At the beginning of the year, I declared 2015: The Year of Less. Throughout the year, I'll be sharing what exactly that entails and how I'm executing the idea and mantra of less in my day to day life.
Year of Less: Debt
I had to start the series with this one. After all, this is a pf blog!
When I decided that this year would be The Year of Less, my debt immediately came to mind.
As you may or may not know, I started this blog as I just climbed out of credit card debt for the first time. I’ve since fallen in and out of credit card debt and it’s frustrating to say the least.
Not to mention all the other debt I have. Credit card debt… student loans… car loan… mortgage… oh my!
Current Debt Breakdown
As of the end of 2014, here is what my debt looks like:
All in all, my debt amounts to $308,598.
I don’t really have a set number that I want my total debt to be at by the end of the year. The Year of Less means less focus on end goals and more focus on habits and ongoing changes that need to be made. With that being said, this is what I hope The Year of Less will bring to my debt.
Credit card debt: eliminate completely
That’s right. I’m sick of focusing on my credit card debt and I’m sure you all are tired of hearing about it. 2015 is the year where I get rid of my credit card debt for good. I’ve even stopped saving for my wedding so I can focus on annihilating my CC debt!
Student loans: slightly overpay every month
My original goal when I first started this blog was to pay off all of my student loans by December 2015. Oh, I was so naive. Now, being at the start of 2015, I know that this goal just isn’t realistic. Not only am I still battling high-interest credit card debt, I’ve got a wedding to pay for! So, the game plan for this particular debt is to pay the minimum payment each month PLUS I’ve rounded up to the nearest $100 increment. That’s it.
I know, it’s a little disappointing that this debt won’t get paid off according to my original goal. But I’m not too worried. I don’t have any private loans, so the interest on these bad boys is pretty low. Letting go of the original accelerated payoff goal means less stress, too.
Car loan: minimum monthly payment
Although my monthly car payment isn’t exactly small, the interest on it is. I don’t mind paying the minimum on this for this year. I do plan on accelerating the pay off sometime after the wedding, but for this year, minimum is the way to go.
Mortgage: minimum monthly payment with occasional overpayments
My real estate agent did a wonderful job in locking us in at an incredible rate, so I’m not exactly in a rush to pay off this debt. So for the most part, the minimum monthly payment will do.
As far as the occasional overpayments go – my mom, brother, auntie, and I all split the mortgage and house bills. Every month, I pay the minimum on the mortgage as well as make sure all of our bills are paid on time. Since the house bills are on different cycles and are slightly different each month and quarter, there are some months where we have an overage of funds. When we have extra in the pool, I throw it straight to principal.
Less debt = more freedom
When you focus on less, you make room for more. So what does less debt mean for me? Less debt means more freedom. More specifically for 2015 – less debt means more freedom to put my money toward my wedding savings.
In the long run, I want to be completely debt free. Who doesn’t? When that glorious day comes, I’ll be more free not only from credit card companies, but also my student loan servicers and mortgage company. When I no longer have monthly payments to others, I am free to finally pay myself more and even give more to others.
That’s the end goal of all of this. That’s why I want to focus on less debt in 2015 and in all years to come after that.
What are you doing in terms of your own debt? What does less debt mean to you?