So I posted a little while ago how we were OFF the debt free wagon for a bit there. I am so proud to report we are BACK ON!
While our Wisconsin Dells trip was non-negotiable, we NEEDED to get out of the state, we are back on budget! In reflecting on this past year, I wanted to share with you some other financial wins we’ve had recently!
We Refinanced Our House!
There is still time, if you need to refinance DO IT NOW! Craig is all into the conspiracy theories with the price of lumber and the price of gas and the economy blah blah blah that interest rates are about to go through the ROOF! Here is the breakdown of our two loans:
1st Loan: First time home owner loan – NO down payment – 4.5% interest FIXED – over 30 years – total payment per month is $791 – ONLY $136 of that ACTUALLY WENT TO PRINCIPAL! We paid $281.34 in INTEREST every month! YIKES!
2nd Loan: 3.2% interest FIXED over 15 years – total payment per month – $750. CAN YOU BELIEVE THAT DIFFERENCE!? We are paying LESS per month AND getting out of debt 15 years sooner. While we planned on paying off our house before I turn 40, even if we stick to the normal payments we will for sure be there!
I just can’t believe the difference and it makes me so excited! A friend of ours, Craig’s elementary school buddy and the drummer of my rock band in high school actually helped us with the refinance! It’s kind of funny, Craig knew him in elementary school, I knew him in high school, and then now we all know each other without actually meeting before hand!
That finalized last week and we are so excited! This was a huge step forward in our financial future even though we feel like we haven’t made much progress debt wise.
I earned a $16,000 loan repayment!
This is so exciting! That will leave me around $9,000 to clean up myself!
This is coordinated through my job based on hours worked. Throughout the next four years, the hospital issues payments based on hours worked and over the next four years I’ll have received $16,000 towards my student loans which is very exciting! This is actually funded by a former patient and his family who were extremely generous – while he was in the hospital he asked each nurse who cared for him how much student loan debt they had left and after hearing their responses he decided to do something about it!
Another huge step forward in our financial future!
We are coming up on our 2 year Dave-a-versary in early April
We took a step back this year to cash flow a bathroom remodel but still ended up putting $20,000+ towards debt by my calculations so far!
It’s so hard to judge what to count as “debt” – do our minimum payments on our car count as debt paid off? Or is it only principal? That makes a HUGE difference in our numbers! Should we count the cash flowed remodel? What about the plumber bill we paid off? or our Home Depot card? It’s just a grey area so I’m always super clear and honest about what contributes to our total. You know me, I’m not trying to hide anything.
If this stimulus check ever comes through, we will be ECSTATIC! That would knock out our two smallest debts and send us to working on my car payment! That would just be AWESOME! Regardless of how you feel about politics, if you offer me $5,600 I’m not going to turn it down.
Leave a comment and let me know what your wins are this week! I’m working on responding to EVERY comment so I can’t wait to chat with you!
Congrats on the refi! I still find rates incredulous. When we bought our first house rates were 19-21%. One can buy nearly 4X the house for the same payment!
As far as what counts as debt reduction, outstanding balance change only. It’s why Ramsey promotes snowballing. Getting rid of a small payment is a mental lift even though you then contribute all of that payment to the next. The upside is all that new payment goes to actual debt reduction so as you know, it adds up quickly!
Happy dance for you and Craig 🙂
Thanks Ell <3 I need to get down to the nitty gritty of actual debt reduction and crunch our REAL numbers!
I failed to congratulate you on the Nursing school debt gift! That is AWESOME!!!!!!!
I did refi my mortgage to a 15 year a while ago and it was as drastic as yours. At age 50, now, I want to be out of all debt by age 60. Changing the mortgage to a 15 year 6 years ago gets me done before 60. Totally worth it if you can swing it.
YOU CAN DO IT! I’m cheering you on!
Since I have grands kids older than you, I’ve been around for a long time. You are doing a great job with your finances. To have no house payment at 40 is fantastic. You need to be completely debt free by 65 to retire and only expenses is phone, electric and gas for car. When you pay the house off put that money in a retirement account. You want to be able to live on your SS with huge savings for emergency happenings. Savings goal should be $500,000. + ideally $1,000,00.+. Who knows if SS will be around by the time you reach 65. Just remember this ” do we really NEED this or is it I WANT this to help with your future plans.
This is awesome news on your refinance job and what a generous patient! Our first house was 15% interest, crazy but true and our last house we did a 15 year mortgage also. Super smart idea.
I’m so afraid interest rates are about to go CRAZY again like it did back in the day – yikes!
congrats! i’m a quilter, and a reader of your mom’s blog, but i hop over here oncet in a while…. here’s some thing else you can do to get out from under your mortgage EVEN SOONER: pay your mortgage (half the amount- $375) every two weeks. that will shorten your loan by YEARS! we had our payment deducted automatically from my husband’s paycheck. you could do the same, and you’ll be pleasantly surprised how quickly you turn your mortgage upside down, paying more in principal than interest every month…
I read your comment and contacted our loan officer with your recommendation! I totally forgot to mention that with the loan schedule! Thanks for the advice!
What is awesome about doing what you are doing NOW is that when you get to LATER, you are able to do so much!!! Your patient’s gift is amazing and when you are debt free and fully-funded, you will be able to do the same thing!! My dad and I, because we are both debt free, were able to buy a house in Texas for one of my daughters and a house in Oklahoma (on 10 acres) for another daughter…for cash, so I only pay insurance and taxes (my girls get to pay those). Since they each have 2 kiddos, it is nice to know that my daughters and grands have a home that isn’t going to have rent increased or sold out from under them. It is insane to think of being able to do this!! Congratulations on getting back on the Ramsey train of debt destruction!!! Spending for your mental/emotional heath is essential…you all needed that time away together!
What a generous gift! WOW! You have changed your family tree for SURE!
Congratulations on making great progress toward important goals. Remember too that you’re setting an example for your boys. They are young now but it’s amazing what kids pickup and how early they can learn to budget .
I have to tell you that I am impressed with how debt savvy you are becoming. My only hint for your mortgage comes from my experience 40 years ago… we bought a small farm, mortgage rates was 22% back then… scary! But, every month, at the end of the month, I would see how much money I had leftover and would go into the bank with a small amount of money and put it directly on the principal. Sometimes it was only $25 and a good month it would be $50… but it all came off the principal, so that as the principal went down, the monthly payments had a higher percentage coming off the principal and a little bit less interest generated. My friends thought I was crazy… but I was determined when I read how much of our payment went to interest versus the principal. And I was really upset.. so decided I would do something about it and pay down the principal as much and as often as I could. Such a good feeling when you make that last payment and your house is yours and no one can take it away from you. You go girl… you make me smile and wish you were my daughter!!!
My mom has told me this too over and over – every little bit counts!!