment, which should cut the 30 year mortgage in half.

What's really exciting is that the house comes with a full apartment in the basement, very nice, and the current tenant might want to stay! So that would really help us get this stuff paid off, plus it'd be great to have someone occupying the space down there so we don't have to worry about the plumbing and stuff. She'd even be able to keep an eye on things when we go on vacation and such. We were never intending to become landlords, but this just seems like an ideal situation. Very cool.

2 months later.... we bought the house! We're very happy. We're also landlords now, and the "rent fairy" has visited us twice so far. I definitely like being on the other side of that arrangement.

We stretched to make the down payment and closing costs, so we're getting back on track now. The emergency fund is replenished, we've finally gotten serious about retirement, and we just sent a big chunk of money to the car and high-interest student loan debts. Both the car and Sallie Mae will be paid off by April 15th, just in time to send another big chunk to the government (not complaining). Once that's done, we'll just have the mortgage (~400K) and the low-interest student loans (45K). My plan is to accelerate both, paying almost double on the mortgage to try to have it done in 10 years, and double on the student loans to have them done in 5. I think we can manage to do this and still put a decent amount of money aside in a 529 and a general-purpose index fund, in addition to the retirement fund.

Both of us grew up lower-middle-class, without much financial security, so my main goal in reducing our debt load is to give us more breathing room if my husband loses his job or we have emergency medical expenses that the insurance company refuses to cover. We have a variety of income streams now, and I don't doubt our ability to find ways to bring in money as needed, but when you're staring down thousands of dollars a month in debt payments, that's a heck of a lot scarier. I'm not ignoring savings, I know how important it is to have reserves in an emergency, but I'm not nearly as concerned about our ability to pay our non-debt expenses if something comes up.

Congratulations on the house and becoming a landlord.
Sounds like things are going well for you and I like your plan of attack for the mortgage and the student loans. My mortgage is a 15 year, so I don't worry about prepaying it as I have other goals I'd like to reach first, but for a 30 year loan, I would try to prepay as much as I could. I have a feeling when it's time for the 15 years to be up, then I'll be ready to prepay!

Keep up the good work.

Thanks Peachy! We were tempted by the 15 year mortgage, but figured we needed the wiggle room the 30 year would give us in an emergency. Paying more in interest, but oh well.

-22K Net Worth today, not counting the house/mortgage. This is becoming kind of a meaningless figure, though, since it takes the value of our Toyota into account, and who knows how much that thing's worth now that the brand has taken such a hit.

I wanted to have the car and high-interest student loans paid off by now. The car is paid off, and there's about 3K left on the high-interest student loans. We'll finish those next month, and then we'll be down to the 40K in low-interest student loans (we'll probably double our payments on those, we're paying the minimum right now), and the 370K in mortgage debt (which we're already paying nearly double on). We're going to sit down soon and figure out how we want to invest the money that we have been putting towards the higher interest debt from here on out.

Not a day goes by that I don't feel grateful and amazed by how lucky we've been.