Hello from Canada! We are in the middle of a fam-cation. One of the things about living far away from our parents is that most of our vacations turn into visiting the fam-cations. Sitting in my parents’ basement allowed me to spend some time doing something that I have been meaning to do: put together a new planner / bullet journal for the upcoming academic year (Im on a new year / school year rather than a Jan to Jan calendar). I decided that I would include our monthly budget tracking figures and weekly menu planning in the bullet calendar. *1 Doing this meant that I had to update and transfer information about all of our debt, which we owe in various currencies, to the bullet journal. I also did the conversion rates and put together the current total. As a consequence I have the dollar dollar bills amount of our debt which I don’t think I have disclosed so far on my blog. The grande to-tal is a whopping almost 50K pounds. We have a goal to pay it all off in 2 years. But wait – we’re currently at 51% of where we were to start with, so this is a good thing!
The below figure shows how our debt is distributed across the following countries and currencies. Looking at this, you can see that most of our debt is student loan debt (CAN, EUROS). We have very small credit card debt remaining in the US and the UK debt is our car loan and credit cards. Our debt is pretty well diversified. I’m pretty sure you are supposed to diversify your assets not your debt, but whatever.
September 2018 Total Liabilities: 50K
We are also currently expecting two income windfalls next month from extra work. Together, these “should” (the amounts are still pending) amount to about 30% of our total outstanding debt, which is why I suspect that we can pay off the remaining 70% aggressively over two years. This means that the approximately 35,000 pounds remaining will need to have a total debt payment of 35000 / 24 = 1458.33 a month in debt payments. This requires a monthly debt payment plan of about 30% of our monthly take home pay. Useful for us, some of our euro-denominated debt is to a friend and 0% interest and so I am “saving” our repayment in the market and therefore our debt repayment has the potential to grow faster than if I was just making regular payments.
I wanted to write this post because I think there is a lot of shame around people with debt, either self-shaming or others doing the shaming and I think it’s important to be transparent and forthcoming with our financial situation. We have a lot of debt, but, we also have stable income that is burdened but not overwhelmed by our situation.
So while I am really sad that the 30% of our take home isn’t going to go into savings right now, which would be awesome, I’m not bitter about having (mostly) invested in higher education. As a first generation college student, I think some debt is better than others, and for me, my education was not only an investment in my future income stream, but also an investment in myself in terms of achieving my own personal and professional goals and independence. Of course having 100K in debt for a couple starting out is not an easy start to one’s marriage. But, we also don’t have kids. Tough choices come in many different shapes and sizes — some of you may be against student loan debt but totally willing to have multiple children. I ask you — why are those your financial priorities? I’m not trying to say that having kids is wrong, but people sometimes talk about education like its a reckless and expensive thing that needs to be kicked around and questioned and yet are totally fine with popping out another child because “they want them”. Family size is as much a personal financial choice that has FIRE consequences as number of university degrees.
So starting from next month, on the first Friday of every month, I’m going to write down what our debt repayment strategy is for that month, update the totals, and gradually build a line chart tracking our debt. I’ll also talk about where we struggled in the month and what went well. I hope that will be interesting. It will definitely be illuminating to us. As a counterfactual, it would be great if someone could play along and help me figure out how much it would cost to have a hypothetical kid.
Do comment below if you have any suggestions or want to help.
*1 I found this video the most useful video on bullet journaling (no affiliate)