Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.
Further below you’ll see my active debts in the Debt Report Table.
“How long should you try? Until.”
~ Jim Rohn
A few notes on the Table of Debts Slayed:
(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019.
(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.
(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off.
See the Debt Report Table below for the figures as of the end of March, 2020. It shows the updated order of debts to be repaid.
The difference between my February and March personal debt balance is $1,504. Typically, the month-to-month difference has been at least $2,000. This month, that wasn’t the case because of the COVID-19 pandemic. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. Under normal circumstances, I would have made an additional debt snowball payment that would increased my paydown amount by several hundred dollars.
A few notes about the Debt Report Table:
The Debt Being Attacked
The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional amounts appear as my “Debt Snowball” number in my budget every month.
Estimates
An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount.
Three Payments That (Unfortunately) Go Up Every Month
(1) Internal Revenue Service (2017)
This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.
(2 & 3) Navient Student Loans (Yes, Both!)
The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.
Business Debt
I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.
The difference between my February and March business debt balance is $500.
Up until recently, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.
What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.
COVID-19 Brings Uncertainty
The COVID-19 pandemic has shaken things up in unimaginable ways. Right now, staying healthy and sane are my primary concerns. I’ve utilized the grace offered by some of my creditors, relieving me of having to make payments in the upcoming months. I did that as a precautionary measure, while I evaluate my income. I need a second to think. I don’t expect my debt balance to go down significantly next month.