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$9,722.72. Debt strategy?

February 28th, 2016 at 08:24 am

I'm jumping up and down. The payment hit, and the new mortgage balance is $9,722.72.

Sadly, though, I need to come up with a new payoff strategy. My wishful math projections were off by $3,000. I'm not finished with the taxes, but anticipate a refund of about $3,500 (probably more, but not much. I'm being conservative).

Once that is in and filed, that would bring the mortgage down to $6,222.72.

I'd hoped we could have it paid off by June using this strategy, plus making our normal monthly payments. $1,035 of each payment goes to principal. But now it looks like if I do that, it'll still be six months until it's gone.

I just want to be free!!

I'm trying to come up with a plan B. What strategies have all of you used to pay off a $10,000 debt as quickly as possible?

I thought maybe. Big maybe, if I tried to keep going on low spend month in March and April, I could free up maybe $1000 to $1500 extra to send to the principal.

But there are a lot of maybes. I think we can reign in all the little expenditures and wastes of money, but I also have to pay for DS2s next session in his fitness class ($155), the freezer is empty and I need to call the farm to stock up on more meat ($200). And, we've got five birthdays between March 11 and April 8.

Birthdays

I've told DS1, who is turning 8, that we were going to do a birthday party at the house this year.

It's at least $300 to have a party at a 'place.'
His laser tag party ended up costing an arm and a leg last year, once all the extras were in.

I sold him on the idea of having a video game party with pizza and cakes at our place. Boys love video games. I don't know why. We're going to borrow more game systems and screens from friends, and set up stations around the house with multiplayer sega, wii, and playstation games going.

I hope it will be cheap, fun, and give me the incentive to clear out the other section of the basement and turn it into a tween hangout spot. I've been eyeing it forever. Now I have a deadline!

Trips

We can't do low spend forever though. I'm spending a week in New Orleans in May to visit friends. And, we have to take a family trip to Arizona in June, for DH's parents 50th wedding anniversary. They wanted to do a trip, and it's going to cost us a fortune, but what can I do. It's planned mostly, and it's a family obligation. Argh.

18 Responses to “$9,722.72. Debt strategy?”

  1. creditcardfree Says:

    You could change withholding to free up some money...especially since you had a refund this might work, or you could withhold more later in the year. Shift investments to later in the year.

    Credit card rewards.
    Sell something.

  2. Beawealthywarrior Says:

    Man when I was that close, I went crazy selling stuff. I temporarily stopped other savings goals and sent everything to mortgage. Also I recently changed my number of exemptions for tax purposes due to the large refund I got this year. By doing that, I will be bringing in another $100 a month. Maybe that's an option. Good luck, its so exciting to be this close!

  3. Beawealthywarrior Says:

    LOL!!! Me and CCF was posting at the same time Smile

  4. creditcardfree Says:

    And we had similar strategies! Smile

  5. LivingAlmostLarge Says:

    Why is the withholding so high? That's too big a refund. Get it back earlier and pay off the mortgage faster. I'm with CCF.

  6. ThriftoRama Says:

    I've always had a withholding pad because we both have 1099 freelance income, and we've managed to avoid paying out of pocket and paying any penalties because of the pad. We used to get $11,000 tax refunds!

    I did load up a bunch of books to take to the store to sell, but that won't amount to much. DH just put a bunch of game models on ebay and they've sold for at least $400 already. I said he could keep it, but he said to put it to the mortgage.

    Gah. I'm so restless. I'm happy to be close, but at the same time, it also seems so far away!

  7. creditcardfree Says:

    How much do you save for retirement each month? Would stopping those for three months allow you to pay off the mortgage by June? If so, then starting in July figure out how much to increase your retirement by to make up for the lack of contributions during those three months.

  8. LivingAlmostLarge Says:

    But you could do calculations quarterly and pay what you owe and instead keep the extra refund in your pocket and pay out the mortgage faster.

    We used to do this. With stock vesting and money due, anytime we sold DH would just send 25% off to the federal government. After a year owe close to $10k well we started just underwithholding and ballpark quarterly what we owed.

  9. ThriftoRama Says:

    I'm reluctant to alter the tax withholding or the retirement savings (we max out 401k). Mostly, and I hate to say it, DH has to do it through his payroll department, and it's always a nightmare to make changes. It wouldn't be worth the hassle, considering I'd have to change stuff back after the house was paid off.

    What would you think of using the tax refund, putting any extra money we gain from low spend months, selling things, etc. to get the balance down as much as possible. Then, in June, if it's down to $3,000 or so, paying what's left out of our savings account. It'd only take a month and a half of no mortgage to put the $3,000 back, and all of our expensive trips would be behind us and presumably paid for....

  10. creditcardfree Says:

    Okay, I get that if all your retirement savings is done through your husband's payroll that is harder. Not impossible though. I figured maybe you had Roth or IRA contributions.

    I think your latest plan here in the comments is a good one. I'm sure you are good for putting savings back. Smile

  11. ThriftoRama Says:

    I pay my IRA out of my freelance earnings, but I'm already delaying that until the house situation is settled

  12. Beawealthywarrior Says:

    I would definitely throw tax refund at it. When I got close, I took money out of my car replacement fund to finish off the mortgage. Like you, it took no time to replenish it!!

  13. Buendia Says:

    I am so excited for you! I like your plan - I have a similar plan which is to pay the remainder off with savings when we get that low then replenish savings. It doesn't save much on interest, but lots and lots of piece of mind.

  14. ThriftoRama Says:

    I did some calculating last night, and it seems if we stick to our cash-only weekly budget ($300 for everything), this month, we might be able to send an extra $750 to $1000 of next paycheck to the mortgage balance. This would be awesome. I'm going to be trying REALLY hard to stick to that cash budget! I'm also heading to the bookstore today to sell a bag of books. They don't pay much. I'll be lucky to get $20, but I can put that in the piggy bank, which is money that can go to the mortgage once it adds up.

  15. creditcardfree Says:

    Good plan, Thrift! I'm cheering for you. Smile

  16. Beawealthywarrior Says:

    great, keep us posted as you kill of that mortgage!!

  17. ThriftoRama Says:

    Only $13 for the books, but oh well. It's in the piggy bank!

  18. creditcardfree Says:

    It all counts and adds up!

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