Thursday, May 1, 2014

Debt Free by Thirty


It has been a goal of mine to be debt free by the time I turn 30. When June 24th hits, I will have exactly 4 years to accomplish this. 30 feels far away but when I look at that massive red number, it feels a little REALLY overwhelming. But a dream doesn't become a goal until there's a plan in place so it's time to really dive in and make this happen.

As of today, my debt number is $64,202. Ugh. What a painful thing to type. Rather than dwell on the overwhelming mountain, I'm going to try to think of it as a challenge.To make it more achievable, I'm going to break it down into smaller goals.

I need to pay off $16,050.5/year in principle alone. Including interest, I will need to pay $20,000/year to stay on track. Trust me, typing this is making me want to throw up. But I can't accomplish it if I don't face the facts.

If I'm looking at $20,000/year, that breaks down to $1,667/month in debt payments. Honestly, I'm not sure that's even possible. Currently I pay anywhere from $500-$1,000 each month and I can't imagine an extra $600 magically showing up in my bank account each month.

And if I'm really being honest, that number freaks me out big time. I have anxiety boiling up in my stomach and I want to cry thinking about all that money drained from my bank account.



BUT!

By paying it off in 4 years, I'm paying a total of $80,000 and after that point I will have $1,667/month to do what I want! If I were to pay my minimum payments of $500/month for the next 20 years left on my loan, I would be paying $120,000 total and I would be waiting until I was 42 to have spare money each month! Sounds like it's worth the sacrifice to me! 

It's time to figure out just exactly how to make this happen without eating strictly ramen noodles for the next 4 years!

7 comments:

  1. I think looking at the total amount paid in different years is really motivating for me because interest is a ton of money and if I could save on it how awesome.

    Good luck making your goal!! You can do it :)

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  2. You CAN DO IT GIRL! :) It's crazy/scary/stressful looking at the big number, but breaking it down like you did does help! As long as you keep after it and try try try, you're going to get there! In just a year's time you will already feel so much better and have so much weight lifted! :)

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  3. I KNOW you can do it! 4 years sounds like a long time now but 4 years from now you'll be DONE and have it all behind you. It will be AMAZING and set you up for so much success and financial freedom! I will be here cheering you on :)

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  4. This was my goal too! Unfortunately I'll be 30 in August. BUT fortunately I'm right on track to be debt free by the time my 30th birthday hits!

    For the last several years I haven't used any kind of credit cards, only the money that I actually take in so I don't add to any debt. Good luck! I know you can do it!

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  5. You can do it!!! This is actually a really great idea to pick a date to pay it off by and you have inspired me to do the same thing. Plus it gives you something hopefull to look forward to on your 30th birthday! Bleh! One good thing about turning 30 now! Haha! Don't give up!!!

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  6. Being debt-free by 30 is a great goal, Katie! It may seem difficult, but one thing that I’ve learned in my life is that nothing is impossible with great determination and strict planning. If you have these two, there’s no doubt that you can do it. But if you’re still in doubt, you can always ask for advice to a professional or a friend who has handled such situations.

    Charlena Leonard @ WeidnerLaw

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  7. Being debt free by the time you turn 30 is a great goal, KP! It's not easy to be financially comfortable, but I'm sure you'll attain it in no time, seeing as how wonderfully focused you are with the goal. In any case, I'm rooting for you! Keep us posted. All the best to you! :)

    Stanley Erickson @ Bankruptcy Happens

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