Financial Freedom!

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I’ve written before about my progress towards financial independence. We have been lucky enough to remain employed during the craziness of the last year, and so we continued to chip away at our mountain of debt.

Yesterday I paid off one of our last remaining debts. When I first decided to work towards being debt-free, it seemed like an insurmountable hill. I did a bit of research and found Dave Ramsey and his snowball method. I figured I’d try it. Even though the method doesn’t make the most financial sense, it made psychological sense. So I aimed at our smallest debt first, even though it didn’t have the highest interest rate.

After paying off our smallest credit card bill successfully, I moved on to one of our car payments. After 6 months, that car loan was paid off. We kept plugging away, throwing any extra money we made towards a debt.

After over a year of being mindful of our spending and concentrating on paying down our debt, we are (essentially) debt free! Now, a bit of explanation here, because we do still have two debts – our mortgage and one car loan. However, using the snowball method, we have paid off a car loan, a bank loan, and 4 credit cards! That means that all the money we had been throwing towards debt can now start going into savings and other investments.

We are likely going to move, so paying off our mortgage isn’t a huge goal for us. Our mortgage payment is small and it’s only a 15-year loan. When we do move, the equity in this house should pay for our next house outright, as we are planning on downsizing quite a bit. So for us, the mortgage debt, while still there, is not a huge concern.

The remaining car loan is for my husband’s car, which he is currently not driving, since he has a company truck. It isn’t getting used for daily driving, which means he isn’t putting any real mileage on it. We will still be paying on that loan, of course, and I will pay extra, as always, but that car will likely be traded in as well when we move, so again, it’s not a huge concern to us right now.

The mortgage and the car loan both have low interest rates, so it was more important to us to wipe out the credit card debt first anyway. We were able to pay off the last remaining card with our tax refund this year, and paying off that balance felt so amazing! I can’t wait to get the next statement with that $0.00 balance on it. 😀

With our debt paid off and my oldest graduating with no student debt, we feel like we have achieved some amazing goals. We still have tuition for my youngest and those last two bills, but we will be able to put away a significant portion of our income each month, even after accounting for those.

When I first started this journey, it felt like we would never make it. Every time I turned around it felt like we had another bill to pay, so to have made it to this point is a huge weight lifted off our shoulders. I’m not abandoning my spreadsheets or budgeting planner, but instead of groaning every time I see a balance, now I can smile as I see our savings grow. My husband and I are excited to make plans now that we have achieved our goals – the future is definitely looking bright.

Debt Payoff Update

Credit: Pixabay

Even in these uncertain times, my husband and I are still trying to pay off our debt. Having less to pay in bills each month means more of our income can go where WE want it to.

We were focusing heavily on paying off debt, and while we are still doing that, we have scaled back a bit on how much we are paying. If you remember, we refinanced our house a while ago, which lowered both our interest rate and our payment, as well as putting a nice cushion in our savings account.

All of those things have made it easier not to panic financially. My husband, while considered an essential worker, has still had his hours cut at work. Not the end of the world, certainly, but that is money we aren’t getting now. In addition, I am off for the summer, so I don’t receive a paycheck. I’m still not sure that my job will open up again in the fall, but we shall see.

In spite of all that, we have been able to continue making additional payments on our mortgage and to pay off another credit card! I wanted to keep making the same mortgage payments we were before, even though our payment went down, because that means we are paying towards the principal of the loan every month. And since it’s the amount we’ve been paying for years, we don’t miss it.

When I first started trying out the snowball debt payment method, we had our mortgage, a car loan, a bank loan, and 4 credit cards. In the last six months, we’ve paid off the bank loan and one of the credit cards. Today, I paid off a second card! It feels so good to see that zero balance. 😀

We still have a ways to go, but we are slowly getting there. Since I am off for the summer (sort of), I am working on creating new side hustles and income streams for us. I talked previously about launching my Etsy shop (it still needs work!) and I am planning to start a YouTube channel where I will be posting videos of the mandalas I draw. Once I have the channel up and running, I’ll post more about it here.

Both of those projects have taken more work than I initially thought, but I am determined to see them both through. Any extra income I can bring in can go towards paying down our debt, so that we are in a better financial position if anything thing else crazy happens this year.