Sunday, January 12, 2014

Less stuff, fewer loans

After writing yesterday's post I went to update the "adding it up" section that I keep on the right-hand side of this blog. Since I started this blog, I've written about discarding 203 items. I've surely declutterd more but haven't had time to write about every single little one. I'm thrilled that so many of you have been interested in watching me throw out 203 things!

I also added up the amount of money I wasted on those things. Right now the total stands at $2384. I'm sure this number is higher because of all of the items that I've tossed but never gotten around to blogging about. 

2014 is going to be a big year for us. This will hopefully be our final year without children. Because of that I want to be as financially ready as possible (though most of my friends say that hardly anyone will ever be or feel financially ready enough for kids.) I realized that I'm less than $8000 away from having my final student loan paid off. Had I not wasted money on so much junk I could be quite closer to being done with that loan. 

We have two outstanding non-home loans: my student loan (2.65%) and the loan we took out for the kitchen (1.99%). With rates this low most people would say, "pay the minimum and instead invest!" So I would pay the loans' minimums and save the money for 'investing.' Which usually meant keeping it in my bank account and buying stupid things with it.

But I want to stop having so many bills to pay each month before I start having to pay for visits to the pediatrician. We also don't have an emergency fund. We have substantial savings but all of it is locked up in retirement accounts. I used to consider that our "emergency fund," but no longer. It's time to start paying back at least some of those loans. It's time our money went to the proper places.

This year as part of blogging I plan to start putting any money I make from decluttering or other side-hustle activities towards the student loan and kitchen loan and towards a $20,000 emergency fund. At some point I also want to try an experiment -- what if I went a week or a month buying only things I absolutely needed and then totaled up my 'wants' and put that money towards a loan? Can I stop putting my money towards stuff and start putting it towards "us"?

Here's where we stand.

Emergency fund
goal: end of year
Kitchen Loan (1.99%)
due in Oct 2014 
Student Loan (2.65%)
goal: end of year
As of 1/7/14: $0
Starting balance: $0

**$0 saved so far**

0% filled
$0 $20,000

Starting balance: $10,000.00
Balance on 1/7/2014: $8461.80 

**1538.20 paid so far**

15.4% paid off
$0 $10,000

Starting balance: $8,127.00
Balance on 1/7/2014: $7983.83

**$143.17 paid so far**

1.7% paid off
$0 $8,127
Get a progress bar at

Because of that I've started a new page that you can see in the menu: Less Stuff, Fewer Loans. My goal is to pay off the $10,000 kitchen loan, the $8,000 student loan, and fill up a $20,000 emergency fund by the end of the year. I'll definitely have to cut down on buying useless junk, but that's the name of this game, isn't it? If our money is going to those things before anything else how can it go to junk?

So my question for you folks, is what order do we do it in? Do we go for the loan which is due first? Do we start with the emergency fund? Do we work on all three? Your thoughts are much appreciated. 


  1. Hi Zoe,

    I love your project! Your goal involves putting $36,000 toward these loans/funds in one year. That's around 3k per month. If that's feasible for you, wonderful! If that's the case, I would pay off the kitchen first, since it has a due date that's not too far off. Then I think I would start alternating, roughly equal amounts, between student loan payments and emergency fund infusion. UNLESS, of course, your emergency fund is somewhere that is earning more than 2.65% -- then I would pay only the minimums on the student loan and put the rest into the emergency fund. Good luck and thanks for the shot of incentive toward my own financial goals for the year...

    1. Sue, thanks for stopping by! You had an excellent idea to figure out the average cost per month to achieve the goal. I agree with you that the kitchen loan is the one to deal with first, and then alter amounts between the two. Thank you for your suggestion!

  2. You can do it! Seriously, once I stopped really shopping, it's now a big treat when I spend money on something other than food, pet stuff, or toiletries/household goods. I know it will feel weird at first, but trust me, it gets much, much easier (and this from a person who can be found at many thrift stores throughout the week and leaves with nothing most times). :)

    1. yes it does feel very weird! I'm very impressed that you can go into thrift stores many times in a week and come out with pretty much nothing. Quite jealous!

  3. I think I'd go for paying off the kitchen loan first, and then the others. I think, personally, I would want to get rid of all of the debt first. (But having some emergency fund saved would be reassuring!)

    1. Yes, I agree, the kitchen loan goes first. Then I think we'll alternate payments between building the emergency fund and paying off the student loan, but going heavy into paying off the student loan.

  4. Take a look at Dave Ramsey's Debt Snowball plan: He says start with $1000 emergency fund while paying only minimums to the other debts, then hit your first payoff goal while making min payments, etc.He suggests smallest first, but your balances are practically the same. Dave Ramsey's Money Makeover has helped a lot of our friends get out of debt - hubby and I have paid off our house too!

    1. Thank you for sending the link! I absolutely agree that the little wins are important to have first because then I'm more likely to stick with the program. Since the balances are about the same, we've made the most progress on the kitchen loan so that seems the best place to start. I'll get Dave's book as soon as I finish the book I'm reading. Thank you again.


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