An Article from Aaron's Article ArchiveProgress Update
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Wednesday, 31 March 2010 8:21 AM MDT
Nineteen months ago I gave a progress update on my get-out-of-debt status. Slowly (a bit more slowly than I should), I'm still inching toward that goal. Whereas that year-and-a-half ago, my non-mortgage-debt-to-mortgage-debt ratio was 55% (roughly), it has now inched own to only 35.7% (and remember, I'm on a 15-year fully-amortized mortgage, so what I owe on the house has decreased too over the intervening period by about six percentage points).
I paid off the 14% credit card I mentioned. Unfortunately I replaced it with a short-term zero-percent loan that I'll have paid off in full by September.
And yes, I did pay off my RAV4 completely only a few months after my last update. It's wonderful not having a car payment! (Though that only makes me guiltier for not having done better, considering the cash-flow improvement that made.)
What I really need to do is start a future-car savings payment instead, so next time I buy a car, I can pay cash up front (no loan). And I'm never going to buy new again. The first year depreciation is terrible on new vehicles. Ug!
I say my progress has been slower than it should because a few times over this year-and-a-half, I've slipped back into old bad habits, having spent money upgrading my PC, television, and replacing my living room sofa and love seat set. The furniture is responsible for my short-term zero-percent loan I mentioned above.
My remaining outstanding debt is at amazingly low interest rates. I have to be grateful for that. All of my debt (house included) is under 5%, all rates fixed (so long as I maintain on-time payments) for the life of the loans. That's hard to beat (much to the consternation of the loan salespeople who call me offering credit consolidation loans, none of whom can come close to even matching the rates I pay). That is really helping me pay down principal..
As for saving and investing, recent surgery (Sept. 2009) ate up my savings even with great insurance paying the bulk of the bills. My SIMPLE IRA (that's my employer-sponsored retirement plan) has finally recovered from the stock market plunge of the past few years. Still, I'm behind where I should be in retirement savings. As for non-IRA investing, I still own several Vanguard index funds (two are non-IRA, one is in a Roth IRA) and recently resumed monthly automatic contributions to those which I'd suspended for about a year.
This progress update is really to help motivate me to dig in, renew my zest and zeal, and work harder at getting debt free. And yes, I'd like to call in on the Dave Ramsey radio show and shout "I'm debt free!" when I reach my goal.
I hereby commit publicly to update my progress monthly. That will help me stay on track.