Debt Payoff Progress for April 2013

dead endI had every intention of making April better than March in regards to debt payoff, and in reality, it is not as bad as it seems.  But the debt that I report here didn’t even decrease.  I had hoped to drop below the psychological $200,000 mark.

However, the reality is that we did make some progress on the commercial building as well as in other areas.  Our total liabilities decreased by just over $1200 and I didn’t include the payments that we made on the building or other real estate.  And with the stock market on a tear, the mutual funds in my retirement accounts really added to our assets improving net worth even further.  I am close to my net worth goal for the year, but I realize that the market can easily go down which is why I want to focus on paying off debt to improve our net worth.


Here are the monthly results:

February 1, 2013:  $204,682.21

March 1, 2013:  $202,074.40

April 1, 2013:  $200,241.22

May 1, 2013:  $201,650.44


Now part of that number is represented by “new debt”.  I say that because my wife and I are doing some much needed work on the house.  The intention is to cash flow the work, but since there was a sale going on at Lowe’s, we decided to put the purchase on a credit card since it was something that needed to be done anyway.  I had some bonus money coming at the end of April so the purchase was recorded as of May 1st while the cash was just getting into the bank.

We have a set budget for the work that we want to be done and the cash is sitting in an account and available to pay the bills as they come due.  That’s why I think that ultimately, we will see a little bit more progress as we head through the summer.

Unfortunately, this seems like such a long process to me, but I have 32 more months to go.

Speed Bump on Debt Payoff

dead endOf course, it is inevitable.  Anytime you want to make progress on something, whether schooling, a home improvement project, or debt payoff, you will run across a speed bump that slows you down or may even knock you off course.  I am not sure how this will affect me, but I do know that it has the potential to be a major issue.  However, it is still my goal to have all that consumer debt I outlined paid off totally by February 2016 at the very latest.

The Problem

In 2008, just before Lehman Brothers went bankrupt and the economy imploded, a friend and I purchased some land for the purpose of building a small building to hold his business with some extra room for a tenant or two.  It turns out that he had to occupy 65% of the building for the loans from the Small Business Administration.  So that is what happened.

Unfortunately with the economy the way it has been, the other portion of the building is sitting empty still and his business has struggled somewhat this past year with decreased sales.  Add to that his own poor personal decisions and the time has come for me to take over the building completely.  I will be decreasing his rent for 2 years in exchange for a portion of his business as well.

But, it will put a damper on the payback of my debt.  It would be nice to say that I should walk away, but I am personally (as is he) liable for the loans so that isn’t the smartest first plan of attack.  Also considering that I do have some capital already invested and it would be quite a major hit to take.

Monthly Budget

It will make the monthly budget tight again to take over full responsibility of the building expenses.  But I do think that the business has the potential to turn around.  It already made some progress in January and February is looking better as well.  In the meantime, I will have to be watching every penny and probably slow down the debt payoff schedule for the next few months until I get a better sense of the cash that will be needed.

Life has the potential to constantly knock you down, but you can either stay down or get up and forge ahead.  I will be forging ahead but in a slightly different direction.  Still, my total debt balance will continue to decline.  Plus, I get to interact with some new bankers and learn more about commercial real estate.

There is always a silver lining to those speed bumps.

Welcome to Shredding Debt!

welcomeWelcome to Shredding Debt.  This is my newest blog about finally getting sick and tired of being in debt and wanting to do something about it.  I have carried debt for a long time, but now that I am getting older am starting to realize that spending much of my hard earned cash paying someone else just isn’t fun.

I have a decent lifestyle so now is the time to prepare for retirement and the first step in that process is to get out of debt totally.  Unfortunately, it will take me several years as I have quite a bit of debt.  But I am working on a 10 year plan to see if I can become debt free in the next decade.  Then I can have the financial flexibility to decide exactly how to proceed.

The first step is going to involve paying off $435,000 in 40 months.  This is a lot of consumer type, unsecured, depreciating asset debt that eats up too much of the budget.  There was also some tax debt in this total at the beginning.  I started this step in October, so that means I am 4 months into this phase of getting out of debt.  You will be able to follow my progress right here on this blog.

With my first post, I will recap what I have done over the past 4 months to get to this point.  In the meantime, welcome to shredding debt.  Feel free to share your stories about getting out of debt.