Budget: Debt Reduction Update

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You may remember that we hit a bit of a roadblock. We moved, couldn’t sell our house, and paying an almost $600/month mortgage on top of other expenses has prevented us from paying extra on debt. However, because of a miscalculation on the principal vs. interest on my second loan…we’re still pretty much on track with our original plan.


We have also now rented our house (YAY!). So that extra $575 (which covers the  payment) will now be divided up in this way: $400 toward debt reduction and $175 divided between a tithe and savings. We may work some of that into our budget categories if special needs arise.


Our Debts:

Student Loan #1, $8,000  $2,982
Student Loan #2, $11,000 $8,900
Mortgage, $59,000 $57,800
Total Debt:  (approximately) $78,000 $68,782

Student Loan #1: $8,000 (Current balance $2,972)
Feb 2013:  This is PAID OFF, as of Feb 9, 2013!!!  Yay :)

Student Loan #2, $11,000 (Current balance $8,900)

March 2013:  Pay $1,800 from tax return. New Balance: 9,200 (Because the balance on the first loan was more than anticipated, we won’t be paying a lump sum toward this second one right now. However, we’re still ahead of schedule, since the current balance is just under $9,000.)

March 2013-Feb 2014:  Pay $192 (reg. payment) + $400 (from the rent we’ll be receiving). Since we’ve already gotten used to living without it, we’re going to be adding it to the debt cause. My calculations assume that $92 from the regular payment will be applied toward interest, meaning that $500 per month would be applied toward the principle.  Projected Balance: $4,520 $2,900
Feb 2014: $2,900 from tax return (Pay Off Student Loan #2!!!)


We are hoping to have sold our house by this time (our renters have expressed an interest in possibly buying it), but if not, the plan will continue until we get that debt paid off as well. Can’t wait!!!



    • Crystal says

      Nicole. I paid off one of my student loans. You can find our original plan here. Basically, we’d paid extra on our payments for a few months before we had to go back to the minimum due to our move, and then we paid a lump sum with our tax return this year to finish it off. The rest is still a plan for the future. I hope that clears it up a bit.

    • Crystal says

      Kay, I understand! My husband had credit cards and car loans early on in our marriage, but we paid them all off asap (took about 3 years of paying them fairly aggressively), and then I’ve been paying mostly minimum payments on my student loans since about 2010, until mid-2012 when we decided to get serious about it.

    • Crystal says

      It’s for the one we’re renting out. We tried unsuccessfully to sell it, so we’re renting it for now. We are paying rent where we actually live.

  1. Lorneth Delora Peters says

    Stopping by from Titus2sdays! You are giving me encouragement to pay off my debit. Our plan is to have all credit cards paid off by September. I will keep you updated as you keep me updated!

  2. Sara E says

    Well, it has been a year now, do you have an update to share?? I am enjoying reading your thoughts and plan on this whole journey. Hoping for the best for you and your family!!

    • Crystal Brothers says

      Sara, thanks for asking :) We are still chugging along! Our renter situation fell through, so we have been paying our mortgage on our old place that we haven’t been able to sell, in addition to all of our other expenses. However, we are still on schedule to pay off that second student loan in the next couple of months, so that’s pretty awesome! We’re still hoping to be able to sell our place back home asap. Thanks for your encouragement! We’re so thankful that the Lord put all this on our hearts, because the steps we took to make room in the budget for debt reduction has been necessary for supporting our family during this time of extra expenses.

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