Debt Reduction – Jan 2009

by Credit Card Debt Consolidator via Flickr

In January, we started a debt snowball type repayment plan and YNAB budget to help focus our efforts on eliminating our debt. I have been very excited and anxious to tally up our total at the end of our first month. We stuck close to our budget and made some reductions to our monthly expenses. We had decided to try to devote at least $3,000 per month to debt repayment. As planned, we paid the minimum required payments on all but one of our accounts, and budgeted the remaining amount of $1,621 to this “focus” account. In addition, we agreed to take any unused funds left in our budget at the end of each month and make an additional payment to “focus”.

At the end of January, our unused funds totaled $513, for a grand total of $2,134 paid towards our Focus. We were fortunate this month to receive some unexpected supplemental income / refunds that will not be typical, but I am happy to see we are making progress and off to a great start. Our debt not counting mortgages totaled $82,314 at the end of December 2008. As of February 1st, our total is $78,764.

Although I know this journey will free our lives, this process continues to be very stressful and emotional for me. Barely a week goes by that I don’t break down and “lose it” over something related to debt, clutter, or who-knows-what. Steve continues to be patient with me. The calm frustration shows on his face when he is trying to figure out what to say or do to help me cope with whatever is plaguing me at the moment of my breakdown. A common theme is my overwhelming desire to document every detail of our progress as some sort personal validation that we are succeeding. Psychologically, I need the mini achievements along the way to help stay motivated.