2011 Debt Reduction Challenge - Discussion

**monkeywrangler71** · 01-05-2011, 04:31 PM

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.

**Greebo** · 01-05-2011, 04:34 PM

$500,000 was a good goal - but I think this year can be better. How about $600,000?

**Maine Girl** · 01-05-2011, 05:18 PM

I am in again this year..ready for another year.

**StanleyJohnson** · 01-05-2011, 06:29 PM

I had to replace the car, so it looks like I'll be participating also.

**qsaver704** · 01-05-2011, 11:34 PM

Originally Posted by StanleyJohnson

I had to replace the car, so it looks like I'll be participating also.

Oh, so sad! I was really looking forward to seeing you say you were done! Hopefully it will be gone soon!

**qsaver704** · 01-05-2011, 11:37 PM

I am in for a while at least. I was able to get down to my mortgage only last year, then we got pregnant. We have been paying as much as possible on the doctor bills, but even with a small sinking fund we started as soon as we found out (bills took about 2 to 3 months to start coming in) we couldn't pay it all back yet. We probably owe less than $700 to prenatal doctors and then will owe $3000-$4000 for the c-section and hospital stay in Feb. AFTER THAT I would love to start adding extra to the mortgage.

**Mamaw** · 01-05-2011, 11:50 PM

I would like to participate as well. Last year I did horrible about posting but I "think" I have a better spreadsheet to be able to report debt reduction principle and interest......bear with me as I struggle with it a bit longer. It does feel awfully good to see the principle get paid but awfully bad to realize how much that interest costs me!

**HeatSeeker** · 01-06-2011, 02:18 AM

I'm in. Wanna get these student loans down so I can purchase a nice home by 25

**mopples** · 01-06-2011, 03:25 AM

Im in

Ill post my amounts on the day that interest is charged that way i can post both the monthly payment and the interest charged.

**StanleyJohnson** · 01-06-2011, 07:34 AM

Originally Posted by qsaver704

Oh, so sad! I was really looking forward to seeing you say you were done! Hopefully it will be gone soon!

Don't feel bad for us. Our new car will carry a warranty, so we won't have to deal with expensive repairs for a while.
Did I mention 40 mpg? :-)

**qsaver704** · 01-07-2011, 11:11 PM

I wanted to post a payment, but according to the rules, this is a bill you can't pay off in a month. This was the bill for the bi weekly dr. visits due to pregnancy. I only owed $44.10 so I paid it off, no carry over balance.

**mopples** · 01-08-2011, 02:54 AM

Well my debt just increased....my computer started dying this morning so off we went to get a new one. All the major stores had 40 months interest free, so I now have an extra $1670 of debt to pay, but at least its interest free until 2014. The computer itself was only $1200, but it was a min spend of $1600 so we got some much needed new pilliows and manchester.

**tnthriftylady** · 01-08-2011, 07:12 AM

Okay, so I want to do this. The discussion takes place here, and you post your only your debt, the amount you paid on principal, and the amount paid for interest in the other threat - what, on a monthly basis? Do I understand correctly? I'll have to get DH to look at our spreadsheet and tell me where we are as of today.