Seems that once I reached my goal of being debt free, well, the excitement my finances brought kinda waned.
Hey, I’ve never wavered from the fact that I’m a lot more skilled at paying down debt than growing savings…
Anyway, as you may have already guessed, I’m carrying a considerable amount of debt again so it’s time to put my head down and eliminate it…again.
Let’s get down to business.
Briefly, a rundown of my current debt situation is this:
- $3k in credit card debt at 12.9%
- $11k in an auto loan debt at 2.9%
- $154k across two mortgages both below 5.5%
And here’s the plan…
Though the credit card has the lowest balance (which would take almost no time to eliminate) and the highest rate (which means it’s costing me the most to carry), it’s not my primary target.
Reason being, its minimum monthly payment is tiny so it has almost zero effect on my budget.
Yeah, it sucks paying finance charges each month but I can totally handle an extra $26 or so tacked on to my balance each month.
Sure beats the old days when I was dropping over $400/month in finance charges across multiple cards…
The mortgages are what they are.
Did you remember that my primary mortgage payment comes in at under $500 per month? Yep — my housing payment is amazingly low for a four bedroom house.
It’s not built yet…but most of the money to get it done is already in place.
So, as I’ve repeatedly stated in the past, there is ZERO benefit for me in paying down the primary mortgage at an advanced pace and the second mortgage balance doesn’t cause me sleepless nights either though that’s likely due to the fact that I still have the entire balance sitting in a savings account (so it really doesn’t feel like debt…yet).
So that leaves the auto loan…
Remaining balance on the loan is $11099 and the monthly payment is $444.15. Interest rate is 2.9% which, unfortunately, is the highest interest rate I’ve ever had on an auto loan.
This loan originated back in April of 2013 when we bought the Swagger Wagon to replace my beloved (in a nostalgic sort of way) Land Rover Discovery. Original balance was $24k.
Having never lost my love for paying down debt quickly, I’m so far ahead on this loan that I don’t actually have to make another payment on it until April 2016. Yeah, an entire year.
That said, it’s minimum payment (not that I need to pay it or anything) is pretty chunky in my opinion.
Sorry — paying almost $450 per month for a $12k balance just rubs me the wrong way…so I want it GONE.
Ready for this? My plan is to have it PAID OFF in four months.
The method of attack is tried and true for me — every last dollar goes to paying this off.
EVERY. LAST. DOLLAR.
Extra payments to the mortgage(s) are halted. Credit card payments are just covering my current purchase expenses plus the minimum payment — essentially keeping the current balance relatively level.
And that’s okay because once the auto loan is paid in full, the credit cards are next and within striking distance of a full payoff the following month leaving just the mortgages.
Let’s do this.