3/12/2014

My Money, My Choices - Level 1, Activity 2

Posted by with 3 comments | in , ,
Activity: Create a Debt Repayment Plan

This activity really aligns with what Jordan and I were talking about over the last few weeks - increase mortgage payment, pay of LOC, or pay off escape.  Well...let's look at it all and make a plan.


Gail feels very strongly that all debts must be paid within three years of starting a pay off plan in order to avoid debt fatigue.  It has to be quick enough to realize gains without being so fast that it feels like an impossible task.

So...leaving our mortgage out of the equation we have two car loans and a LOC - given that the Kia has a 0% financing I'm going to focus on the Escape and the LOC.

Using Gail's Own Up to Your Debt Worksheet online, I came up with the following options:


Jordan and I currently have $900/month committed to debt repayment - so we're short $230.96/month to get it paid within three years.  I believe very strongly that we will be able to come up with these funds with Jordan's Commission - but we need a way to stay on top of that.

To help us do this, I've done two things.
  1. Added an extra line item on our monthly budget 'Extra to Escape' (because it has the highest interest rate) - as a reminder that money needs to go there before into the planned spending categories.
  2. Added a tracking bar on my blog to stay accountable for the extra $8,314.56 we need to come up with over the next 36 months.
So, there's the plan...what do you think?

Check out the My Money, My Choices program by clicking here.

Related Posts:

  • My Money, My Choices - Level 3, Activity 3 A couple days ago, I wrote about creating the Emergency Fund, today is about automating it.  This one is really simple - just set up an automatic savings programme.  With a goal of $25,000 it's going to take us a … Read More
  • My Money, My Choices - Level 3, Activity 2This activity is to set up an Emergency Fund...which Jordan and I have...but is it being used properly?  This is what Gail says an emergency fund is for: Needing new tires is not an emergency. Nor is a new roof, that re… Read More
  • My Money, My Choices - Level 3, Activity 4The fourth activity in level 3 is getting set up on a company pension plan if you're not already on one - thankfully I am but unfortunately, Jordan's company doesn't have one. Mine is a defined contribution (not defined be… Read More
  • My Money, My Choices - Level 3, Activity 5 & 6In this activity we set up our retirement savings..and automate them (activity 6) I think it's really apt on the tail of yesterday's post about my grandmother in retirement and the post we did about a week ago or so on Level … Read More
  • My Money, My Choices - Level 3, Activity 1This activity takes us through calculating our personal savings rate.  Gail tells us that there is basically two different types of savings. Long Term - Retirement Planned Spending - Emergencies, Kids School Funds, Vaca… Read More

3 comments:

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  2. Morgaine12 March 2014 at 13:39

    That is a smart plan! I agree with Gail, more than 3 years of paying off debt makes you feel like it'll never get paid off. Good luck! :)

    ReplyDelete
  3. Alicia @ Financial Diffraction14 March 2014 at 12:16

    Gail is so awesome - she has some great advice. I hope you get there in the 3 years :)

    PS, I popped over here from Morgaine's blog.

    ReplyDelete

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