Hot damn! What a great month December turned out to be for debt reduction!
Parent PLUS debt down: $11,927.59
Mortgage lowered: $214.99
Overall debt reduction: $12,142.58
Last month, I paid a whopping $12,652.05 toward the Parent Plus loans, reducing the balance by nearly $12k. Just look at that remaining balance on loan #2 – just over $1,000! And loan #3 is finally below $16k…hey, a win is a win!
Admittedly, December is my biggest month of spending with the holidays and 3 big birthdays. So. how did I manage to throw over $12k at my debt last month?
The key is I had a plan and I stuck to it.
All of my December holiday/birthday shopping comes from my extra mortgage payment. I pay my mortgage every fourth week on payday, and since there’s 26 paydays every year, I always end up with an extra mortgage payment in December. I certainly should use that extra payment toward the mortgage, however for years I’ve used it for my holiday shopping. Whether I save all year or I use that extra payment works out the same way. It’s just a method that’s worked for me for years. I’ll need to be careful this year, though…my mortgage payment went way down when I refinanced a few months ago. I’ll need to adjust my budget for Christmas now!
So, while my spending goes way up, I don’t lay out any additional money for the holidays.
Another blessing I receive every December is a gift from my parents of $10,000. Usually, I hang onto that check as long as possible as kind of an emergency fund for me. The first few years, when my finances were a mess, I used it mainly for car-related expenses. Last year, I didn’t cash the December 2016 check until May, but when I did I immediately used it toward a Parent Plus loan. This year, I didn’t hold onto it at all. I feel like I have my finances in shape enough to weather most storms. So, as soon as I received it, I deposited it and used it on Parent Plus loan #2. This was my plan all year long, and I nailed it.
Some might consider it “cheating” to receive this wonderful gift every year, and I get that. I am very blessed. But, as painful as it was to not invest it or take a wonderful vacation with it, I did the right thing by paying down my debt.
Other debt reduction posts:
November Debt Reduction
October Debt Reduction
The Death of Parent Plus Loan #1
September Debt Reduction
August Debt Reduction
July Debt Reduction
June Debt Reduction
May Debt Reduction
The Death of Parent Plus Loan #7
April Debt Reduction
August Debt Reduction