Debt Reduction, On Auto-Pilot

I don’t like to make resolutions. Yes, I need to lose weight, spend less, save more; I am setting goals. I set a goal to be debt free in 2014. I have a monthly roadmap of debt reduction to keep me focused on my goal. I had an extra paycheck in December and had a goal of making a third payment towards my credit card debt. Even with unexpected expenses—I achieved that goal. I was able to do it because I automated payments through my credit union. I don’t see the extra cash; it goes directly to debt reduction. My credit card debt will be eliminated by May of this year. I will then change my payroll deductions, add the former credit card payment to my mortgage and eliminate my mortgage early. One month after my mortgage is paid; my car loan will be paid in total. So why not pay the car first? My interest on my mortgage is low, the car even lower, and I can no longer itemize deductions on my tax return. So it is financially advantageous to eliminate the mortgage debt first.

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I have potential roadblocks. I need a new roof, siding and windows. The furnace, water heater and refrigerator are getting older. I would like to delay repair/replacement until I can pay cash, though that may not be possible. I have increased the automatic deduction to my emergency fund to save enough to pay cash, or at least reduce the amount I may need to borrow. Even if I have to borrow, I am in good shape. My credit score is increasing and well within the excellent range, so financing home improvements will be much less expensive than it would have been a year or more ago.

On the personal side, I now have two dogs in the house, so I have a goal of walking more to tire them. I have a goal of eating more fruits and vegetables. Hopefully, an added benefit of the walks and good food will be weight loss—but I want to make the walks and good food a habit, so that will be my focus. This should also reduce food costs from eating out and buying junk food.

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I have a goal of de-cluttering my home. As my kids moved out, I filled their space, so I am downsizing. My son and his spouse are buying a house. I have lots of antique furniture that is not being used. They will fly home and pick up furniture for their new home and drive it back to Washington. We all win.

I am losing paper. I handle my bills and act as my mother’s guardian. I am scanning documents and tossing paper. I filled my recycle container. My goal is to do that a few more times.

2012 is looking good! I just need to keep visualizing the end of the journey!

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Image: IvanClow, via Flickr.com

Tagged as: budgeting, Debt Diva, debt reduction

Chris Geoffrey Chris Geoffrey, a.k.a., The Debt Diva, was born into a very frugal and middle class family, spending most of her life in a really small Iowa town. A graduate of Iowa State University, she has worked for the public sector for 34 years. She got into debt, and then she decided to pay it down, once and for all.