Thursday, November 20, 2008

Debt Reduction

We have always wanted to be out of debt sooner than later, but when we got married last summer hubby was just out of school and had no job. He held a brief position at a very well paid job, but it took a huge toll on him and in the end we decided that money was not worth it. We were setting up huge goals and living life like we didn't have to worry about money. We have since learned that it's great to plan for the future, but not to set your hopes to high because you never know what may happen.

He finished work just about when his student loans came out of deferment. I began making minimal payments on them, and soon realized that I was barely making a dent in his principle. He started out owing just under $23,000, 6 months later he was down to $21,700. We paid down just over a thousand dollars...not that big of an accomplishment considering we spent almost $2,000 in the process! Stupid interest! Well, I just printed out a report of the past 6 months and we pleasantly surprised... we have brought his principle down by about $6,000!

It was a great learning experience for us, because it forced us (literally) to live off of one paycheck. What ever 'extra' money came in went either straight into savings, or to pay off debt. I have a personal problem with this because I am a saver by nature. Hubby has dealt with debt in the past and would rather wipe that out before seriously thinking about saving.
What do you recommend? Paying off debt, or saving?

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