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Slowly and Less Slowly, We Get Out of Debt

One thing I haven’t written about yet this month is how our getting-out-of-debt process has been going. During Where’s My Money Going Month, I recorded our spending daily (or every other day) in You Need a Budget.

I’ve kept using the system, though now I export transactions from our banks and import them–adding cash transactions where relevant. I’ve also cut back to doing it about once a week.

Our current getting out of debt strategy is to put Micah’s stipend, any debt snowflakes we have left over from our budget items, and the money I earn consulting & blogging toward student loans. We reserve some for investing, taxes, and some for other goals, but the majority is going toward the student loans.

I’m pleased to announce that this month we managed to put away over $1750! That feels like a real coup, since Micah’s debt is so big. And sure, that’s less than 2%, but that’s a lot more than 1% dangit!

I think we can chalk March up in the win category.

And as a note, I’ve continued to find YNAB very easy to use. I like that I can’t set it to auto-import and just ignore things, but that I can use an import file and then approve/modify transactions. It’s also doing a good job, on the whole, of learning how to make category suggestions. Or if you’re looking for a free budgeting tool, consider downloading my [download#8#nohits].

{ 14 comments… read them below or add one }

MrsMicah's Mom April 13, 2009 at 8:45 am

I think it’s astoundingly good that you were able to put $1750 toward the college debt in just one month. Yay! Keep it up!

Alice April 13, 2009 at 9:40 am

Congratulations! You’re on the right track, for sure.

Fred @ Very Personal Finance April 13, 2009 at 11:51 am

That is great Micah. I am trying to build up to paying off $2000 a month.

Fred @ Very Personal Finance’s last blog post: Twitter Weekly Updates for 2009-04-12

Servant April 13, 2009 at 12:24 pm

A very good report. I find the 2009 customizable budget to be very useful for my own purposes. Thanks for making this available.

Servant’s last blog post: Seize the Day

Ken April 13, 2009 at 12:41 pm

$1750 a month is something to shout about! Hats off to you…keep plugging.

Ken’s last blog post: Personal Wealth Redefined

Aryn April 13, 2009 at 1:01 pm

Congrats! We’re in the same boat and it really does feel great to even make small dent. The best for us was when we managed to eliminate two of the smaller loans that couldn’t be consolidated. They only cost us $200 a month, but not having them at all is such a relief!

Keith April 13, 2009 at 2:01 pm

Congratulations! $1750 in one month is great! It is awesome how you have created a plan and are following through and making it work!

Keith’s last blog post: Do You Believe?

FupDuckTV April 13, 2009 at 2:59 pm

Wow, that kind of debt just seems ridiculous to me. I can’t imagine having that much debt. Why would any lender in their right mind give you two a loan? They really should consider bringing back Debtors’ prisons.

$1750 is a great month for savings. I’m guessing do that for 7 to 10 more years and you’ll be out of debt.

Miss M April 13, 2009 at 3:39 pm

That’s awesome, I hope you have many good months to come. Student loan debt is like a mortgage, it feels like it takes forever to pay off. I certainly hope you continue to find extra money to tackle those loans with. I’ve been bad and fell off the spending tracking wagon.

Miss M’s last blog post: 7 Last Minute Tax Tips

Mrs. Money April 13, 2009 at 5:56 pm

$1750 in a month is fantastic!! I am impressed.

Mrs. Money’s last blog post: Sunday Link Love!

mrsmicah April 13, 2009 at 8:01 pm

@Mom Thanks! I remember you’d periodically update us about mortgage and other debt when we were kids. It was always nice to get happy updates! 🙂

@Alice thank you.

@Fred very nice. $2000/month is a lot, but it’ll also help you burn right through the debt.

@Servant I’m glad you found it helpful.

@Aryn I agree, fewer debts make life so much easier.

@Keith thanks.

@FupDuck it’s student loans for a PhD, not consumer debt. May not make a big difference in terms of debt to pay off, but it’s looked at differently by loan companies and it also doesn’t have the same lifestyle implications. We’re not taking out any more loans, of course, or carrying credit card balances.

@Miss M I agree, it feels a lot like a mortgage. We know we won’t be able to change our lifestyle (grad student) or probably have a mortgage until most of it is paid off.

@Mrs. Money thanks! 🙂

Diane April 14, 2009 at 12:34 am

Way to go on the student loan debt reduction! Keep up the great work and you’ll be done with those loans sooner than you think.

I love it that your Mom is reading your blog & cheering you on… I’ve got 2 sons, 1 in college & 1 in high school, and that’s what I’d be doing.

Funny, but when I read this post I was thinking that I’d be proud of my kids doing so well in paying off debt and then the 1st comment was from your Mom.

liz April 14, 2009 at 10:40 am

What a victory! You have (and continue) inspired me to tackle out debt head on. Last week we took out a loan at 6.75% to pay off a credit card at 30%. It is going to save us thousands in the 40 months scheduled to pay off the new loan. We are also using every cent of our tax return to pay off the rest of that same credit card. I can’t wait to cut up that card in our own victory celebration.
Thanks Mrs. Micah.

liz’s last blog post: A month as whirlwind

Squawkfox April 16, 2009 at 10:43 pm

Having a plan is a surefire way to kill student debt. I did it myself when I had 17K in student loans. Some payments were small and some were big like yours. The point is to have an attack plan (like you do) and implement it to retire the debt. YAY Mrs.Micah!

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