Debt Update – A New Goal for Debt Payoff

We started this site to share our journey out of debt with the world, and to pass along our successes and failures along the way. This journey began with almost $22,000 worth of debt, and we have already made some great progress! Since today is the last day of March, it seems like a good time to go ahead and give an update on how we have been doing.

With yesterday’s paycheck and the corresponding bill-pays to go along with it, our debt is down under $14,000 for the first time! We were hoping to hit this threshold a bit earlier, but the timing of paychecks vs. bills due has been tricky the last few weeks.

Now the journey continues into April, when my raise from work will finally kick in. I got a decent raise this year (thanks to being proactive with my boss), which should definitely help in our debt reduction efforts. We also have a few unavoidable expenses coming up that will make April an interesting month all around. This makes it even more important that we control expenses, especially our grocery bill.

When we started See Debt Run, we set our original goal to become debt free by the end of the year 2012. After walking this path for 3 months, we realize that we need to scale that goal back just a tiny bit.  As such, we are now shooting for the end of February 2013.

GOALS:
End of March: 14000 **CURRENT**
End of April : 13500
End of May : 11500
End of June: 10500
End of July : 9500
End of August: 8400
End of September : 7300
End of October: 6200
End of November: 5100
End of December : 4100
End of January 2013 : 3000
End of February 2013: 0

Our bottom line is a much, much healthier than when we started this journey. When we started, our cash flow was in the red every single month. We have made a number of lifestyle changes that have helped to reverse that trend and as you can tell from the goals above– we are now cash flow positive and able to hack away at significant portions of the debt at each step along the way.

The goals above make the following assumptions:

1. We will use the majority of our income to pay off debt. Food and clothes purchases will be made as needed, but every attempt will be made to try to keep those costs down.
2. Home Improvement costs will be kept down until we are able to get out of debt. Our house has many needs, but we will “patch” things using cheap DIY until the debt payoff is complete.
3. We will snowball debt payments. As debts are paid off, the amount of money that used to go towards one creditor, will be applied towards the next. Thus allowing for larger payments as the year progresses.
4. We will come up with an extra $200-$250 of income each month via surveys, eBay auctions, craigslist, writing assignments, and whatever else comes along.
5. We will not take an expensive vacation this year. The beach is calling me, and calling me often. Instead we will plan to take a big blow-out vacation next year when we can afford to pay for it up front!
6. We will be able to pay extra in May 2012, as our paychecks and bills will finally fall in a favorable position.
7. We will finalize our debt payoff in February 2013 with our Tax Refund.

We will be hosting our first Carnival tomorrow, The Carnival of Financial Simplicity, so be sure to stop by to read some of the best articles from around the Finance World. In the meantime, See Debt Run was featured in a number of carnivals in the past week:

• Coffee Talk was featured in the Yakezie Carnival
• Habit Creep was featured in the Carnival of Money Pros
• The Art of DIY was featured in the Totally Money Carnival
• Why Have an Emergency Fund? was featured in the Carnival of Financial Simplicity
• I’m a Barbie Girl was featured in the Yakezie Carnival

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