We’ve been working diligently since May of 2009 to pay off our consumer debt. So far, we’ve paid off over $58,000. I’m pretty darn pleased with that.
According to our Snowball Spreadsheet, which tells us when we should have things paid off based on the balances, interest rates, and our payments, we should have all the credit cards and the line of credit paid off in ten months.
But there are some things the Spreadsheet doesn’t realize.
First, at the end of November, Chef lost a lot of income when one of his clients discontinued a large standing order.
Second, Chef’s CNC machine quit working at the end of December. He had been planning to put a lot of money into either updating the machine or getting a new machine anyway, but he had thought he’d be able to put it off a while. Now it seems the need is more urgent, so we’ll put less toward the debt snowball so that he can put money into a sinking fund to pay for the improvements to the CNC. He really depends on that machine for his work, so it’s important to have it working.
With one big change in our income and another big change in our out-go (that’s a word, right?), I suspect that the completion date of our Debt Snowball may be pushed back to 2012.
And that’s disappointing. I was looking forward to having all our consumer debt knocked out so that we could build up our emergency fund and then work on paying off the house.
However, we are still working on our plan. In fact, when we learned about the income reduction, we started putting more money into our emergency fund. We wanted to be sure we had a better cushion in case something major came up. Right now, an extra hundred dollars or so each month builds up that fund. That helps me feel less nervous about our financial situation; plus — if we don’t have to use it for an emergency — it’s that much less we’ll have to save up after the debt is paid off.
The nicest thing is just knowing that even though everything may not be paid off exactly when we’d thought it would, Chef and I still agree to the plan and we’re still on track.