The Official 2021 Debt Smackdown
Welcome to YNAB's 2021 Debt Smackdown!
Happy New Year! 2021 is going to be a good one, I can just tell - or we can will it to happen 😉
With over 500 participants and more than $4.2 million in debt payoff, 2020 was absolutely incredible for the debt smackdown group! I know some of us are still left with debt to knock out in the new year or you're joining in for the very first time. Either way, you've come to the right place. We'll use this group for accountability and support as we crush some (or all!) of our debt in 2021!
First, a quick shoutout to BritishMuseum - they have hosted our debt smackdown for the last few years and became DEBT FREE at the beginning of 2020! What an impact their work has made on this community!
If you want to pay off some debt this year, here's how it works:
1. List the amount of total debt that you owe.
This step is to give you an awareness of your current debt situation. Feel free to share, this forum is a safe and nonjudgmental place. You can also decide to keep this information private, you don't have to post your total here if you are not comfortable doing so.
2. Post in this thread the total amount of debt you would like to pay off during the 2021 calendar year. (This part is required.)
Feel free to break down the amounts by credit card/type of debt. Also, if you have a specific plan or some ideas on how you plan to pay down the debt, you can post that too. Maybe your plan will spark some ideas for others on how to tackle their own debts!
3. Post monthly on the 2021 Debt Smackdown Sheet to track your progress. (required)
Claim a line on the spreadsheet, and post your total debt to be paid off, and the monthly amount that you send off towards it. Some people track their total payments and don't account for interest, some people account for principal only. The method you choose is up to you!
4. Check in monthly in this thread and report on how your debt smackdown is going. (required)
We'll be testing out some reminders this year when the month rolls over because we want to hear everyone's progress! Bookmark this thread and sheet so you can find it quickly at the beginning of the month!
If you come across this challenge later in the year, no worries, you can always jump right in. Just put zeroes in the months where you had not joined the challenge yet, and start in the month you join in.
Pro-tip: You can use ctrl+F (or command+F on a Mac) to search the spreadsheet for your name when the sheet gets filled up.
Last year, we paid off over $4million! Let's make 2021 even stronger!
In the event you have any issues with the sheet - please tag or DM Veronica
April Check in.... While this month is an even $1000 to the bottom number, I took advantage of a balance transfer offer. I transferred 3 of the 4 cards I'm paying down to a 0% for 18 months card. The plan is to use most of the interest on i was paying on those three cards to pay things down quicker.
Paid this month: $10437.48
Paid this year: $20,582.57 (61.15%)
Remaining goal: $13,077.43 (three -- now two! -- credit cards; immediate goal is the card with the lowest balance)
Thanks to federal stimulus money, we were able to knock out our wildest credit card, and it feels amazing! So despite some unexpected expenses, things are basically going according to our loose plan: we knew we'd have a bunch of money at the start of this year, and have used it to pay down a good chunk of debt. Now it's time to take it a little bit slower. I actually feel a little unsure of how we'll meet the rest of this debt goal and still keep everything else on track, but am hoping that the summer will bring in some extra money. (The money saved on interest/debt repayment from the card we just paid off will go to random domestic things like childcare and car repairs.) But for now, trying to bask in the happiness that we knocked out that one card . . . it feels so good! Will store the feeling up for when I'm tempted by instant gratification!
Belated March progress report on my battle against the student loan beast:
As of February 28, 2021: $184,064.51
As of March 31, 2021: $182,753.71
Notes: Regular monthly payment resulted in principal reduction of $1,310.80. Wasn't able to make any extra payments. Total reduction of principal in March: $1,310.80.
Year-end goal is to get the balance down $41,000.00 (from $190,958.60 starting place on January 1, 2021) to just below $150,000.00. With a $8,204.89 reduction so far this year, I'm now about 20.01% there.
Total debt: $37, 975.17
1.) credit card: $3,113.69 (did a balance transfer this year to get a 0% interest rate, so I can hopefully pay this off in 2021)
2.) personal loan: $7,148.20 ( credit card debt + private student loan consolidated)
3.) private student loans: $27,713.28 (refinanced this year from 4.46% to 3.08 interest)
I'm glad I found this thread. I would like to pay off my debt, but I feel like I need to be better at making a plan and having more of a strategy around it. I started using my credit card for everything so I can get points. I am very good at paying off what I spend, but find that my extra money is not going to the previously accumulated debt, but instead towards miscellaneous purchases.
I keep saying I'm going to get better, but I clearly am not. Case in point, I used my extra money recently to buy a standing desk, which is nice, but wasn't really necessary. I would love tips that others use to stay on track with impulse spending. TIA!
Principal down to $15036.50 which makes $538.81 paid on that. Interest is killer when it's on debt instead of returns... It's not even the minimum payment I do on the loan but it's going down. 13% for the year. Not the 25% I'd have hoped at the quarter mark, but I'm staying positive that progress is happening on this and all the rest at the same time. If I don't pay more than I "have" to, I'll be out of the woods with 2 out of 4 loans by the end of 2023. It's been a long time coming and I want to make that sooner, but it's progress.
I'll be moving in May which is expensive so I'm not putting anything else to it this month and it will be minimal next few as well. I'll have to figure out new expenses. My rent is going up and I'll have to buy a washer/dryer that wasn't planned for so I'm worried I'll be adding to debt in the next few months, but the move is going to be worth it. Being closer to my mom means we can get occasional free daycare when the baby is born and looking at the cost of daycare, anything in that regard will be a huge help. I'm worried about how expensive the baby will be because I'm stretched thin already but I'm trying to be more logical on what are true needs in my expenses to cut more but it is tough.
I feel like my perspective needs a fix. I always feel overwhelmed with finances which makes it hard to be smart with choices. I make decisions out of fear or trying to make myself feel better and not decisions from a logical place. I'm working on being more conscious on it but still am overwhelmed most of the time. Plus I'm just crazy hormonal and everything as it is with the first time pregnancy that I'm much more prone to intense feelings as it is. But making it a mantra, progress is happening, there's always a light at the end of the tunnel.
I'm a bit late to the party but as they say "better late than never"...
I just claimed line 200! Wifey and I are looking to destroy $11,000 of debt in 7 months. This round breaks down as follows...
CC's - 9350
Back taxes - 1650
We're planning to do a snowball attack and use any windfalls to destroy this debt. Here's to digging out slowly but surely!
March AND April update: Line 99
March: Paid $882 towards my credit cards, truck loan, and RV loan.
HOWEVER, I added $1375 of debt to one of my cards because my lawyer needs a retainer. It was necessary and I'll get that back when my legal business is done, but it still chaps me to increase debt in any way. 😣
April: Paid $2281 towards my credit cards, truck loan, and RV loan.
Credit card with legal fees increased in debt by $197
Some excitement: A year and a half ago, I set up a balance transfer to a new card with the O% APR deal during the promo period. I have been snowballing my other cards with high-interest rates for the last year because I expected to have sold my house well before now and use the proceeds to pay off the balance transfer card. So I'd only been paying the minimums. In March, I realized that my house sale may not happen for a while and my promo period is ending in the middle of May. 😳 I'm guessing that the interest penalty will be in the range of $2000 if I don't meet the deadline. I still had $6700 on that card and about 8 weeks to come up with that money. I'm four weeks out and still have $5200 to go, but I have several options that may pay me in the next month. If everything goes sideways, I do have *barely* enough in my emergency fund to cover it.
So whether I can eek together several windfalls or I have to dump my e-fund, this time next month I will be about $6000 lighter in the debts category. 🤞😅
Loan Balance: $4518.88
April Loan Payment: $321.79
Goal: $1271.25/$3600 -> $1728.75
Spreadsheet says 35.4%
Pretty happy with the progress, a little confused why the interest goes up and down month to month instead of down consistently.
undebt.it still says July 2022 payoff, I don't know when it will drop down a month since I'm paying the extra $50 plus the interest charged each month. I hope it does drop down, but since the interest is so low (only $20ish/month) I don't know that it will have a huge impact on it. But it's still awesome to look at the total and see that it is saying only 16 more months on the loan. I think I've cut it down by 6 months over the original loan date, which is really awesome because I didn't know how that would be possible in the past!
April check-in: paid off $4499
More good news. I got a very unexpected bonus at work this month so I was able to put most of it toward my credit card debt.
With that money, I have completely paid off another card and just have one more card and a smallish student loan to go. I can finally see the light at the end of the (very long) tunnel!
I want to share some small wins and ask the larger group for feedback.
1.) I checked my budget in YNAB for my groceries category before buying any groceries yesterday.
2.) I didn't go to the nail salon an instead did my nails myself.
3.) I have been able to budget my money for the whole month (only get paid monthly in my new job) & I would have never been able to do this in the past. So glad I have discovered YNAB to make my money stretch and for the categories!
Here's the piece where I would like some feedback. I have lived in apartments for 13 years and 6 of them at my current place. It's a great neighborhood and I have enjoyed most of my time here, but I have been wanting to move for years. I have held back though because moving is expensive. Until I have been hearing lately that people have been moving to new apartments and getting insane deals (mostly likely due to COVID) like $500 security deposits and free rent for 1 or 2 months. I would love to move to an apartment with an in-unit washer and dryer and underground heated parking. I also would like to move to a building that's a bit more modern and has less children crying all the time.
Here's the rub, I've held off due to it being expensive, but realistically I could afford a place for $100 or $200 more a month. However, I don't want to lose sight of my debt and I have about $3,000 between two different savings accounts. Would it be wise or unwise to use some of that to move to a new place? Paying off my debt could take years, so why hold off anymore? TIA!
March balance: $14774.41
April balance: $14673.53
$1276.53/$2500 = 51.06%
I didn't manage to get a full snowball payment in this month, but repaying all that I charged plus a few snowflakes here and there at least got me ahead just a touch, which is definitely a win that I'll take over the alternative lol. :)
Highest Balance on Student Loans in Oct 2019: ~$70,900
Fed Student Loans Today: $47,504
2021 Debt Smackdown Goal: $18,900
Jan: $ 0.00
Feb: $ 0.00
March: $ 254.64
$4,918.76/$18,900 = 26%
1. In a previous post, I talked about how we decided to put all of the money we had saved for the 2020 student loan debt smackdown toward purchasing windows. We're very happy with this decision, but it also means we start over saving up toward the student loan debt.
2. A positive change that will help with this is that I haven't been working, and I accepted a new job!
3. The new job does mean that we might have to buy a car since we're now a 1 car family & will work in opposite directions.
April Check-In (line 73)
Made solid progress this month - into the four digit realm... Yay! I realized that my large payment last month to Loan #2 put my autopay on hold until December, so I'll have to either set up autopay on my bank's end - or just make the payment myself. I kind of like making the payments myself - puts me a little more in touch with my budget.
But this month, I went ahead and made a larger payment since I was making a payment anyhow - even though I'm trying to buttress (thank you to Schitt's Creek and Moira for re-introducing that word into my vocabulary!) my emergency fund with my category of budget surplus and not making monthly large payments - but spacing them out. But I just couldn't help myself! I've got a third check this month so I'll have some extra wiggle room in case of something unexpected hitting my budget this month and I'll get my "earmarked for loan 2 payoff" fund back up above the threshold that makes me feel a little more security.
Total as of:
Jan 1: $15,925.65
Mar 24: $8,870.31
Loan # 1: 0.00 (paid off in February)
Loan# 2: $5,329.39 (by August)
Loan#3: $3,540.92 (by October)
2021 Overall Goal: $25,000 paid off credit cards debts
Paid January-March: $5,373.16
Paid in April: $1,857.27
Progress towards goal: $7,230.43/28.92%
It's funny how different my philosophy on debt repayment (or should I say "attempted debt repayment" since it has never been successful before) has changed since starting YNAB. We had a few windfalls this month (it's three paycheck month for me, and we also finally received our tax refund). So, why doesn't the April payoff amount reflect that? Because, duh, I have put money into True Expenses to prepare for upcoming expenses that would have previously gone on credit cards! It's so simple, but it is the reason why this time feels different.
Keep on, keepin' on, everyone!
April 2021 (second of five 5-week months!), Line #37
Week 1: Tithe, then both checks (short week due to a camping trip & truck repairs) were applied to the May budget. $300 per week goes to the income replacement category (🍋 Lemonade Stand) through May.
Week 2: Tithe, then after putting $300 to the Lemonade Stand, remaining TBB from both checks is applied to the May budget (it's ⅔ funded).
Week 3: Tithe, then May is 90% funded & our Lemonade Stand got a boost ($300).
***Brainstorm #1: If we can use the remaining April checks to fund May & June, then May's checks will go toward the car loan.***
***Brainstorm #2: Let's put 25% of Underfunded (aka Weekly Chunk) into "💲💵 for Next Month" each week rather than into individual categories.***
***Brainstorm #3: Our work schedule will be lighter in May & June due to camping & visits with our kids & grandkids. This might not be the time to send the whole Debt Snowball before the end of the month.
Week 4: Tithe, then after funding the last smidge of May & adding $300 to the Lemonade Stand, the May budget's Next Month line (for June) got a Weekly Chunk. $1100 went to the debt snowball (car).
Week 5: Tithe, then Lemonade Stand ($400; it’s topped off & hidden until needed) & another Weekly Chunk. Now June is 50% funded. $555 went to debt snowball (car).
Hubby’s mom’s leukemia treatment is going fairly well. She's in the hospital.
Total paid in April: Minimums plus $1755.
Miles driven for work: 3137 + 4674 + 6076 + 6287 + 4826 = 25,000 miles