Tuesday, September 4, 2012

Debt Beast Takes Huge Blow...End is Nigh!

What follows is a celebratory post, so get ready to rock your party hats.

We have three months worth of loan payments in Canada, which means we have a wee bit of a cushion up there while we scurry around getting more payments for the future together. Why do we need the cushion? Well, we did a huge lump sum payment and ANNIHILATED the Canada Student Credit Line!

Needless to say (but I'll say it anyway), we're THRILLED!!! Every time one of our debt beasts is killed (because, let's face it, we're up against a swarm), we feel a great sense of accomplishment, and I fairly dance around the house in delight!

So, what does life look like in the Debt Beast Battle? Here's what it was last month:

Credit Line at $1617
My National Student Loan $23,542.89
Lastly, my BC Student Loan at $6005.97

The loan against Gabe's 401K is now $566
The credit card is sitting heavy at $6500
Gabe's Student Loan is now down to $2464

Our debt total was $40,695.86.

Admittedly not too shabby, but check out where we are now:

My National Student Loan $23,317.13
Lastly, my BC Student Loan at $6031.18

The loan against Gabe's 401K is now $405
The credit card is sitting heavy at $6350
Gabe's Student Loan is now down to $2358

Our new debt total is $38,461.31.

Wooo!!!! We're past the $40K mark now and sliding ever downwards!!

Even more exciting budgeting news:
We met with Verhanika last night (an experience we both loved!) to go over our household budget. While we consider ourselves budget-conscious and budget-competent people, having a financial planner go over our budgets with us is worth its weight in gold! We're going to become regular clients and do quarterly check-ins with her now, having loved the first session so much. We walked out with more ideas for what we could do, including a few new financial goals. This means you'll see a shift in the budget going forward.

First, we're going to change the way we use our accounts up here. Right now we have three accounts, outside of those tied to our credit: at a local credit union we have a chequing account and a savings account, then we have a second chequing account at a monster bank. We've been depositing my cheques in the credit union and Gabe's cheques into the monster bank, which meant we had two household funds. After speaking with Verhanika, we're going to switch that up and streamline our financial interactions.

First, we're going to get onto each other's accounts. I'm not sure why we didn't think of this already; it makes perfect sense. Second, we're going to consolidate our finances into a single household account. We're also going to build an emergency fund so we have cash on hand in case we ever need it.

This means our financial lives will look like this:
Emergency Fund
Travel Fund
Household Fund

Deliciously simplified! I love it already. We're also going to start making chunkier debt payments on the credit card, which is now our highest interest concern. This means making minimum payments up in Canada until the card down here has no balance. I am so looking forward to the day when we can look back on the credit card and simply shake our heads when we think of how long it kept us under. Once it's gone, we'll start attacking the student loan in Canada again. We should be on track to be 100% out of debt by 2014 December, all the while meeting travel and life goals!

Phew! It's pretty rocking to have such an awesome partner at my side who's jumped on the kill-the-debt-beast bandwagon. Adding a fantastic financial planner to the mix has really made our financial world go 'round!