Our Financial Goals: Paying Off Debt (July 2012)

I wish every financial update were as exciting as our May update!  Our Debt Snowball has reached its slowest point yet.  We are down to our two largest debts: our largest student loan and our mortgage.

Currently we owe:

  • $26,142.59 to Sallie Mae (4.5 Interest Rate)
  • $106,659.66 to Wells Fargo Home Mortgage (6.25 Interest Rate)
  • $132,802.25 Total

If you do the math, we’ve paid off $672.02 in the last 2 months. 

For the last two months we have only been making the minimum payments on these two debts, which means they are going nowhere fast.  It’s hard to believe how large the monthly payments are, and yet how little a dent they make in the debt as a result of the accumulating interest.  We’ve also reached a point where it’s hard to imagine more ways to save money.  After two years of changing our habits, we’re reaching the limits of frugality.  The only alternative that will speed up the snowball process is to generate more income.  We have not reached the limits of our creativity though, so I am sure we will continue to brainstorm new ways to save and make money.

As I was discouraged this past week over how slowly our debt has been shrinking, one thing that encouraged me was to look at a few more numbers that I often forget:

  • $238,000 Amount of debt we had when we married in 2005 (3 student loans, a used truck, and a house).
  • $132,802.25 Amount of debt we currently have.
  • $105,197.75 Amount of debt we have paid off in the last 6.5 years of marriage. 

So although I am a little disappointed at our slowed rate of debt reduction in the last couple months, I am encouraged to see that we have paid off $105,197.75 in 6.5 years of marriage, or about $16,000 per year.  When I get discouraged by the small things, it helps to step back and look at the big picture and see how far we have come.

What are your financial goals, and how are you accomplishing them?

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5 Responses to “Our Financial Goals: Paying Off Debt (July 2012)”

  1. Deb (Knott) Forger says:

    Hey Jess,

    Have you thought about re-financing your mortgage? Your rate (6.25%) seems very high to me. Banks are now offering 4% or less. This could save you a lot on interest payments and help you achieve your financial goals more quickly.

    • Jessica says:

      We’re in actually in the process of doing that right now. I was just on the phone with the loan processor today, and she’s hoping we’ll be closing sometime next week. 🙂

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