But first let me address this order of business…
February Half.com Sales – $92.98 (sold 4 books)
My first rebate check from Mr. Rebates – $20.90
Total February (non-eBay) earnings: $113.88
In case you missed it, we paid off our credit card debt. Woot!
Now it is our extreme pleasure to welcome out here to center stage, the ones you’ve all been waiting to meet, the newest stars of the Minting Nickels production, please give them a warm round of applause as they enter from stage left…
Home Equity would like to introduce himself first, since he often feels misunderstood. Many times people assume he came into existence because his homeowners wanted extra cash to do something potentially irresponsible – like building a house out of an old 727.
But not the case here. Our home equity loan was taken out to avoid foreclosure. Our original mortgage was a five year, interest only loan, with a balloon payment due at the end of five years. Obviously, we needed to refinance, but the appraisal came up about $10K short from our original mortgage amount. The bank offered us an 80% loan on the appraisal, and then another 10% in the form of a home equity line.
So essentially, we took equity out of our underwater house, to fund our underwater house…It doesn’t make sense to me either, but hey, it was the bank’s idea. (Read more about our house here if you’re curious.)
Auto and Student Loans have less interesting stories: We bought a new car, we went to a pricey grad school, the end.
Lindy would like to say that she is not going to total all of these amounts up because it might increase the chest pains she already feels coming on.
We’ve decided that the car loan will be our next target, because it’s the smallest balance and the payment is the second highest of the three loans. Plus, one of us has a car that is creeping up in miles, and we’ll need to start saving for a new one pretty soon. All the extra income we report at this website, plus all of the money we were previously paying to the credit card will now be going to pay off the car.
You may be wondering, why do we care so much about paying off this debt? Isn’t a car loan, a car loan, and just a way to secure reliable transportation? Aren’t student loans something you just get used to paying the rest of your life? Shouldn’t you consider your home equity loan as part of your mortgage and not worry so much about paying it off?
In many ways, these are all valid points. But in our case, we’ve seen what happens when one debt is freed up. We see all the extra money that is now available for other things.
We have goals and dreams, ones that require money. Paying off our debt will get us closer to pursuing those goals. So we’re willing to tighten up a little now, and hammer down some of this debt, because we see the end of the road and it spells FREEDOM. At least for us.
Plus, we’ve had several years of financial missteps, and we kind of want to make it right.
What do you think about paying off these larger debts? Is it worth it? If you’re doing it, what is your motivation?