debt paydown update, 1/31/2011

This is a followup post on the subject of my family’s efforts to pay down our debt, which I blogged in detail here. As I said there, I have taken to looking at a snapshot of all our debt accounts at the end of January, so I can have a year-over-year comparison and see how much progress we’ve made in a consistent period. Before I get to the numbers, an exciting thing (which I already mentioned on Twitter) that happened this week is that we paid off one of our cars. Mandy is teaching a couple extra classes every day, this block, and the first paycheck with the extra income came in this weekend, and it was enough extra to pay off her car today. Within a month or two, between her extra income and our expected tax refunds (we haven’t got any of our W-2’s or 1099’s yet, so I don’t know precisely what they will be), we expect to be able to both buy ourselves a few nice things (like a kindle) and pay off another of our credit cards completely. Depending on a variety of other factors (including income at the Phoenix Comicon), we may possibly pay off a third or fourth account before the end of the year. We’re making excellent progress. To see how excellent, here are some numbers:

Last year at this time, we owed $43,571 in consumer debt (including auto loans) and $40,750 in student loans for a total of $84,321 in debt. When I posted in October, I estimated we’d be at $30,683 in consumer debt and $39,954 in student loans for a total of $70,637 in debt – we did better than that! We actually have $29,439 in consumer debt and $39,840 in student loans for a total of $69,279 in debt! We reduced our total debt by $15,041 in one year! That’s almost $1,400 more than we expected to be able to pay off!

If you noticed that the student loan debt went down by almost nothing, that’s partially because we’re only making the normal payments and it’s apparently set to be paid off in about never. But it’s only at 5.375% interest and the student loan interest (up to $2500/year) gives us a big tax deduction (in addition to the standard deduction), which is most of why we’re getting a refund from Federal this year (I finally got the withholding set about right, this year). We basically won’t be making headway on the student loans until after all the other debt is paid down. That’s alright. All the other debt is at higher interest rates.

That’s all for today, I think. Look! A short blog post!

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