Catching Up…

It’s been quite a while since I posted to this blog — two months, actually.

There are a variety of reasons: we moved in May, business has kept me exceptionally busy, and after writing this blog weekly for a year and a half, I think I needed a break.

The break has been good, but because of my silence, I’ve got a lot to catch you up on.

We Bought Furniture

In a previous post, I asked for your input on what kind of furniture we should get. We ended up buying high-end furniture for our bedroom, and some mid-level furniture for the office.

The office furniture is 100% paid for. The bedroom furniture is partially paid for; we financed the balance on a 12-month no-interest loan.

I know… debt went up a little bit (as will be reflected in my August update)… but we had to get furniture. And I preferred to buy something that would last for years.

We Sold Our 2nd Car

After eight and a half years, we sold our Hyundai Elantra with the idea we would replace it with something nicer.

Of course, if we buy another car, that will increase our debt. So I’m a bit torn as to what to do.

Stay tuned.

We’ve Continued to Pay Down Debt

Here are our debt numbers from June and July.

Debt Reduction July 2009

So total debt is well under $30,000 — and credit card debt is well under $10,000.

As I mentioned, our debt has gone up with our funiture purchase, and that will be added in next month.

Outstanding Debt as of May 2009

Back in November of 2007, I owed a whopping $75,286 in debt. And as of today, I owe $30,094.

If my math is correct, that means I’ve paid off $45,192 — 60% of my total outstanding debt — in 18 months.

Depending on what happens the rest of this year, I suppose it’s possible we could be completely out of debt by the beginning of 2010.

At least, that’s the goal.

Here are my latest numbers showing my debt reduction progress during the last month.

Debt Reduction Progress May 2009
Debt Reduction Progress May 2009

The biggest change from last month to this month is that I paid off our Prosper loan, which frees up $287 a month in cash flow.

That’s what I love about paying off debt… each balance you pay off reduces your monthly obligations… which just makes life easier.

Anyway, that’s all for now.

Buying Furniture: Need Your Advice

It’s been nearly a decade since I shopped for furniture. And in this post, I’ll be sharing my current perspective and asking you for feedback.

Here’s the story…

On May 2, I moved into a new house. We’re renting it, just like we rented the last one, although this one is a little nicer and more expensive.

In the last house, I used the landlord’s office furniture. I don’t have any of my own. Plus, before we moved, we sold our bedroom furniture (to save the hassle of moving it, and because after 10 years we would like something new/different).

Bottom line: We need bedroom and office furniture, and we’ve been exploring our options.

After researching Craig’s LIst and visiting a few furniture stores, it’s clear there are three different approaches we can take.

Approach #1

  • Buy cheap used furniture even if we don’t like it. (Most of the stuff on Craig’s List is ugly, in my humble opinion. Good stuff is hard to find.)

Approach #2

  • Buy cheap new furniture. (Poor quality furniture at an attractive price.)

Approach #3

  • Buy expensive new furniture. (Built to last with a price to match.)

I suppose each approach has its merits. My natural inclination is to buy something that’s going to last for a long time and hold its value better… something I could give my kids if/when I’m gone.

The only trouble with this approach is the cost. Of course, if you amortize it over the lifetime of the furniture, it’s probably not worth worrying about. But if we go this route, we have to pay for the furniture now — or finance it.

And financing furniture doesn’t really fit in with the goal of becoming debt free.

If there is zero-percent financing (as there often is with furniture purchases), then I might consider partial financing just to spread the cost over 3-6 months.

Unfortunately, with my business, I need furniture now, not later. Same thing with the bedroom. My wife will only tolerate our clothes being piled on the floor for so many weeks.

Ideally, all large purchases would be paid for with cash. And if we didn’t have the cash, we would simply save until we did.

But given the urgency of needing furniture, it’s hard to make a case for waiting. Which then brings us back to the question: Do we go cheap/used, cheap/new, or expensive/new?

What are your thoughts? Leave a comment and let me know…

Prosper Loan Paid Off!

I’ve been super-busy with moving into a new house, writing copy, and managing clients, but I wanted to write this quick post to let you know I paid off my Prosper loan.

In fact, paid it off just a few days after my last debt update.

After reviewing my payment history, I discovered I had the loan for just one year and one month. I got the loan in March 2008 and paid it off in April 2009.

With this balance paid off, I’ll have only two outstanding loans left: the USAA credit card and our Honda minivan loan.

I’ll post another update in 10 days or so. Stay tuned!

Outstanding Debt as of April 2009

I just cut a check in the amount of $5,431 and dropped it in the mail yesterday. It’s my final payment to the IRS for 2008 income taxes.

With that burden off my back, I’ll be able to press forward with paying off my debt more aggressively. It seems I always make the most progress in late spring and summer because that’s when I feel I have no obligations to the IRS.

In fall, I’m holding back in preparation for paying taxes. In winter and early spring, I’m paying those taxes.

So with that in mind, here are my latest debt numbers…

Ryan's Debt Reduction Progress April 2009

Ryan's Debt Reduction Progress April 2009

Since November 2007, I’ve paid off $41,620, which represents 55% of the total amount of debt I owed.

I’m more than halfway there! Only 45% left to pay off and I’ll be debt free.

My plan is to pay off my Prosper loan in the next 30-60 days. That will leave me with only two loan balances left: my USAA credit card and my Honda minivan loan.

Part of me wonders which of these last two I should pay off first. The USAA card is a higher interest rate. But if I could knock out the van loan, that would free up nearly $600 a month in cash flow — about six times more cash flow ($100 a month vs. $600) for paying off twice as much ($10K vs. $20K).

Anyway, I’m still thinking about that. If you have any suggestions, please let me know.