End of Month Update on Financial Situation
I finally completed updating my spreadsheet for the month of March. Some of the categories I am tracking are: Total Minimum Payments Due, Total Interest Paid, and Debt Snowball Balance.
The Total Minimum Payments Due is the bare minimum I would have to pay each month to avoid any late fees. This includes all my Mortgage, Car, Credit Cards, Utilities, Insurance- any bill that arrives that says you have to pay this much by this day.
When I started this spreadsheet in January the minimums added up to $3920. Last month the minimums added up to $3177. That’s a difference of $743 per month. When I was trying to pay $3920, I was coming up short and having to go further in debt to pay for other needs like food and gas. There was also a lot of borrowing from one account to pay another. Needless to say there wasn’t anything extra to pay down the debts. That $743 dollar difference makes it a lot easier to pay cash for everything and apply extra payments toward debt.
Total Interest Paid is just what it says: A total of how much of my payments are going just toward the interest. When I paid $3920 in January, $1642 of that just paid interest on my accounts! What a waste of money! Through refinancing and paying down debts, I reduced that amount to $1030 in February. It went back up to $1069 in March due to some balance transfer fees, but those transfers will lower interest for the next 12 months. I expect this number to be under $1000 from now on. The lower I get this number, the more my payments go toward principal instead interest and the quicker I get out of debt!
Debt Snowball Balance is how much I still owe on all my debts other than my mortgage. That number dropped from $36353 in February to $34676 in March thanks to some large payments my tax refund allowed me to make. I have updated my NCN Network pie chart in the right hand column with that amount and will continue to update that at the end of each month.
I wish I had started tracking all these numbers years ago. When you have to stare at them every few days, it keeps you focused on the goal. I used to just stuff the bills in a drawer until it came time to pay them. I had no idea what my total balances were or how much interest I was paying. It’s amazing how much progress you can make in just a few months of diligently paying off debt. All of a suddent it’s easy to make the minimums and then all you have to do is decide what to do with the extra money. That’s a lot more fun than trying to figure out where to get the amount you can’t pay!
