Hi Reader,

Every month, I'm going to share exactly where our debt stands. Here's where we are ending in April:

The balances

How the extra payment happened

If you read the last two emails, you know April was an unusually good income month. The tax refund, the freelance contracts, and the other income streams combined meant we had more margin than a typical month.

On top of that, we decided to take out a debt consolidation loan. We were able to take 3 of our highest-interest-rate debts (19.5%, 20.1%, and 15.8%) and consolidate them into an 11.45% loan. It's still high, and the monthly payment is a scary number, even though it's $100 less than the combined minimums previously.

The good news is that we still made extra payments this month, and over the next two years of paying down our debt, we'll save almost $7,000 in interest by consolidating.

Our payoff strategy

We are using a modified debt snowball. The traditional snowball method has you paying off the smallest balance first, regardless of interest rate, because the psychological momentum of eliminating a debt keeps you going. We mostly follow that, but we've made a couple of exceptions where the interest rate difference was too significant to ignore.

We also have a few debts with unusually high amounts. And a few debts with low interest but high payments. This custom payoff order will help us psychologically feel the wins while, as quickly as possible, minimizing our monthly minimum payments. The smaller the minimum payments, the larger the snowball.

Right now, our focus is on the Apple Card at 15.24% interest, followed by our PatientFi loan at 0% interest. Once that's gone, everything that was going to it rolls into the big interest card - adding $481.50 to our snowball by summer!

It's not the mathematically optimal method in every case. But it's the method we've actually stuck with, and that matters more than perfect math on paper.

How it feels

4 months into our serious payoff progress, and this month was the first time I felt like we were actually making a dent. Six months ago, we would have taken this tax refund and spent it all, with no plans for future vacations or extra payments, and it would eventually have spiraled us into more debt.

The original goal was to be debt-free by Christmas 2029. At our current pace, we're looking at closer to October 2029! I'll keep updating this every month so you can see exactly how that changes.

Chat soon,