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 :)
March check in - $2244 - with my tax return I paid this much into my line of credit, and topped up my $1000 emergency fund. April so far is going well, as an RN I'm still getting paid my full salary while at the same time enjoying some Covid benefits from the Canadian government. I'm using this money to further pay down my debt. Car battery died yesterday so will have to budget for a new one this month. Momentum remains strong.....according to the debt thermometer I have paid of 47% of my debt!
April Check-In: Paid $600 to debt bringing total to almost$18,000 paid or 55%!! of goal. Also added $1000 to emergency fund and $1200 to a buffer fund (used for unexpected but anticipated expenses).
1) $500 to 2 credit cards (0% interest)-on track to pay off both in July
2) $100 to Parent Plus Loan (now not accruing interest due to Cares Act). I've only paid $675 of $11,000 planned for this loan, however I have paid all interest accrued and plan to ramp this up considerably in the last half of year.
In addition to Debt Smackdown, other goals will be $6000 to emergency fund this year, some extra money set aside for daughter's senior year college, and a small (but meaningful!) buffer fund for Christmas Holiday.
Stay safe everyone! May check-in should see us all a little closer to #flattenthecurve (which is the most important thing right now)!
April progress report on my battle against the student loan beast.
As of March 6, 2020: $212,955.93
As of April 9, 2020: $210,940.23
Notes: Regular monthly payment resulted in principal reduction of $1,215.70. Made extra principal payment of $800.00. Total reduction of principal in April: $2,015.70.
Year-end goal is to get the balance down $44,934.56 (from $224,934.56 starting place on January 1, 2020) to $180,000.00. With a $13,994.33 reduction so far this year, I'm now about 31.14% there.
I have been absent mostly for the last couple of months, and that is likely to continue a while longer. I missed two updates, so here are the figures now:
Personal Loan - Start $1000, payment $55, Balance $945 (WooHoo - I broke the 1K mark!)
CC (actual debt portion) - Start $320.37, payments $119.03, Balance $201.34 (I included the cashback payment to reduce the debt too!)
Joint Account - Start $962.51, change ^^ $484.14 :( , Balance $1446.65 (boo)
Personal Loan - start $945, payment $55, Balance $890 (woohoo, I broke the $900 mark)
CC (actual debt portion) - start $201.34, payments $16.13, Balance $185.21 (again, used the cashback to reduce in addition to the $10 I committed to)
Joint Account - start $1446.65, payments $236.22, Balance $1210.43
Essentially, although I've reduced two of my debts, the one that went up means that at the end of this period I actually owe $2.76 more than I did at the start *sigh*
Late March update - We had to cancel our trip so we redirected some of that money to debt repayment knowing we have a year to save again. So March total payment was $1742.31.
April check in - $113.44 total payments (minimum payments only)
We have decided to reduce payments to minimum payments only for now. Both debts are at 0% interest promotions until August and October so there is no interest cost to this decision. But because I don't know what is going to happen to husband's situation (it keeps changing as the government changes the rules and the support), we are piling up cash until then. But in YNAB we are budgeting the normal extra payments to a separate category called Extra debt payment and then if we don't have to touch it, we can throw it at the debt later.
Late March update - Credit card is COMPLETELY paid off but I am still using it for my purchases. I've put $1000 towards my personal loan so now it's at $9926.08. I've also managed to build up a small emergency fund of $1000 which gives me a moral boost to continue to tackle the remaining debt despite the whole pandemic we are facing.
Truck and Car payments were made as planned (minimums, until camper is paid). Camper was minimum + 800. New camper balance: $20.376.52. True expenses are still being funded.
Work update: Due to Covid-19, we've shifted from hauling retail freight to hauling essential freight for 3rd party shippers. Our social isolation takes place at home as well as in the truck. Our manager and dispatcher are both aware of our mileage goal for each week, and cooperation has happened all month.
MILESTONE CELEBRATION: The total of our balances has dropped from the $90,000-99,999 range to the $80,000-89,999 range. Woo HOO!!!
Prayers that the virus will be stopped soon & forever.
So I’m at 80% of paying off credit cards and furnace. I originally had car payoff in total but removed it because it was unrealistic. On Thursday I traded it in for a new car at zero percent interest. Car deals are pretty good right now. All done over the phone and then signing face to face with distancing and masks/gloves. Also refinanced my mortgage (down 1.2%). I’m feeling pretty good at hitting my goal right now.
Still paying my maximum minimum on my HELOC: $26K at 2.74% (no snowball on principal yet this year). It has been a tough on surviving a strike but I made it through without touching my EF and now I'm using this quarantine as an opportunity to save more money. Only groceries & wine. No gas, takeout, or online shopping. My paycheque is back to normal thankfully & I'm blessed to have a job when so many people are getting laid off. It's not easy working from home & a massive headache inducing learning curve.
Thoughts: use extra money to snowball my debt or add to my investments since equities are at the lowest they have been? I wasn't thinking a lot. I currently contribute $100/month to my RRSP but was thinking of also adding $100/month to my TFSA investments. I know the rule is to pay debt first, but these are unprecedented times and I'm ok with my budget. Ideally, I'd like to be a month ahead. :)
I refinanced my student loan to get a better interest rate and new payment isn't due until May 3. I paid $500 in March even though nothing was "due." Would have done more but I'd also just quit my job so I decided I should be prudent in case I didn't find anything new. Luckily I did find something and I start today (after 3 weeks off).
Haven’t updated in a few months what with personal and then COVID concerns. Overall, I started Jan/Feb aggressively paying down my debt, and then froze all extra payments to keep more in savings due to uncertainty in the economy. Here are the amounts I paid so far: $3,954.75 in Jan, $2,809.00 in Feb, and $464.00 in Mar (minimum payments).
Stay well, all!
Ya that sounds like this would happen at our house too.
we are still at least 10 years out from this idea. It’s something we’ll have to research more as we get closer. Thanks.
Orange Sun said:
And yes, I'm a financial adviser and still in a group to help me pay down debt. Just because you know what you should be doing doesn't make it easy!
I’m an accountant and I hear you. It’s sometimes feels embarrassing but then I think it makes me a better resource because I speak from experience. Yes it’s simple. No it’s not easy.
Here's the breakdown for April:
MC - $534.46 $61.00 $473.46
Total - $534.46 $61.00 $473.46
Really excited about that!!!!
I posted in my journal, but I'll just mention it here, too.
The stimulus payment just hit my account (looks like it will clear on Wednesday, which is also pay day, too!). I decided that I will move the amount that it takes to pay off my debt (plus my care credit debt, which I really don't consider to be debt since it's always interest free, and I have it every year due to buying a year's worth of contacts all at once), and pre fund those categories to be paid in full. I'll just continue to make the payments each month because they are both zero interest. I'm not going to pay back somebody who has loaned me money for free any faster than absolutely necessary.
What this DOES do for me is frees up about $110 in my budget every month that I'll get to apply where ever it is needed. That's like giving myself a $100 raise. I think I'm going to apply some of it to my truck loan to start paying that down a little faster, and then use the rest of it to fund things that I need (you know, like shampoo, the basics... 🙄) so that I can work on staying out of debt a little better. Then I'll be able to come back here next year and smackdown the truck loan! I'm going to go play with undebt.it and see what it tells me about applying a bit extra to my loan and see what happens.
I paid off the second of my two credit cards today. I hit 100% of my targeted debt goal for the spreadsheet.
Yet for some reason, I don't feel much better about the state of my finances. I got ahead in AOM to 32 and then replenishing what I needed to hunker at home sent me back to 21. I've been struggling with my food budget big time and I feel very YNAB poor - all my priorities are covered but I don't have a cent left to try and stretch things to get a full month ahead.
I'm hoping that once I don't have my CC debts to pay down I will find a bit of wiggle room in the next month or so. I still have some debt overall: mortgage, a family loan, and a phone installment plan. I was hoping to tackle the family loan and the phone plan next but as those are 0% interest I think I might just let those play out with the bare minimum payments for a while.
So to try and focus on a plan instead of my anxiety - next on my list then is to work on AOM, then once I get to around 60 I'll shift to savings. That might take the rest of the year, or longer - who knows.
I feel like the AOM metric can be a bit of a red herring
Peripherie I agree with MicroSpice . AOM is wonky if you are saving for big things. For example, we had about $10K in an account for university. High AOM. But then we paid the school and AOM drops back down. I believe the toolkit uses days buffered (not sure because I don't use the toolkit) that is apparently more of what people are looking for in AOM.
Well, I did pay down a little more debt in April. $500 to pay off another credit card. I am 60% of the way to my goal for the year. But a big chunk of that was a bonus received in March. Our income is cut back right now due to Covid-19. All of the basics are covered, but there is not much else to throw at debt. At least we are doing fine on all of the basics.
April Monthly Check In
- Construction Loan: Paid $2,550 - Balance $0!
- Medical Loan: Paid $100 - Balance $1,500
- #2 Medical Loan: Paid $200 - Balance $6,720
We received our stimulus check which allowed me to pay off the construction loan. Since we both still have our jobs and have reasonable savings I do not feel like I need to hoard a bunch of money at this time. I preferred getting rid of another monthly payment.
Total paid this month $2,850. $7,650 / $8,950 - 85% complete for the year!
But we added new medical debt. So I am going to go ahead and add that to my spreadsheet. An additional $6,920. Which brings our new total paid to:
Total paid this month $2,850. $7,650 / $15,870 - 48% complete for the year!
Even with adding the new debt we are still almost half way there and it's only April. That said the rest of the year will probably be slower progress since we put both our stimulus and tax return towards debt which accounted for a large chunk of the pay down.
I've been struggling with my food budget big time and I feel very YNAB poor - all my priorities are covered but I don't have a cent left to try and stretch things to get a full month ahead.
It is completely normal to feel YNAB poor! It is because you have given every dollar a job. But remember, you aren't poor. Money is sitting in other categories if you need it. It's just your priorities. I hear you though on the food budget and still wanting to get a month ahead... :)
Purple Foal said:
My accountant suggested to invest in my TFSA instead since my tax bracket will be similar when I retire & I'll get hit with the taxes when I withdrawal my RRSPs
Ha ha. That’s why I was asking about your job. I was going to give the same suggestion. Although it also depends on your spouse (if you have one-sorry can’t recall) since income splitting retirement income is allowed. The only downfall of that pls is if you don’t have a spouse before all the RRSPS are depleted. You may want to ask your accountant as I am not allowed to give tax advice.
April Check-In :
Have the personal loan principal down to $21701 so $529 total paid off to that this month. Credit cards are still at $0. Moving fund (which might just be renamed emergency fund...) I've been able to add $300 to as well.
I won't be getting the stimulus check. I'm just right over the cap on the amount as someone single. Can't complain though extra money would be nice, other people will need it more than me in these times. I'm still paying down debt, saving, and accounting for my priorities.
I'm just super grateful that I'm still working during all this, I'm healthy, and my family has stayed healthy. I'm worried about the toll the isolation is taking on my mom and grandma since people can't visit them really but grateful and blessed that everyone is still okay and able to keep their jobs, even if the environments have changed. That's all I've been focusing on though. I know there's so many people this is causing more disruption too, I can only be grateful for what I have and pray for everyone else affected.
This month is tough too because it was going to be my big 30th birthday extravaganza coming up and that's decidedly, completely cancelled. I'm treating myself to fancy yarn instead. I crochet which is an excellent hobby in these times since it is meditative and very inline with quarantine life. So upside, I'm going to get a really posh cardigan out of this. Looking at the silver lining and remembering that this will be over eventually and that trip can happen eventually too.
Sending out as many positive thoughts and prays as I can! And trying to keep my eyes on the prize, debt free life is the number one goal in the end for me and I've been sticking to $0 on credit cards and chipping away at the loans.
I am slowly paying down my debt (Student LOC and AMEX Loan), I have got about $56,000 left to pay which is not bad since I have almost $100,000 off in debt since I started this journey 6.5 years ago (I can't believe that I had that much student loan debt (about 116,000$)). Over the years I added on a car loan (sold the car at profit when I moved across country to take a job that paid less) and my AMEX Loan. I haven't included my mortgage in this amount since it is something that I can easily afford (~$500/mth accelerated weekly) and will focus on this once my loans are paid off.
BUT... while I am thankful that I can work from home and still have steady income, it has been over a 5 weeks since I was at my place of work (I was on vacation when this all hit), and I am finding it very hard not to buy things for myself or the house online. I also live by myself and family is not close by, so I am thankful for the time alone but it can also become very lonely too. So far I have been good and YNAB has been helping since I know if I buy something for the house, it comes off my house siding/window/patio fund..... How is everyone else coping with this crazy time??