Confession here: I fell off the debt reduction horse during the past few crazy, unstable years. My net worth has grown, but whereas I was out of debt in 2009, I accumulated, at a peak, 30K of non-mortgage debt (currently $25,667). For the first time in years, my income is stable and no family crises loom, so it's time to get back in the saddle. First step was getting back to posting income and expenses with YNAB, which I used to do. Nice upgrades to the program during the past 5 years since I last used it. Second step was consolidating the credit card debt with a personal loan-20k, 5 years, 10.9%. I'm tired of juggling 0% balance transfers. And it won't take me 5 years to pay...but I have flexibility with a longer term, just in case. And step 3 was to temporarily cut my retirement savings to 3% in order to add $420 a month to emergency savings. I've been living with too small a buffer, which is why the debt accrued. Increase the buffer, pay down the debt, max out retirement savings once I have more liquidity...and hopefully not only keep the job but eventually get a raise. My net worth is currently 27K higher than it was 6 months ago when I started the job, and hopefully the market and luck are with me and I'll do at least as well in the second six months. Overall debt to equity is currently 20.7%. Aiming to get it lower still.
When you fall off the horse, get back in the saddle
May 9th, 2015 at 04:45 pm