Welcome to the 2011 Debt Reduction Challenge!
This is the official discussion thread for the 2011 Debt Reduction Challenge. Any comments or questions about the 2011 Debt Reduction Challenge should be posted in this thread. Discussion posts made to the 2011 Debt Reduction Challenge - Totals thread will be moved to this thread.
Please post your totals in the totals thread. Totals posted in the discussion thread WILL NOT BE COUNTED.
For reference purposes, the discussion thread for the previous year is located here.
Challenge Rules
Debt
A debt is defined as:
1. A formal agreement between a borrower and a lender; or
2. A balance owed for a transaction which could not be paid for in full at the time of the transaction or within the normal terms of the transaction.
So that means a formal loan - credit card, mortgage, car, whatever, or a bill that you couldn't pay when it came due and is thus eligible to go to collections, whether or not it has actually done so.
Valid Debts
1. Any debt already existing as of January 1, 2010 at 12:01 AM; or
2. Any debt accrued in 2010 that has been owing for more than 30 days.
This means if you charge something on a credit card and pay it off that month, it doesn't count - you're just using the CC as a substitute for cash temporarily. This also means your regular utility bills, and other monthly expenses do not count.
New Debt
Any new debt taken on by members participating in the challenge should be posted here. This new debt will reduce our debt reduction total. We cannot force you to tell us if you've added new debt, but within the challenge threads, no criticism of those adding debt will be allowed.
Qualifying Amounts
1. Principal reduction.
2. Interest paid.
Principal reduction is what really matters. When you have debt, interest is based upon the principal. If your bill is $100 and your principal portion is $30, the $70 in interest was accumulated in that statement period. Since that $70 is recent debt, it doesn't qualify as real debt reduction.
The amount of interest paid *will* be tracked - but the reason for tracking that amount is not to qualify as "debt reduction" but to show just how much money Frugal Village is throwing down the drain every year in new interest accumulated.
This is the official discussion thread for the 2011 Debt Reduction Challenge. Any comments or questions about the 2011 Debt Reduction Challenge should be posted in this thread. Discussion posts made to the 2011 Debt Reduction Challenge - Totals thread will be moved to this thread.
Please post your totals in the totals thread. Totals posted in the discussion thread WILL NOT BE COUNTED.
For reference purposes, the discussion thread for the previous year is located here.
Challenge Rules
Debt
A debt is defined as:
1. A formal agreement between a borrower and a lender; or
2. A balance owed for a transaction which could not be paid for in full at the time of the transaction or within the normal terms of the transaction.
So that means a formal loan - credit card, mortgage, car, whatever, or a bill that you couldn't pay when it came due and is thus eligible to go to collections, whether or not it has actually done so.
Valid Debts
1. Any debt already existing as of January 1, 2010 at 12:01 AM; or
2. Any debt accrued in 2010 that has been owing for more than 30 days.
This means if you charge something on a credit card and pay it off that month, it doesn't count - you're just using the CC as a substitute for cash temporarily. This also means your regular utility bills, and other monthly expenses do not count.
New Debt
Any new debt taken on by members participating in the challenge should be posted here. This new debt will reduce our debt reduction total. We cannot force you to tell us if you've added new debt, but within the challenge threads, no criticism of those adding debt will be allowed.
Qualifying Amounts
1. Principal reduction.
2. Interest paid.
Principal reduction is what really matters. When you have debt, interest is based upon the principal. If your bill is $100 and your principal portion is $30, the $70 in interest was accumulated in that statement period. Since that $70 is recent debt, it doesn't qualify as real debt reduction.
The amount of interest paid *will* be tracked - but the reason for tracking that amount is not to qualify as "debt reduction" but to show just how much money Frugal Village is throwing down the drain every year in new interest accumulated.