Tuesday, July 5, 2011

Halfway Through the Year, How's the Debt?

I know I didn't go over a total amount of debt at the beginning of the year, but I have all the numbers saved on my computer.  At the beginning of the year, we had $75,769.96 in debt, including our house, our 2008 Uplander, student loans, and  credit card debt.  Now that the year is half over, we've actually added a little bit to our debt, and now stand at $77,942.00. The reason for that is that we built up our savings account a little bit to give us an emergency fund, and then we bought a second car (2005 Impala) since we're going to be needing it when Elliott starts school in the fall, since I plan on driving him every day.  We had planned on saving for a second car, and buying one that we could pay cash for, but we ultimately decided that since winter is COLD here, and I will be driving 17 miles each way twice a day, and my husband drives 20 miles each way to work, we should get one a little more reliable.  So we just put $2000 down on the Impala and financed the rest. 

We also had our big Disney trip in March, and while we didn't put any of it on credit (yay!), we didn't put much extra toward our debt for the first three months of the year because of it either.  We had planned the vacation (and started putting down money) when my husband was first deployed, so scrapping it wasn't an option we really considered.  We figured March was our last chance to go during a less crowded time, since Elliott starts school in the fall, and our vacations have to take place in the summer from here on out.

Looking at the numbers on our debt sheet, I feel like we failed during the first half of the year.  We added $2172.04 to our total debt, instead of dropping it.  But we added $2000 to our emergency fund, managed to come up with around $2500 (we didn't save much more than what we put down for reservations last year) for a Florida vacation, and added a car worth around $10K (a little more than that retail, a little less private party).  We did receive a tax refund from both federal and state that amounted to around $5000, that we used to pad our emergency fund, put down a down payment on the car, and put toward "fun money" at Disney World and Busch Gardens (souvenirs, eating out, etc).  So basically, we added $2172 to our debt, but came out ahead by spending $10,000 on a car, and adding $2000 to our savings account.  We also added to our retirement fund, and Elliott's saving account, but since we've always done those things, I'm not counting them as anything special.  So according to my calculations, we actually made headway of about $8000 (we added $8K in debt, plus a $2K down payment that would have went toward other debt,  for the car, but only have $2K more debt than we did to start with) during the first half of the year.  If you add the $2000 more that we now have in savings, we came out with making headway of $10000.

So the stats are not great.  We only made headway of about $1300 a month.  We pay about that every month for our house, student loans, and two cars combined (we bought the second car in March).  Obviously interest is a huge killer (especially on the house, hello 85% interest and escrow payments!), but I still feel like we should have done a little bit better, especially considering we had a large tax return this year.  With a $3000 vacation, and $2000 extra in savings I guess it's not awful, but not great either.

The amount of money we spend on gas is about to go through the roof.  Right now I drive about 150 miles, or a little less,  a MONTH, since Elliott and I walk around town whenever we can, and only go to base or into Minot when we need to go shopping.  When he starts school, I'll be doing 340 every single week, just to get him to and from school.  So I'll be multiplying my mileage by more than 10x each month!  So we're going to be adding about $300 extra to the budget for gas when school starts.  So I'm guessing my totals will be worse during the second half of the year, but at least it will be going in the right direction.  We're going to shoot for knocking the debt to below $70K, but will happy enough with $72K or less, since I know that the first number would be very difficult, with the extra on gas.  Wish us luck! :)

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