Tuesday, January 3, 2012

Results of my debt reduction efforts for 2011

In October I decided it was time to make some serious changes to my habits so that I could pay off my debt.  I set out a plan to look critically at every aspect of my expenses to find out where I could spend less and to come up with ways to make extra cash.  I cut about $300 out of my regular monthly spending and brought in an extra $200 a month by doing sewing jobs and concentrating on my Etsy site.  That added up to around $1500 to put towards my debt during the last three months just by making changes to my lifestyle!  Plus I had the regularly budgeted amounts that I was paying off each month and, very thankfully, I also got a year-end bonus at work which I put towards debt.  In all I paid off just over $5000 off my debt in the past three months.  While I realize it’s not going to be possible to keep up that pace (inevitably there will be some big expenses that I can’t avoid like new tires and I don’t think my company is going to be handing out bonuses every quarter!), it really feels great that I’ve been able to get off to a solid start!  I only wish I had come to this realization years ago instead of avoiding my finances!

Here’s a breakdown of what I did over the last three months to reduce spending and increase debt reduction: 

Here’s my estimate of what I cut from my spending:
$115 from my non-essential spending (ie. Eating out, buying snacks at work, going out for a drink, etc)
$50 from my pet costs (switch to cheaper food/ flea treatment options, coupons, sales, and reducing the toys/ treats fund)
$15 from my cell phone plan (ended up switching to a different plan with T-mobile which was cheaper)
$50 from the grocery bill (coupons, sales, and strict meal planning)
$100 from the energy costs (being diligent about reducing consumption)
Here’s where I started:

October 2011:
Student Loan: $38,339 @ 2.5%
Car Loan: $11,684 @ 3.9%
Credit Card 1: $10,577 @ 0% until January when my balance transfer reverts to 16.99%
Credit Card 2: $3,635 @ 15.4%
Parents: $600

Total: $64,835

And here’s where I ended 2011:

Dec 31, 2011:
Student Loan: $37,946
Car Loan: $11,275
Credit Card 1: $10,263
Credit Card 2: $0
Parents: $300

Total: $59,784
Paid off: $5,051

Looking forward to a financially fit 2012!!

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