Wednesday, January 25, 2017

First one down.

Thanks to a totally unexpected blessing!

So very excited to report that we will be paying off IN FULL our smallest debt of $2,550.  This is one that we needed to have paid off by May to avoid any interest charges.  To say that I am excited would be a total understatement!  And to what or whom do we owe our gratitude?  Our mortgage lender!

You read that right!  Our mortgage lender.  Thanks to an overage (and quite a large one at that) in our escrow account our mortgage lender is returning $3,025 to us.  While some people might be mad for having overpaid, I'm thankful.  Before you think I've lost my mind, let me explain.  Prior to my dh and I joining forces and drawing the line in the sand to get debt free, we would have NEVER saved that amount of money just for the sake of saving.  With no definitive budget, that money would have been spent on anything and everything.  As for how our lender managed to so grossly miscalculate our account, to an extent is it understandable.  2016 was our first full year in our home and the previous owners had used it solely as a vacation home.  Must be nice to have that luxury!  In our state, second homes are taxed differently.  Since this is our primary (and only) residence, we pay less in property taxes.  

My news gets even better.  As a result of rebalancing our escrow account, our mortgage payment has dropped by $210 a month.  In all my years of owning a home, that has never happened before.  Guess there is something to be said for the old saying Never say never.  

Dh and I have been discussing how to use this new "found" money.  With our smallest debt soon to be history, that still left us with a little leftover money.  We decided to use that to pay our car payment ahead.  We will still continue to pay it monthly, but I like the cushion of having it paid ahead.  That way if we do have a short month (money wise) if absolutely necessary, we could skip this payment.  As for the decrease in our mortgage payment, we plan to put extra towards our baby emergency fund.  Dave Ramsey recommends $1,000 which we feel isn't enough.  We started padding it with $50/week since starting the plan in January.  We would like to see that grow to $3,000.  First goal will be to get to $2,000 as fast as we can and then we will drop back down to adding $50/week until we reach the $3,000 mark.  As of today, we have $1,200 in our baby emergency fund.  

How are you doing at digging your way out of debt?  Had you succeeded at paying anything off?  Stay tuned as I continue to blog about our journey of getting out of debt once and for all!