It’s been a few months since I’ve updated my debt report. There have been a lot of things going on in the last few months. Currently, we are in the middle of a worldwide pandemic with COVID 19 and all of the commotions it’s causing worldwide. Luckily, with all of the government mandated shutdowns or self quarantines, I’ve been able to keep a steady income. I know there are a lot of people out there that have lost income during these past few months. Needless to say, it has made me pause to rethink paying off all of my debt to maybe saving a little more as an emergency fund. That said, I still have a hard time just having cash in the bank, and with the recent market decline, for me a the moment it’s viewed as a sale. I like feeling like I’m getting a good deal when I buy stuff so when the stock market goes on sale, I want to buy.
There was another unexpected benefit to the current pandemic as well. I received a notice from my student company that there will be no interest charged on the balance for the next 6 months or so along with an automatic payment deferral. I could still make payments, but I had to question what was the best use of the money. For me, with no interest accruing and no payments required, I decided to take all of the funds that would have gone towards the payment and send that over to my investment account.
In my last report, I mentioned that we also have some larger expenses coming up soon, like repainting the house. Gotta love those HOA neighborhoods, right? Talking with some of the neighbors who have already painted it looks like painting the house might run anywhere from 2 to 5 thousand dollars! Yikes! Good thing we’ve started saving for that too. I wish we could use it for investments or debt though. Some may say painting the house is like an investment as it should increase the value of the home, which for many people is their single largest investment. Sounds good, but I’m not planning on selling it anytime soon so it really just feels like an unnecessary expense to me.
Here’s the update on the debt report for April 2020:
| Category | Starting Debt as of October 16, 2019 | Debt as of 4/30/2020 |
| C |
||
| CREDIT CARDS 4 | 319.93 | 69.49 |
| CREDIT CARDS 2 | 1,700.14 | 0.00 |
| AUTO LOANS | 18,718.26 | 16,609.80 |
| STUDENT LOANS | 30,259.94 | 28,747.97 |
| HOME LOANS 3 | 147,606.51 | 143,648.46 |
| HOME LOANS 4 | 0 | 306,491.99 |
| Total Debt | 513,160.12 | 496,369.67 |
As of the last report published we were at $507,414.02 in debt. Cool! We paid down and extra $11,044.35! It should be noted that some of the debt Too bad that was over a 3 month period and looking at it from that perspective, we could have done much better. However, the money did go somewhere productive helping us to get a small step closer to financial independence. It wasn’t necessarily by getting closer to being debt free, but by increasing the amount of funds in the investment account. Basically, I purchased a little bit more of the perpetual money making machine, like the guys over on ChooseFI call it. So we’ll call it a win for now.
I’ve also started creating a graph to show the history. This is kind of motivating to me, so here’s a copy:
If I were looking at this I would ask, “Wow, what happened in December? The balance increased instead of decreased.” As you may have read on another post, we have a side gig selling stuff on Amazon and in December we spent a lot on increasing our inventory of products we can sell at a later date. This is one of the reasons for the increase. Another was that our refinance went through in December and there were some additional points added to the loan so the balance actually increased from the two loans (a first mortgage and a second mortgage with high interest) to one new mortgage with a better overall rate. We’ll end up saving money with the new one over time and it also increased our monthly cash flow so we could put more into saving for our financial independence. Maybe at some point I’ll start reporting on that. I’m not comfortable showing the goals in terms of total dollars though, so maybe it will be something more like a percentage of completion of the goal. We’ll see. I am tracking it now though.
If you’d like to take a look at my other debt reports you can check them out here: