I finally sat down and caught up on all my paperwork, including two quarters’ worth of accounting. I also took the opportunity to update my debt spreadsheet since I hadn’t had time to do it last month.
Here is a snapshot of my latest numbers (they are currently sorted in order of how they should be paid off, based on interest rate and balance):
The numbers don’t look good, but I didn’t expect them to. We incurred a number of expenses when we sold our house and moved, including a plumbing repair of nearly $600. And when we began renting, we had to put down the first month’s rent plus a deposit, which was like paying a double mortgage payment. These two extra expenses account almost 100% for the increase in our debt over the last month.
The good news is, we received over $10,000 from the sale of our home. We are currently using that money as a cushion, although I may use it to pay off a couple lines of credit this month.
If I leave the money in a savings account, it’s basically doing nothing but giving me warm fuzzy feelings. But if I use that same money to pay down debt, then it’s effectively saving me the 14.91% average interest I’m paying on my debt. Based on the numbers, it seems I should use the money to reduce our debt.
This should be the last time I post an increase in debt, assuming the birth of our third child is complication free (my wife was due yesterday). I intend to start paying off debt again starting this month. I had hoped this process would begin more quickly, but just as a massive ship turns slowly, it usually takes a few weeks to stop taking on debt and turn things around.