Debt Reduction Progress

Last night, I reviewed our debt situation in detail to see how far we've come in the last couple of years. This morning, I started an email to a couple of friends and family members about how well we've been doing. I also found an MS Excel calculator for debt reduction and wanted to send to a few people. Anyway, I started writing the email and it just kept getting longer. After I finished, I kept adding more friends and family that might benefit from our story. All this to say, I've decided to post the email here for you all to see. If you want a copy of the debt calculator, just let me know and I'll email it to you.

Hello friends and family,

I found a super-handy debt calculator for excel and I’ve attached it to this email. Just enter your debts, the rate and payment. Then, enter your total monthly payment including any extra you can pay towards those debts and it spits out some sweet, though depressing data. I’m no Dave Ramsey disciple, in fact, I think he’s a cocky punk, so don’t worry about me going all militant on you to get of debt. I just found a useful tool that I wanted to share.

Here’s some motivation for you:

Me and Danyel decided to put some effort into getting out of debt about 2 years ago, actually, a little less than two years. We have a huge amount of school loans, so much that I’m embarrassed to say. Anyway, we made a conscious effort to pay down our debts. We created a budget to get an idea where our money was going and we were shocked how much we waste. We made room to pay $500-$1000 a month more than our minimum payments and the results have been huge. I’ll outline some of the facts below:

-We’ve reduced our debts by $25,000 in under two years

-We still buy just about anything we want (bikes, cameras, etc.), but we think about each purchase more and credit cards are NOT an option.

-We still go out to eat (too much, in fact)

-We don’t alienate our friends by playing the “budget card” when we go out together

-We do suggest more cost-effective entertainment options

-Our only debt now is school loans

-Some debt was eliminated by getting rid of car payments

-We have a $8000 Honda that’s paid off

-We’ve saved between $5000-$10,000 dollars in interest charges

-If we stick to our 5-year plan, we’ll save $25,000 more in interest.

For those of you who know me, you know that I’m no budget Nazi, in fact, I’m very much the opposite. I don’t believe in a one-plan-fits-all mentality. I DO believe that we each have to find our own way and create a system to curb our spending and pay some stuff off. If it’s not your system and your approach, then I doubt you’ll be able to stick to it. So, use good resources like this calculator, maybe read Dave Ramsey’s book, whatever you need to do. Then formulate a plan and try for a little while…it’s quite liberating and it’s easier than you think. Realistically, we’ll have those school loans paid off in 5 years, but our goal is 3 years. Neither one of us make a lot of money, but we’re committed to freeing ourselves from huge, useless debt and freeing up that cash to do what we really want to do. Imagine having $2000 extra per month to spend on the house or invest, or vacation or whatever.

I love running the numbers through these calculators and saying, “what if I pay x amount of dollars per month…then when will I have it paid off.” I think you will too, when you realize that paying things off is actually in your reach. I know of very few people who have more debt than us and we’ve been able to achieve a respectable amount of reduction in just two years. I promise, you can do it. I’m willing to sit down with any of you and help you with a plan, even show you ours…I promise, your jaws will drop when you see our debt!

Okay, I’m off my soap box now. I’ll shut up.

-br

PS-If you’re wondering why I sent you this email, I just started adding people from my address book.