Update On Debts

Well, we have been plugging along for just about one year now since we found Dave Ramsey and began our journey in February of 2007.

When we started we had $44,000 in debt, not including our home mortgage.

Currently our total debt is $29,992, not including our home mortgage. So, a little over $14,000 paid off in one year. Even though if you include the interest we paid it was more than $14,000 - it still seems like we should have been able to pay more (since my husband is lucky enough to earn a six figure salary). I listen to the Dave Ramsey radio show and some of the stories from the callers are just amazing. People with significantly smaller salaries have been able to pay off significantly more money in one year. I think we need to get more "gazelle"!

Our last two debts are:
Credit Card: $3,575
HELOQ: $26,417

The credit card should be paid off by May. Then we'll just have the HELOQ to worry about.

If we continue with our current snowball amount of $1,100 it will take us until August 2010 to pay off the HELOQ. We should really be able to do it much faster.

If we could raise our snowball amount to $2,100 (which is what I had originally planned when my husband got a big raise a few months ago) we could have it paid off by March 2009.

The problem is that we have some expenses that will need to be dealt with along the way, and it seems these are in effect lowering the snowball amount from the $2,100 back down to $1,100. Here are the upcoming expenses:

- Braces for DD1, estimate: $3,000+ (out of pocket)
- Sister possibly having a destination (Caribbean) wedding this year, estimate: $3,500+
- New furnace/heating system to buy this summer, estimate: $4,200+

We need to complete our tax return and see how much we'll be getting back. And I guess we'll be getting the tax stimulus money, so these things could help.

I would really like to be debt free within the next year. And I think we can do it if we really put our minds to it!

One other possibility is that we might refinance our home mortgage. We currently have 15 years left on our 20 year mortgage. If we refinance we'll go with a 15 year mortgage so the term will be the same. We'll see what interest rate do over the next few weeks.

Oh, just thought of this - if we refinance the mortgage I think we'll need to pay off the HELOQ or roll that debt into the refinanced mortgage. Even though this is really just transferring the debt and spreading the payments out over 15 years, this might be a way that we could move forward to saving up our Fully Funded Emergency Fund of six months of living expenses. This is very appealing to me as I definitely feel a lack of security in not having significant savings. And we need to get started seriously saving for the girls for college. The oldest will start in just 7 years!

Refinancing is sounding better and better. Am I looking at this the right way?