Taking Stock

This is a post about getting serious about paying off your debt. Last year at this time the lovely Mrs. Sneed bought a new Honda Pilot so that she could chauffeur the Sneedlets around in safety and style. It may strike you as a dopey reason to buy a $30,000 vehicle, but that was her reasoning. The Sneeds are partial to Hondas, the Pilot being our 4th, including the one we bought used from Grandpa Sneed last year when he could no longer drive. Hondas are reliable cars that provide years of service and don't cost much to maintain. Apart from scheduled maintenance we have had few problems with any of the cars. The lovely Mrs. Sneed put $15,000 down on the Pilot and financed $16,518. She set an objective to pay off the balance in 12 months. As of today she owes $1,040 and will pay that off in August. Not quite 12 months, but real close. In the past 12 months she has paid down $15,478 or about $1290 per month. In addition I try to lower our mortgage's principal balance by $1,000 per month. In the past 12 months I have paid $10,980 on our principal. This means that we have reduced our debt by $26,458 in the past 12 months, or $2205 per month. The lovely Mrs. Sneed and I are very fortunate that we have good jobs, that produce good incomes. Our take home pay for the last 12 months, after taxes, 401K contributions and expenses for health care has been $98,174 or about $8182 per month. That is a lot of money where we come from. More than 1 in 4 dollars we brought home went to pay off our debt. Our total debt stands at $78,263 as of today, including our mortgage. Beyond the $1040 owing on the Honda we have no consumer debt. We can be debt free easily in 3 years. It should be obvious that even plunking $2200 directly on the principal of our debt monthly still leaves us $5900 take home per month. I recognize that $5900 per month is a lot of money and is real easy to live on. But that is not the real point. There are tons of people making double or triple our salaries that are up to their eyeballs in debt. The real point is that when you get serious, you get out of debt. Lest you think we live an extravagant lifestyle, here is where our $5900 that was left each month went. 1. Housing costs for interest, taxes, utilities, repairs (principal payments were in the $2200 we already deducted) were 25% 2. Car expenses for fuel, repairs and insurance were 7% 3. Gifts to others 15% 4. Vacations and travel 8% 5. Household supplies and goods 13% 6. Eating 15% 7. Clothing 3% 8. Cash 14% I like to deal in cash so it is a big percentage of our spending. It was spent on the listed categories above but I am too lazy to track it. All our entertainment spending is from the cash category. Our savings are deducted from our paychecks before we take them home. We contributed about $19,000 to our 401K accounts in the past 12 months. This equals 15% of our gross salaries. Of course, our favorite Uncle Sam takes his bite. Our federal and state taxes accounted for a cool 24% of our gross income. Our 15% saving to our 401K plans saved us from sending the government an additional $3000. So that's where it went. Merle. Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong and sometimes just full of it. Tag: Daily Life Personal Finance Humor