Friday, December 14, 2012

Debt Reduction Plan

I just spent a half hour trying to remember how to access my flickr account. I seriously want to punch the internet right now!

Anyways... today is Frankly Friday with the lovely Amy. :)

And I'm going to talk about debt. Hooray! Fun topic right there. (Holy sarcasm people!)

So, on Wednesday I wrote about the sad reality of my life. I bought a house three months ago and now for the first time in over four years I have debt again. Because I have debt I am a slave to the lender. The mortgage company insisted that we get more flood insurance coverage. If we didn't get it the mortgage company would get it for us and add it to our escrow.

Because of all that our insurance company (who was super helpful in the matter) is now charging us $400 more a year on our flood insurance.

I'm not so happy about that... especially since I don't think it is ever really going to flood flood around here. It would take rains like there were in Noah's day.

SO. In order to get that $400 extra OFF of our insurance we need to pay off our debt.

The problem with debt is that it is easy to forget about. It's easy to only think of it once a month when you write the check... or never if you have it automatically withdrawn. And when you only think of it once a month it's easy to forget to save your money so you can put extra on those payments and get rid of it faster.

If you know me you know that I always have a ridiculous plan to make sure I don't forget about things that I shouldn't be forgetting about. And I have one of those plans for paying off the debt. This now hangs in my kitchen for all to see...

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Every time we make a payment we will write the new number and watch our debt become less and less.

I don't care if it makes other people uncomfortable. I talk about my debt. It's a reality of probably 98% of people and no one wants to talk about it. I think we should face it head on. Admit our situations and hold each other accountable to making wise decisions. If you come to my house you will see that number going down more and more... and hopefully it will motivate you to kill your debt as well.

Let me show you something else...

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That friends, is $1,903. All my hobby money. Don't bother breaking in to get it... it's no longer here. It's all at the bank... ready to be put on my next loan payment.

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$1903... that's only $97 away from when I was going to allow myself to start looking for a new camera. Ugh! I was there! That $97 is coming in on new hat orders. Next week I would have been saying Merry Christmas to myself as I searched for my new camera. (And I've been wanting a new camera for probably close to three years now.) So close! But instead of looking for a camera with that money I'll be paying down my debt.

And I'll be dropping that number on the paper hanging in my kitchen by $2000.

I'm not gonna lie people... it sucks. Sacrifice sucks sometimes. Debt always sucks.

I was talking to my mom and told her that I wasn't buying my camera or taking my trip south. My mom is wonderful and just reminded me to remember to enjoy life some too. (Hi mom!) Truth is... it's really hard for me to enjoy life when I have debt. And I'm going to have to find ways to enjoy life without spending money for a while. It's possible... people used to do it all the time!

And the mentality that we need to treat ourselves once in a while is a dangerous way to think. If you have loads of debt or can't make all your bills you do NOT have money to treat yourself whenever you feel like it. When I have loads of debt (and I consider $50,000 to be loads of debt) I don't take vacations, I don't get camera upgrades, I eat out way less, I don't buy tons of new clothes. When I have loads of debt I need to stick to my budget and spend as little as possible so that I can put as much as possible toward my debt.

I have a 15 year mortgage but it is not going to take me anywhere near that long to pay it off. I refuse to take that long. My thinking is five years. Tops. That's my goal. And when I get set on doing something like this I often get called crazy and have people tell me how it probably won't work out. To that I say...


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