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My Current Debt

December 24th, 2007 at 03:40 am

So here's a little rundown of my current debt. Now don't go cringing on me. I do enough of that as it is on my own...lol!

Credit Card:

owe:
$4,900.98 with fixed 7.9% rate

payment: the minimum payment is about $96, but I pay $195 per month towards it plus anything I may have charged depending on the reasons charged and when.

HELOC:

owe:
$44,580.77 with adjustable 7.25% rate (currently at 6.25% apr on last statement...yay!)

payment: the minimum payment varies but is usually under $300 so that is what I pay each month and the difference goes towards principal.

Truck Loan:

owe:
$9,524.39 with fixed 5.99% rate

payment: the payment on this is $232.76 I currently only pay the minimum, but would like to make additional payments as soon as the credit card is paid off.

Mortgage:

owe:
$111,553.01 with fixed 5.75% rate (originally $121,159 in Dec 2003)

payment: $707.06 plus taxes and insurance escrows = current payment of $920.01. This will hopefully be lowering in April due to a decrease in escrows.

Total DEBT: $170,559.15 (with mortgage); $59,006.14 (without mortgage).

Right now we are doing our best to pay what we have down plus regain the money we lost from our emergency fund when my husband was out of work for 5 1/2 weeks this past summer. Thank goodness we had it, but now we have to recoup it in case we need it again. That plus gas prices have decreased the amount of extra money we have available.

I see the credit card going down dramatically soon. I had to charge some textbooks (and some I paid cash for) and DH has been told he'll be getting a bonus in February though I don't know how much yet.

We've already decreased our expenses to the most we can go at this time without being totally cheap and deprived. So now it is just a matter of being patient and plugging away at the debt little by little while trying to not bring it up further.

9 Responses to “My Current Debt”

  1. Frugalicious Says:

    Great work on paying down debt!Keep going it will pay off!!

  2. disneysteve Says:

    One comment. When you pay off the CC, don't go to the car loan next. Go to the HELOC next since it has a higher rate and a variable one at that. You should always pay in order from highest rate to lowest rate. That's what will save you the most money in the long run.

  3. collegemomma Says:

    Thank you both for your comments.

    disneysteve: Even though the HELOC has the higher rate, paying off the truck loan first would save me more money in the long run. Firstly I owe less so it will make me feel better because it can be taken care of more quickly. I will have the large payment amount to add to the huge balance I owe on the HELOC, which will allow me to pay it off quicker than if I was paying it off next. Also, I'll be able to save in other areas such as auto insurance. Yes, in some cases paying the highest interest rates off first would save more money, but not in this case. Also remember that right now interest rates are going down so even though my interest rate is higher my apr is turning out to be not much higher than my truck loan. Sure that can change and if needed I will adjust my plan.

    Thank you again for your suggestion though...I appreciate it!

  4. disneysteve Says:

    You mention lower auto insurance. I assume you mean you would reduce your coverage once the truck was paid off. That may or may not be a good idea, but you're correct that it could make paying off the truck the better deal.

    Another thing to consider is the true rate on the HELOC, which I neglected to think about. That interest is tax-deductible (if you itemize) while the truck loan is not. That means the actual cost of carrying the debt is probably higher for the truck.

    So I take back my first comment. You are right to pay off the truck first.

  5. collegemomma Says:

    disneysteve: I'm glad you made the suggestion anyway. Even though it won't work for me in this situation, it is a good suggestion and one to consider before deciding which loans to pay off first. Sometimes paying the highest interest rate off first is the best solution, but until you look at all options you cannot know which is best. I look forward to hearing more from you in the future. Oh and I love your blog! Smile

  6. Broken Arrow Says:

    Hi, glad to see that you have a clear picture of your debts. Smile I would probably second Steve's recommendation for another reason.

    You said that your emergency fund was gone when your husband was out of work for 5 1/2 weeks. The ideal situation is to have funding available for up to 6 months. Of course, not everyone agrees with me on this either, but you CAN use something like the HELOC as a source of emergency funding. You don't have to use the whole thing either. For example, half of it can be savings, and the other half can be reduced HELOC or credit card. Just whatever you feel is best.

    But yes, I'm also very glad to see that you are concerned with the highest interest first. That, in my opinion, is usually the best way to approach paying off debt. Smile

  7. collegemomma Says:

    Hello Broken Arrow! One thing I was glad about when DH was out of work was that we barely had to touch any credit in order to pay our debts. Our emergency fund was there to serve its purpose of letting us pay our bills in an emergency. So that is one thing I want to get back as soon as possible so if there is another reason to need it I won't have to go further in debt (or not much). In an extreme emergency I would use my HELOC if I had to, but I would prefer to pay it off instead along with all my other debt and pay cash or be able to pay off my credit each month.

    Some people say they are saving $1000 for their emergency fund before paying off debt. Some say 3-6 months. We are comfortable with $5000 so that is what we are going to save in our savings #2. I just started it the end of July with $5. I now have over $600 in it so I feel we are well on our way!

    Thanks for your comment!

  8. disneysteve Says:

    The $1,000 starter EF comes from Dave Ramsey. It is just a starting point as $1,000 isn't nearly enough of an EF to maintain. Heck, I just spent more than that to have my car repaired last week. But for people who have been living paycheck to paycheck, accumulating an EF of $1,000 is a big deal and a great accomplishment.

  9. collegemomma Says:

    Exactly...a $1000 EF won't even cover most people's mortgage payment for one month let alone all the other bills. We had more than $1000, but less than $5000 when DH was out of work and it was just enough for the 5 1/2 weeks. That's how we know we need at least $5000 for us to be comfortable. $1000 sounds like a good start, but not enough to get you through a real emergency.

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