Monday, April 22, 2013

Month 6: Debt Repayment Update

Month 6 between March and April was a really good month for debt repayment in this household! Toward the end of March we got our tax return which put us down to $56,000.   Since then, we're down another $1,494 (!) which brings us to:

$54,506

6 months in, we're down about 10K ( approx. 15% of our total debt has been wiped out). Double digits feels nice! This month DH started getting some overtime and my raise kicked in. We also did some very small and inexpensive renovation projects like caulking, screen replacement, and spruced up the outside of our house a wee bit. 

This month we passed a significant milestone which was having a positive net worth. This gives us a huge sense of relief and added financial security and means if we sold all of our assets we wouldn't actually owe anything - we'd have cash in our pocket. So... if we both lost our jobs tomorrow, we could feasibly get minimum wage jobs and rental accommodations and be just fine! We also realized in looking at the adjustments that we've made to our budget that we could maintain our current standard of living (with all the frills of 2 cars, 2 cellphones, cable tv, internet, etc.) on just DH's salary. The costs we incur currently beyond DH's paycheque are things like childcare expenses and additional fuel costs which would be eliminated if I wasn't working. This also makes us feel more comfortable with our financial situation. 

In analyzing all of this, I've come to realize that we could actually commit more money/month toward debt repayment... about $2000/month without much sacrificing on our part. Actually... since the start of this journey, we haven't really given up much at all. With both of the boys birthdays coming up, I am anticipating not as good of a month 7 in terms of debt repayment but you never know. 

3 comments:

Martina - GetReal Momma said...

Kristy you are doing amazing!!! I admire your determination to get it all paid off so quickly!!

Sarah said...

Last time I we went to the bank (our net worth is positive) our accounts manager was telling us how few clients have a positive net worth, let alone a positive net worth over $50,000. I was shocked at that. I'm so glad you have a positive net worth now- it makes the worst case scenario a little easier to swallow, I think.

Kristy said...

Thanks Martina!

Sarah - that's terrifying. Especially for people who own homes. Having a positive net worth is super exciting because now every cent we put toward paying off debt actually counts as building assets - and once we're done we'll be one of those few who have more than $50K - provided life doesn't happen in the mean time!