3 debts down!

The big moment finally arrived! We paid off our first debt. Actually, our first three debts!

We paid off a high-interest Home Depot credit card that burdened us for about three years, as well as a $2,000 credit card, and the remainder of our student loans (about $2,000).

We’ve been on a budget lockdown since December, not buying a single thing we don’t absolutely need, and debt snowballing the Home Depot card. We were able to hack the Home Depot card debt more than in half by throwing every extra dollar at it. Then, we used our tax refund to smote the rest, in addition to the other credit card and student loans.

Next up, our last personal credit card. It now has about a $10,000 balance, and has been hanging over us for years. We’d like to pay it off within the year. As per the debt snowball, all previous debt payments (which are now wiped out), will be rolled into the payment for this card, plus every dollar we can spare. This card has a minimum monthly payment of $290. We’re trying to double, if not triple that payment each month. (Just starting to research the potential for a budget transfer.)

So onward with the new budget, minus three debts! Yay!

Wiping out these debts made me take an even closer look at the new budget. I’m reevaluating everything, checking for areas where we can free up dollars to go toward that last credit card.

For example, with the new budget, we’re supposed to start sinking some money into a fund for home repairs/improvements. Would it be wiser to forgo that for now, and chuck that cash toward debt?

Some sinking funds need to stay in place (i.e. funds for propane, property taxes, car insurance etc.), but some funds are purely elective. For example, there’s the fund for Christmas and other gifts. Could/should this one at least be scaled back considerably until we’re out from under the cloud of bad debt?

Then there’s the blatant “fun money” fund that started this month. Are we being irresponsible by even having this fund while we have debt? Mr. Money Mustache says so. He would hate that we have fun money right now. But, there’s the psychological component of something like fun money. So far, the budget lockdown hasn’t been hard. Actually, it’s been kind of fun and challenging. But knowing we have a little spending cash certainly has its appeal.

Perhaps there’s a middle ground. We’ve been without a fun money category since December. A couple of times, when we’ve had a surplus of grocery money, we’ve put that toward something fun. Should we just make that work for now?

I know we’re beyond fortunate that this is something to ponder. Sinking funds and spare grocery money are luxuries. This entire experience has made me even more grateful for what I have.

Here’s a picture of our first wave of green on the farm to celebrate our green money milestone.

P.S. I’ve noticed that this blog has been followed by a few loan shark-looking profiles. I’m not sure if they lay in wait, using my blog to prey on me, or other people in my situation who stumble across this blog. Anyways, if you are a predatory lender, you’re the end-all-be-all worst, ranking even lower than a litterbug.


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