Hello everyone, January is in the books now and it’s to time to hold myself accountable. We’ve continued to shrink our snowball and grow our net worth. Not as much progress as I would like but we did break into the $70,000′s for our debt. Considering we started with over $100,000 I’m happy about the milestone. I just completed my taxes last night and will be receiving a refund. Of course that will be applied to the snowball. Next month you will see some huge gains.
Net Worth Snapshot:
Emergency Fund: Holding at $1,000. Using the 75-25 plan from Matt Jabs, this number will start to increase in the coming months to $2,000. I just don’t feel $1,000 is enough. Now that our plan is working, it’s time to protect ourselves with a little extra added to the Emergency Fund.
401K: Not a good month for the old 401K. We are now contributing 4% and getting a match on that from my employer. We are receiving a raise today, so as my base income goes up so will the amount contributed, this is a good thing. We also have the 401K loan repayments going in here as well.
Car: Lost a little on the KBB value, oh well at least it’s paid for 
.
House: This will remain the same until June 2010.
Snowball: Good news here, another snowball has been melted (think The Wicked Witch). We are now down to six debts left to melt. The 2nd mortgage is now my prime target. I know it’s at the bottom of my snowball and Dave Ramsey might not agree, but I will be saving a bit on interest by doing this. We also want to move in the next two years, and having the 2nd mortgage gone will free up some options for us. Paying down debt is completely a personal choice and this choice fits great into our master plan
Good luck everyone!!! Only 11 more months to kick some major tail in 2010.
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Article by Jeff Kosola
DeliverAwayDebt is designed to help people along the journey toward "Debt Freedom". I use my battle against debt to demonstrate anyone with enough passion and motivation can blast away debt. My net worth is updated monthly and all my Pizza Delivery earnings are tracked. These are posted to demonstrate that YOU CAN eliminate your own debt. It will take some work, but nothing in life that matters is easy.
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{ 17 comments… read them below or add one }
I really like your site. It gives hope to the rest of us. I started on my journey about 6 months ago and our net worths look very similar. Right now, we are at the point of trying to get extra income and I told my wife that pizza delivery would be next. The only problem we have is that we both drive gas-guzzling vehicles. But that may be remedied soon. But, anyway… Keep up the good work. There are a lot of plans out there. it’s just good to see one in action and not just on paper.
Toma Walker´s last blog ..Playing to Win or Just Plain Playing?
Thank you for the kind words Toma. You should go get a delivery job! I started delivering in a leased H3 Hummer. I know all about the gas guzzling part of the equation. Don’t focus on the gas, focus on the extra income. Even if you have to pay a little in gas the money you make will be well worth it. Using my own experiance and that of other drivers, you can easily make at least $16 per hour delivering. Home depot and Lowe’s can’t beat that, and McDonald’s sure as hell can’t either.
Just keep going…spend less than you earn…earn more money….and blast that debt away. (oh yeah, that extra money had better go to the debt!)
Jeff
Great progress, Jeff! I wish I was snowballing the rate your are going at! Keep it up.
Money Funk´s last blog ..Menu Plan Monday
Thank Money Funk,
I’m going to start offering “Learn to be a Pizza Delivery Person” lessons. I’ll put your family down for a free lesson.
Jeff
Nice work Jeff… although many think you are doing yourself a disservice by taking away from your debt payments, you are building security according to the needs of your family.
This will always be different for each of us, but boy – I have a hard time thinking that $1,000 would be enough security for anyone! Plus… I HATE the idea of not paying myself at least something – that 25% goes a long way toward building security while the 75% goes a long way toward shredding bondage!
Matt Jabs´s last blog ..Free TurboTax – Free Returns, Free eFile, and Free Tax Help
If I don’t pay myself a little bit, or save for something other than debt I’d probably go crazy. That’s why I like the 75/25 plan so much. You can still pay down the debt plus give the family something to look forward to (a vacation fund, new used car fund, etc..) which by the way will crub any erge to splurge.
Exactly man… if it were just me I would feel comfortable with whatever amount, but my wife REALLY wants to have at least one month’s worth of expenses saved ASAP (we’re really close.)
Also, we agree that building your savings while still maintaining aggressive debt repayment is a no brainer. To each his own though. I think DRs plan is better suited to someone with like $10,000 in debt… but when it’s gonna take like 2-5 years to get rid of there needs to be a transition to a better alternative – hence 75/25.
Matt Jabs´s last blog ..Free TurboTax – Free Returns, Free eFile, and Free Tax Help
That hardest part about getting out of debt is realizing that it will take time and sacrifice. DR shows us how to change our behavior. Once you start on the path and your behavior is modified, it just becomes a numbers game. I know I’m not going back into debt. I know how to work my tail off to eliminate it. After those thing are figured out, the normal smallest to largest snowball doesn’t quite matter anymore. We’ve got some easy wins that have showed us how to work the process. It now becomes, what is the best way for our families to finish the process. For me, it’s about building a little extra cushion and paying that 2nd mortgage off (my largest debt). DR has shown me the light, I’m just choosing the next tunnel over
Oh yeah, that tunnel has Kool-aid too…
Way to kill it Jeff that’s some good progress right there. As someone just recently hitting debt freedom it is so worth the effort to bust it. Myself I followed the D.R. plan to the tee but as I told Matt I’m a rule follower and that $1000 covered us but if the Spousal Unit is not happy then the plan changes, simple as that. Have you considered dropping your 401k contributions while you are focusing? Seems to me you’re working your tail off by day and night and that extra 4% would help you get there that much faster to be back with your family. No right or wrong way just some thoughts.
Paul @ FiscalGeek´s last blog ..A New Way to Save When Grocery Shopping
I’m glad it’s worth it. You and your wife KNOCKED DEBT OUT OF THAT PARK. I so very happy for you.
I ran a bunch of numbers on the 401K choice. I’m trying to look long term and work short term. Since my company just started matching us again, I didn’t want to loose the long term benefits of adding to the 401K. When I started the plan I went to zero on the contributions and it did give me a small kick in income. Since then my wife and choose to start again, while looking 20 years down the road. Yeah is sucks right now, but I’m willing to hustle a little bit more to get there.
So what’s next Paul? Did you loose any purpose once the debt was paid, or has it turned you into a money saving net worth building machine??
There simply isn’t much of an argument against free money especially if you are focused. It’s funny but at least in my case, the very traits that lead me to get in debt in the first place I was able to use for good to dig myself out quickly. Funny how that works.
As to what’s next, we are busting our emergency fund, and it feels sooooo good to be able to shovel that money into a pile rather into the furnace. No purpose lost at all, rather my new focus is to get out of my current job and be running my own show. So if anything we have the same if not more focus. I’ve been able to use my side gig money to pay for our tickets to the Olympics which I’m really stoked about and I just got a new pair of ski’s. The Kung Fuja’s. We are focused and it’s cool because my wife keeps asking me when I think we’ll be able to pay off the house. From here on out we’re building our net worth and I love it.
Great job on your own for what it’s worth I’m proud to see how hard you are working at it. You’re inspiration in your own right.
Paul @ FiscalGeek´s last blog ..A New Way to Save When Grocery Shopping
Awesome stuff…. I am starting from scratch as I just put my debts into a debt management plan so need to establish an emergency fund and then can look at other savings options from there.
Forest´s last blog ..9 Ideas To Stay At Home On Saturday Night
Good luck with the debt management plan. I’d love to know how it works out, keep me posted.
Thanks, will do.
Forest´s last blog ..9 Ideas To Stay At Home On Saturday Night
That’s a nice dent you put in this month, very nice. I look forward to seeing your millionaire list soon and appreciate the compliment on my site!
Ryan @ Planting Dollars´s last blog ..The Part Time Job Search
Thanks Ryan,
Yeah, work has me slammed so the post will be up later
Thanks for the graphic outline. It sounds like you’re off to a good start. One of the best things that I like about the site is that you said it will help others to avoid making the same mistakes that you did. Too often people don’t like to discuss their financial issues/concerns openly. This is an excellent resource that I will share with others. Good luck.
Lillie´s last blog ..Looking for good financial advice on a budget?