The Official 2020 Debt Smackdown
Welcome to the Official* 2020 Debt Smackdown!
Happy new year everyone!
That's right, we're back for 2020. Last year we saw about 310 of us brutally destroy about $3 million in debt. Wow. Right. Massive achievement. Can anyone say 'YNAB blog post'?
But there are plenty of us with still some debt to go. And as much as I hate debt, I do love a good spreadsheet, so here we go. A few of us have come into 2020 with some debt remaining. Maybe over spent at Christmas. Either way, this challenge is open to anyone who wants to eradicate that debt from your life.
So what's this about? If you are holding onto some debt as you enter 2020 - and would like to get rid of it - this challenge is for you.
To the participants from last year, welcome back! For some of us, our total debts are too large to smack down completely in one calendar year, so if you're here from last year, congratulations on your progress and let's keep on doing this! In 2019, we collectively paid down over $2,800,000 in debt! An increase of OVER $1,300,000 than in 2018!
For all new participants, we are happy to have you join in this year! New blood is always welcome. Let's all motivate each other to pay off those debts and continue moving forward to financial freedom.
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 2020 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. Check in monthly in this thread and report on how your debt smackdown is going. (This part is required.)
4. Post monthly on the 2020 Google Sheet to track your progress. (This part is 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!
If you come across this challenge later in the year, no worries, you can still 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.
Last year, we collectively paid off $2,800,000. Let's smash that number again in 2020!
Please let me know any issues with the sheet - sometimes things are a bit wonky when making new ones!
*Official in the sense that there's a spreadsheet. Not official in the sense that it's made by YNAB. I'm just following naming conventions here :)
I have paid off over 15,000 in consumer debt so far this year.
23,537now 17,250 and counting
Personal Loan (2):
4,573GONE in April
Personal Loan (3):
4,2081,875.28 I'm hoping to eliminate it THIS MONTH 0 Int CC: 4,763GONE in March
Total Debt I want to pay off in 2020: $35,000 and be consumer debt free in 2020
401K loan: 48,173.13
TOTAL Freedom Fund 67,207.16
- Focus everything extra on smallest debt to payoff in 2020 - avg 3K a month.
I started making a plan to get rid of this by the end of June but I think I'll be done earlier than that. Then only ONE debt left (for this year).
I will be consumer debt free - and that will be an incredible achievement, something I have never been in 25 years. BUT - I will still have a mortgage and, much more troubling, I will have a 401K loan (that I took out for the downpayment on my house.) If I were to quit or get fired, I'd have to pay it back within a month or so. So I'm beginning to really focus on my "Freedom Fund" the total amount I need to save to be able to leave my job free and clear. So I'm adding it here. Of course you can't send early payments so you just have to save the full amount.
Big Picture Goal
2. In addition to paying off debt, save enough (or be able to re-finance to eliminate) 401K loan of 48,173.13
- Focus everything extra on smallest debt to payoff in 2020 - avg 3K a month.
May check in: I am fortunate that my paycheck has not been impacted by the pandemic, even if 20 hours/week of telehealth appointments is a bit draining. Thus, after my fear of the unknown wore off, I was able to pay off my initial debt goals last month (car loan 3 years early, and personal loan 4 years early—woot!).
This got me I got inspired to pay off my phone. Not because I was paying interest, but because it’s consumer debt that I had overlooked because it’s so normal as was part of my monthly autopay. I decided I would rather be as true with myself as possible about my actual savings and set myself up to feel confident the money I have is actually available to me. Plus my phone payment will be $25 instead of $55 now.
So, with $437.40 paid, I own my phone (paid off 14 months early) and it feels good that my monthly phone bill is down from $55 to $25, and that I have eliminated the last hidden non-mortgage debt I had.
The plan from here is to keep paying down my home loan ($271,950.58 with a decently low, fixed interest rate of about 4.5%) for 29/30 more years, put all my extra money toward getting 6 months ahead on expenses (I’m 1.5 months ahead currently), then open up my “Wish Farm” again. (Check out this great approach to savings goals: https://www.youneedabudget.com/wish-lists/)
Keep up the awesome work everybody!
I am extremely lucky to still be working through COVID, and was able to put my stimulus check towards debt. Plus I missed my vacation, so that's unspent money in my pocket for a future vacation. Really trying to clear up my one private student loan before I conquer other bills.
May: $1,466.95 paid
2020: $7,057.30 paid/$10,000 goal
May check in: Pretty much the same as April. I've cut back on my debt snowball to focus on an Emergency fund and haven't yet started working on a side gig to make up for that. Happily, both my husband and I are still working and in fact with the factories starting up in Michigan again, he should start being busier at his job, so hopefully we'll get a bit more on the profit sharing in his company...
Balance from last month: $2793.00
Paid down this month: $300.00
New balance: $2493.00
Debt Smackdown Totals: $2,493.00/$3885.24 = 35.83%
Still hanging in there, and I managed to pay extra down on my debt goal and keep more in savings as well, just in case. I still have bouts of anxiety off and on about what on earth I would do if my job went away for whatever reason. We've all been working from home, but work from our various clients has really dried up while they all sort of wait things out as well. So while I'm getting a paycheck, I'm essentially just sitting around doing nothing. Maybe a couple hours of work every week. It makes me really anxious that my company will make staffing cuts, though my boss reassured me earlier on during this mess that they have always been very conservative in their savings and are set for some time with zero income coming in, so while I hope we'll be find ... well, telling anxiety to be reasonable and logical - HA.
Of course, as things drag on and that lower level anxiety just sits there constantly stressing me out - what wonderful motivation to really kick my debt and spending habits to the curb sooner rather than later to get off the nerve-wracking paycheck to paycheck lifestyle. I would love to not have this stress if - god forbid - something like this happens again.
Just want to raise the point that eliminating all debt is not necessarily a good strategy. The most obvious example is a home mortgage. When you take into account the low interest rates, as well as the fact that most home mortgage interest payments are tax deductible, then carrying a home mortgage is actually a GOOD thing. If your interest rate, after taking into account the tax advantages, is less than inflation, then you are effectively making money every month simply by holding onto that mortgage. Compromising other objectives (education, remodeling, having reliable car, medical care, enjoying life, etc... you name it) in order to pay down the mortgage may be a bad strategy. That's the most obvious example, but there are also other cases where taking on debt can be a good plan.
May check in. $122.41
Still paying only minimum balances and setting aside the balance of the debt snowball. So $10 minimum on Visa (although I accidentally paid $20 because I forgot I set up an automated bill payment in bank and paid it manually so doubled). I think I might go back to full snowball. My work is still paying normal and hubby's work seems to be paying as normal. It was unclear for a while but now it seems like it should be business as usual for him. Paying the minimums only is depressing. No colouring. undebt.it shows some horrible debt-free date in the far far future. I think I need some momentum again.
March, April, and May check-in.
The debt we're paying off is federal student loans. Since there are no required payments, and no interest, and since there is a general feeling of instability, we decided to put the amounts into savings & then make a payment in Sept/Oct.
The amount we've put to savings for this category is:
These amounts have us on track to meet our goal this year. However, I'm not entering it in the spreadsheet until it is spent
May Check In :
Personal loan down to $20864 - that's $837 paid to just the principal this month. Chipping away at it and definitely made more progress on that debt than I've ever been able to before this year.
Credit cards are still being paid off in full each month so $0 there. Still have car loan and student loan on top of the personal but goal for the year was to focus on just the personal loan.
I'm a bit bummed because my company is changing the compensation program and I'll no longer be in the grouping that gets bonuses. I was definitely using those (and planning on them) for big waterfall payments to the balance of it which had been helping a lot. Now the game plan has to change - roll with the punches. It was already a reach goal to be at $0 on the personal loan this year and it feels even more of a reach now without those happening but trying to stay positive.
I'll still get a 5% one for the first half of the year in July but after that, no more. I do also get a raise in July as a buyback for the bonus program change but not sure what it'll end up being yet. More money each month will still be good but means I need to be better at controlling my spending and use that extra to the loan since I won't have a big lump sum to do it with instead. I liked the bonuses because I could just take it all and drop it over without having to think about changing my monthly expeensives as drastically for the same result. I got into this because I wasn't the best at self-control but I need to have more anyways and I can get a similar benefit from the raise as a bonus so I just need to commit to my priorities.
Still thankful I have a job during all this and very appreciative to get a raise and bonus still while all this is going on. Just gotta keep on keeping on.
This month I received a windfall. Since I already have 8 months emergency fund saved, I put that entire windfall of $5,000 towards my flex loan. I am very thankful for it and it puts me on the path to paying that loan off in June.
Flex Loan (9.99%):
May Starting Balance - $ 7,538.26
Payment - $5,040
Remaining Balance - $2508.26
Chase CC (0%):
May Starting Balance - $1,792
Payment - $100
Remaining Balance - $1,692
Once the flex loan is paid off next month I am going to continue to pay $100/month to the Chase CC and put the remainder in savings. I am just happy to see end nearing for the loan much sooner than expected.
Thank you to everyone for the support and for being so open and honest in this space. Hearing everyone else's stories has motivated me in a meaningful way.
May check-in! The weird ride continues... managed to get one place to approve me to work from home, and have adapted well and kept consistent hours. Thought that would alleviate some of the anxiety, and it has to some degree; but they're already trying to get us back into the office, which feels premature. Being a cautious sort, all the more so in a pandemic, I'm hoping they reconsider, I'm honestly doing better work from home right now since there's the little peace of mind that I'm able to do my part to help limit the spread so we can all get through this as safely as we can to the other side.
That said, I somehow managed to both up my savings rate (I have auto-transfers for savings) while also keeping my same, more aggressive, student loan payment. So I was able to send another $1,050 towards those loans this month. As is my norm these days, I'm keeping close watch of hours worked and am prepared to reduce that payment as needed for next month. Cheers, fellow debt crushers, and hope you're all staying as healthy and sane as you can!
Paid off in May: £756.10
Paid off YTD: £3756.29 (17.35%)
Another good month - Not paid as much as last month, as I was able to throw some savings that I no longer need for 2020 due to Covid at the credit card in April, but another little block on the thermometer filled in :)
Just 3 more payments to make on my target CC before that one is cleared, and excitingly in June that Credit Card will become the card with the lowest balance!
(Stealing Turquoise Major 's gorgeous layout ❤️)
Paid off in May: £703.17
Paid off YTD: £3136.56
Remaining: £6863.44 (for this year's goal) / £28,228 (total left to go)
I've inadvertently been gifted some money due to a family shift in circumstances, which could pay off our biggest debt or our five smallest ones or could replace the rust-bucket of a 18 yr old car we have sitting on the drive. I can't decide, so I've just put it in a savings account for now.
After much deliberation, my husband and I decided to take a larger chunk of our savings to pay off a number of things, including 2 student loans that I wasn't "racing" here.
We paid off our AMEX card, 2 Navient Student Loans, a Home Depot Card, an Ashley Furniture card, and a Discover Student Loan, for a total of $9,037.20 yesterday.
This frees up nearly $600 a month for us, which was more the goal. As small business owners (one in the travel industry) we aren't getting explicitly told there's no work due to the coronavirus, so we can't collect unemployment, but also work has dried up exponentially, and reducing monthly costs at this point was more important than earning a tiny amount in interest or paying off the largest interest debts we have.
Should I update my racing goals? Right now, I just plugged in what I paid yesterday and it's now showing basically an overpayment since it's more than my original goal.
Updates, March - May: I definitely forgot I had joined this... sorry about that. I have the memory of a particularly confused goldfish. I set a monthly reminder to update this!
I started a new job as a substitute teacher in January, after months of unsuccessful job hunting. Things were starting to get pretty comfy - in late February, my partner and I went out for a late Valentine's Day/"we're finally getting on our feet" dinner. Three weeks later, my school district shut down for the year, and I am once again out of a job. Whoops. I am still just so thankful for our health.
In March, I was only able to pay off ~$52 in March between my two credit cards, given the uncertainty of our financial situation, now that we were back down to just one paycheck - and a grad student stipend, at that. I spent hours and hours calling my state's unemployment hotline to figure out why my claim wasn't going through, but had no luck. I eked out just enough money to cover my half of the rent and a few grocery bills by working online.
My birthday came at the end of March, so, for April, I put some of my birthday money towards my final student bill payment ($65) and then paid my credit card minimums, for a total of about $118 in debt payments for April. I spent my Mondays, Thursdays, and Fridays trying to get ANYONE on my state's unemployment line to pick up. I got through once, held for five hours, and then had an operator accidentally pick up. After listening to her argue with a colleague for about three minutes, she finally noticed she'd picked up my call, then hung up on me as I begged her to please just put me on hold. It sucked. It was disheartening. We barely squeaked by, thanks to a little online work, a stimulus check, and my birthday money.
Now - May. Finally, FINALLY, I got through to the unemployment office, and two months of unemployment backpay came through. I am so grateful - I feel like I can breathe again. I spent hours meticulously going through my budget and allotting money to the next few months of bills, basic expenses, etc., then decided to make some larger payments on my credit cards to knock down my interest rate a bit. I'm down to $700 on one card and $1250 on the other. Still have that $245 in medical debt, but that's not collecting interest, so it can wait a sec. I paid about $552 towards my cards this month, and I feel so, so much better. This is the first time in my life I've had a little bit of a cushion, but everything is so uncertain right now, especially with me still being out of work. We're being very cautious with this unemployment money - we are trying to, for the most part, budget as if we're still living on one paycheck plus my online work. But I feel comfortable making larger payments each month, and I feel so good about knocking out a little debt while building our savings!
Truck and Car payments were made as planned (minimums, until camper is paid). Camper was minimum + $2150. New camper balance: $17,975.50. True expenses are still being funded. Since May has 5 paychecks, we should be able to send a couple extra chunks to the loan balance in June. Based on my newfound risk aversion, those will probably be divided & sent on the 3rd & 17th, in case something happens.
Work update: The original retail freight is beyond on hold; that company has filed for bankruptcy. Time will tell whether we'll resume when they restructure. Third-party freight keeps us rolling. Our social isolation takes place at home as well as in the truck, although we did have a brief (one hour) visit this month with 3 of our 6 grandkids!
We have cute cloth masks (two layers of fabric, with an accordian fold) that we wear when delivering and while in truck stops. I'm in the "it's probably better than nothing" camp regarding masks.
MILESTONE CELEBRATION: The camper balance is under $18k! It's about a third of the original starting balance. Woo HOO!!!
Prayers that the virus will be stopped soon & forever.
So I got the gig, which is sooo amazing, as I just put another 3k on training (payments will be covered by business account - but until then, it means it's still me). So debt wise, I'm going to take advantage of all the stuff the banks are offering people - and see what money I can get back from them with interest payments especially on my LOC. My friend also convinced me to ask them to drop my interest rate - so I'll try that as well.
Paid $200 on my LOC, but my balance transfer it's getting hit badly. I haven't paid anything right now, but I'll be putting $1090 on it at the end of the month. I'm supposed to be putting $2543 😓. I need them to extend my 0% balance transfer period.
April Balance: $8,479.24
May Payments: $1,583.24
May End Balance: $6,896.00
Paid off one more loan this month. The balance left is for a personal loan which I wanted to finish paying off by August, but I shifted my priority to focus on adding more cushion to my emergency savings and investing in my 401k. After doing the math, I'll get a better return on investing at this point since the interest rate on my loan is super low. Definitely will be paid off by December though!
Need some advice. I started saving for a new to me car (only got $100) and just found out that my 13 yr old car (270,000k) won't pass MVI come August (no big surprise, but was hoping for another year or two). It is also leaking fluids and to replace the lines and do the repairs would be costly and the mechanic told me "not worth it". I currently have two debts I am paying off. One will be done in 8 years (472$/mth min) and the other in 2.5 yrs ($259/mth min), but probably sooner since I snowball and make extra payments when I can. I have been paying the minimum on them since the interest rates are low on them and been focusing on building an emergency fund and saving towards my true expenses. I have about $5000 in my emergency fund and about $2225 in a house fund (much needed repairs that have already been put to next year due to various reasons). Here are my options:
1. I can finance a small used car loan over long of a period, but my savings rate would decrease and the payments would be around $200 a month for 5 years.
2. Use my emergency fund and part of my house fund to pay off my loan that is 259/mth and then finance a new car at 0% interest for 7 years.
3. Use my emergency fund and buy a decent used car (2011-2012) with about 190,000 to 200,000k on it.
I really want to do number 3 as I don't want to take on any debt, but I am also nervous about not have any emergency savings. It has been suggested that I can probably get about 1000$ for my car and I just had to buy summer tires and my winter tires were from this past winter so probably get another $1000 from them. My family (who is not very money smart, but that is another story), want me to get a new car, but I don't feel comfortable with it. My AOM is around 30 days and by July I should have most of my true expenses covered for the year. I do need a car as my parents live about 3 hours away and transit where I live is limited.
Help! Any advice/insight is much appreciated.