Jan 10, 2008

the payoff plan

reading this blog entry made me feel that i'm not alone in my impatience to pay off debt. i have to admit, it does eat me from time to time. though i feel that i have a form of control over it, i just wish that the next time i make a payment that they all disappear! for the next 4 or 5 years, there is a cash outflow going to debt. how do you just live with that?

the pay off plan
as mentioned in my previous post, i discussed with j about a plan i devised to pay off his student loans and to adjust our spending habits and budget. once i'm back from maternity leave and earning salary again (i will be on government subsidy for the entire 14 weeks of leave), we will be putting away $1,200 a month to debt - $600 to his monthly student loan payments using CC2, the other $600 distributed between CC1 and CC3. once CC1 is paid off, the full $600 goes into CC3 until it's all paid off. once both are paid, we will make the SL payments using CC3 and pay it off every month. i decided to do that so that i could see the reduction happening to CC2. once all of the plastics are zeroed-out, next to tackle are car loans and hire purchases. they should not take 6 months to get paid off as long as we don't miss our due payments. i'm still looking at it positively that all these pay offs would happen by end of this year. i also hope that while in the process of paying off the debts, our financial habits would be grooved accordingly.

putting away $1,200 a month to debt for maybe 5 years just makes my eyes roll. in the grand scheme of things, 5 years to pay off a student loan is a good thing. by then our baby will be 5 years old. maybe we could even celebrate our baby's birthday and being debt free at the same time. right now it just feels too far out, still in the tunnel without a light ahead of us. our plan to buy a property doesn't look promising in the next 3 years. i just don't feel comfortable getting a mortgage while we're paying for the SL. i also hope that we'll get good pay raises every year. that would certainly make paying debt a little less painful.

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