Thoughts on Paying Down Debt

I talked with my brother Ben the other day. He’s down in Georgia serving a stint in the Army. Ben is the youngest of five kids; I’m the oldest. So Ben has had the advantage of watching us older kids screw up… so that he can avoid the mistakes we’ve made.

Not to say he hasn’t made any financial mistakes; he certainly has. But nowhere near as many as I have… and nowhere near as big. (Nobody else in my family has lost $30K on one deal like I have.)

Anyway, Ben is currently debt free. He bought a car a while back with a loan, but hated the loan so much that he got rid of the car after only a short amount of time. He’s been debt-free since.

Ben related to me how easy it is to save money without debt. He said it just kind of accumulates when you don’t have a bunch of credit card companies demanding minimum payments every month.

I admit: I felt jealous.

Oh, to be debt free.

Sigh.

My grandma died on February 25. It was kind of a good thing. She had Alzheimer’s, so it was as if she had died over five years ago. She couldn’t remember anybody, and she was half a continent away from where I live.

With her passing, I have no living grandparents left. They are all gone, except for my grandparents in-law. I’m grateful they’re still alive, and enjoy visiting with them.

The reason I share my grandma’s death is because my grandparents left an inheritance for the grandkids. Each one received $5,000, including me. This has relieved me a bit since I can use this chunk of money to pay down debt.

I figure this unexpected windfall, combined with selling my motorcycle, could reduce my debt load by about $18,500 (assuming I get the asking price for my motorcycle).

But first things first. On my to-do list are:

• Use money from my Prosper loan to pay off credit cards. (I might make a phone payment, but they charge $15 to do this. So I’m currently waiting for the statements to come in the mail.)

• Use a warm weather day to wash my motorcycle and get it ready for sale. (I’ve already determined the value of the bike at approximately $13,900.)

• Determine which loan balance should be paid down with the inheritance money–and pay down that balance.

Just writing these three items down, I already feel like my debt situation is looking up. :-)