The Daily Grind
Debt Destroying Plan
- Date funded: 2/24/16
- Debt issued to me: $11,000
- Repayments made in the first 30 days: $1,510.89
- Debt Balance at end of month one: $9,731.37
- Interest payments to date (3/25/16): $242.26
The Daily Grind
Money management & personal finance is about setting goals. A budget isn't a goal. I see a budget as my scorecard for goals. Following the budget demonstrates that I achieved the goals I set for the budget.
Between March 4 and 19 there were no surprises in the budget. That's just how I like things.
Debt Destroying Plan
As I mentioned in the previous budget post Paycheck twenty nine we took on debt to complete the construction of our backyard landscape. The plan is to destroy the debt ASAP.
The loan was issued as a 24 month note. The scheduled monthly payment is $507. Paying big-hairy payments each month will destroy this debt fast.
The goal is to have the debt destroyed before Mrs. MBG and I take our honeymoon to Australia in October. Stay tuned to see the progress toward this goal. I have a cash bonus payment arriving this week. I plan to put that toward the debt!
A lot went into the decision to get a loan. It was really gut wrenching to take out a loan after one year of debt freedom. We had an obligation to our community. We didn't want to compromise the design and materials due to long term consequences of that decision. Ultimately the house is an investment and required capital. The good thing is we cash-flowed the other $20,000 which I am very proud of!
This blog post contains an affiliate link to an amazon product called the Nest Cam
"Debt Free" has been removed from the blog titles
On February 25, 2016 we funded a loan with U.S. Bank. My wife and I now have a loan in the amount of $11,000. Its really difficult to talk about. The hardest thing about it is that it simply exists.
Whats wrong with debt? I have the distinct privilege of being debt free for sixteen months. The biggest problem is that it exists and it demands money every month. Just having debt is enough of a pain in the bacon to hate debt.
Stayed on budget pretty well. Splurged for $100 to get an annual subscription to Nest Aware. For Christmas I received a Nest Cam Security Camera. I've been waiting for the budget to allow me to subscribe to the 10-day video history backup. Now I am able to review everything that happened at my front door for the last 10 days. Seemed like a good idea to buy the service.
I saved $60 on groceries because my wife continues to be wonderful to me. I had no shortage of coffee, honey or beer. In addition to that, my third and final bacon of the month club subscription was delivered. The Groceries budget was moved to Savings.
Why the $11,000 loan?
Mrs. Money Bacon and I have been homeowners for nearly six months. The community we live in has a HOA. The HOA required a backyard landscape be approved and completed in the first six month after receiving the home. We have been saving like mad but couldn't fund the entire $30,000 yard before the deadline.
The logical thing would have been to scale back the landscaping project in the back yard. After thinking things thru and discussing our options. It became clear that we wanted the yard of our dreams. We may be delusional but we are kind of calling it the cost of home ownership. Pretending it is a baby mortgage.
Plotting the loans termination...
A few things are falling into place that will allow the loan to be paid in full quickly. My work union reached a five year contract with my employer, Southwestern Airways. Higher wages for the next five years is great. They started on March 1. The other thing is a one time lump sum ratification bonus in the amount of $7,400 before taxes.
The best way to pay off a loan is with big hairy monthly payments. I selected a loan with a 24 month term. Worst case should be that it is paid off in two years. Best case is that it is paid off before our honeymoon in October 2016. October is eight months away. Payments will need to average $1,375 each month. The bonus arrives in April. Australia is still ahead!
Preparing fot the first loan payment
In the paycheck at the front of the month I have budget my portion of the mortgage payment. The idea is that when the loan payment becomes due at the end of the month I can use the bulk of that paycheck to make a big dent in the loan. Like a champion boxing match I am going to hit it really hard, really fast.
Great news, the landscaping will be done later this week. We cash flowed the up-front costs. The landscapers have been working all week. Once its done we write the check for the other half. Its pretty emotion for me right now. On the one hand we have an amazing yard coming together. On the other hand the debt is a big bother and is really upsetting.
Comment guide: Have you ever made a financial decision that felt forced? How did you recover? Feel free to share your experience.
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