I want to start sharing our debt numbers, our progress, and our goals.
I am hoping to write a post about every few months or so updating where we are at.
I have appreciated people in the finance community being transparent with their numbers and I am wanting to do the same.
Our current debt numbers
Bret and I have a total of $277,721.41 in debt (not including our mortgage)
- $260,390.25 in student loans
- $10,676.24 is for a new fence we got for our home – 4% interest rate
- $5,430.76 is from credit card spending – 4% interest rate
- $449 for furniture – 0% interest rate
- $775.16 for peloton bike – 0% interest rate
Plan for repayment
Right now, we are focused on paying down everything but our student loans.
All of our student loans are federal loans, and because there is no interest right now due to the interest freeze, we are hoping to pay off everything else by January 2023.
Then, we plan to tackle our student loans.
Our fence was broken and 14+ years old so we knew we wanted to get a new one at some point.
We learned about a home equity line of credit (HELOC) where you can have access to your home’s equity without selling your home.
We decided to pursue this to help us get our fence this year due to the low-interest rate. We got it at a 4% variable interest rate.
Since we opened the credit line, I have learned more and more about debt and am not sure if I would have made this same decision today, but it’s already done!
We also transferred our credit card debt to the HELOC as the interest rate for the credit card was 20.24%… yikes.
We have not been accumulating more credit card debt as we have significantly reduced our usage of them until we have a solid budgeting plan in place.
I am bummed we are missing out on the points, but it’s just not worth it right now!
Bret is on a break from school and is currently in Alaska for about 5 weeks working with the salmon fisheries, so we are expecting him to come home with a few grand – the exact amount is unknown.
Then, we are renting a room in our home which we started last month so that income will be so helpful!
And lastly, I have started doing dog sitting through Rover again and might do a little Instacart to supplement.
We are working to cut our daily expenses so we can save each more a month as well.
I am still investing a little while we pay off our debt with $50/month to my Roth individual retirement account (IRA) and getting my employer match by contributing 6% per paycheck.
I am really excited about our new money knowledge and it feels empowering to have a plan and a goal to pay down our debt.
We have talked about using the avalanche method for paying down our student loans, but don’t have a solid plan in place for those just yet.
Until next time!