We killed it in February. After not doing anything extra in January, I was itching to make some real progress! We paid extra to debt as planned and we put more than half of our tax refund towards debt.
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Our debt snowball payment is up to $1000! This means that we are paying $1000 ON TOP OF our minimum payments. It’s pretty shocking to see that we are able to do that. Where was all of our money going in the past? It makes me angry to think about it!
One reason our snowball payment increased is because I changed my W4 at work to increase my federal withholdings. This means that I have less federal taxes taken out of my paycheck, so my take home pay is higher (about $140 per month). This also means we won’t have a big refund next year, and we’re totally cool with that.
We used to love getting the tax refund, but mainly because we weren’t disciplined to save on our own. We also weren’t very responsible with our refunds in the past. They always went to buying things instead of paying debt! I used to think if I had more money in my check, it would just fly through our fingers. I don’t feel that way anymore. We have a handle on our spending, and the extra money is going straight to our debt!
|Type of Debt||Expected Payoff||Balance|
|Credit Card||2018 – March||$747.38|
|Credit Card (HE Loan)||2018 – September||$7,855.06|
|Credit Card (Student Loan)||2019 – February||$9,800.00|
|Credit Card (Student Loan)||2019 – September||$10,658.73|
|Student Loan||2020 – September||$31,112.20|
|Auto Loan||2020 – October||$16,193.04|
|Student Loan||2021 – September||$35,237.31|
|Mortgage||2022 – November||$46,657.88|
|TOTAL DEBT INCLUDING MORTGAGE||$158,261.60|
|TOTAL DEBT WITHOUT MORTGAGE||$111,603.72|
Our biggest hit this month was to unsecured debt. We are focusing on paying off the last of our true credit card debt right now. We are SO close to having this final card paid off. I was hoping to get it done this month, but we used the rest of our tax refund for other savings goals. We aren’t spending a dime!
We will technically still have 3 credit cards with balances after next month. However, those cards are 0% balance transfers from loans that we used solely to save interest. It might not seem like a big distinction, but it is to us. Those cards are being used to our advantage. Our prior credit card debt was from overspending and poor decisions. We are done with that!
Our average interest rate went up a tad from 3.8 to 3.9%. Of course as we eliminate our 0% debt, our overall average will go up. None of our actual interest rates changed this month, and 3.9% is still pretty good. Just 7 months ago, our average was at 4.9%!
Method: Modified snowball method using Undebt.it
We moved our progress from 25.6% up to 27.5%. We lowered our debt balance by $4,157.08 this month! I am so happy to see that big number this month, especially after doing practically nothing last month.
It’s hard to see that we still have over 4 years to go, but that’s why I like to focus on our progress. It would be easy to get discouraged by our total debt balance, but it’s really motivating to see our monthly changes. We have paid off over $26,000 in just 9 months!
We paid $516.51 in interest for February. We’re down a couple bucks since January. I don’t know if we can really reduce this much further, but I’d sure like to. There’s so much we could do with $500!
More Wasted Money??
We spent $171.01 on dining out in February, which is way over our budgeted $100. I’m not exactly sure what happened other than stress eating or needing a reason to get out of the house. We didn’t go into debt for it, but we obviously had to take the money from some other categories here and there! I am just frustrated because I thought February would be better than January, and it wasn’t.
We cashed out credit card cash back earnings in the amount of $109.93 in February. So maybe there’s where the extra dining out money came from? Sigh. Regardless, it’s pretty exciting that we are getting paid for shopping we were doing anyway.
We also just earned a $200 statement credit on our American Express card for spending $1,000 during the first three months. It was all groceries and all paid off within the same month. We were buying the groceries anyway. We made $200 just by using that card and paying it off rather than using our debit card. It’s so worth the tiny extra step!
What are your plans for your tax refund? Share in the comments!