Yeah…Yeah…I know it has been an ENTIRE year since I last wrote on this blog. I have discovered that working on a Master’s degree requires A LOT of writing. My mental energy has been utilized elsewhere.
If you remember, in my Welcome 2014 post, I publicly posted a financial goal to pay off our HELOC in 2014. I did not mention an amount and I am sure you are dying to know if we did it or not…
WE DID IT!!!!
Our HELOC was approximately $34,000 and we finished paying it off THREE DAYS before 2014 ended.
Phew! That was a close one! Honestly, I did not think we would manage to get such a large sum paid off in 12 months. In 2011 when we eliminated our consumer debt it took us 18 months. When December rolled around, we still had over $5000 to pay and it was Christmastime.
How did we do it?
We decided to put off any extra expenses that we were planning.
We have lived in our house for 10 years so to say it needs a few repairs is an understatement. Originally, we planned on using our tax refund and any bonuses to fix issues in our kitchen, but we changed course and poured all of it into our HELOC.
We took any and all extra jobs.
My husband is an actor on the side and in his spare time he goes on a LOT of auditions. In 2014, he was blessed to have several jobs that brought in some extra cash. Normally we use his acting money to cover all his acting fees (headshots, acting classes, websites, etc.) first, then use the excess for family activities.
We used some of our savings.
I know…I know…this is a BIG Dave Ramsey no, no, but let me ‘splain.
According to Dave, when you are getting rid of debt, you need a minimum of $1000 emergency fund. We do not keep it in a “special” account because I already have several accounts and to have one just for $1000 just clutters my bank account list. When looking at the end of the year, we were able to pull some money from the account because we had money above our minimum $1000 emergency fund.
We applied unexpected income into the HELOC.
In addition to earned bonuses, tax refund, and acting income, we had a few unexpected earnings. My husband won an award for a competition at work. Also, his paycheck increased slightly because he paid the maximum to social security. Those extra bumps helped out a lot.
What is the financial goal for next year?
Now that our HELOC is paid off, you may think, “NOW you can fix up your kitchen, right?” Well, not quite. Unfortunately, we found out at the beginning of December that my husband’s company is eliminating an entire division and 900 people will be losing their jobs in the next few months, including my husband. Our tax refund and any bonuses will be put towards a fully-funded emergency fund, which is baby step #3.
I will say that if it were not for Financial Peace University and getting rid of our consumer debt in 2011 and now our HELOC, we would be in panic-mode. There is a bit of excitement in what the future holds because we can really evaluate what we want to do career-wise. We do not have to rush any decisions about what job to take because we are not a slave to debt. There is a freedom in choice that we would not have had if we had not gone through the pain of dumping our debt in the first place.
If you are in debt, my question to you is, what are you waiting for?
It took us six years to get out of debt (except our mortgage). If you start this year, in six years where will you be? In debt or out of it?