I began this debt blog, which I called Debt Reduction Formula, in September of 2007.

That happened to be the same month I sold my home in Highlands Ranch, Colorado, and moved into a rental home in Parker, Colorado.

At the time, I owed $75,286.38 in debt. I was really feeling the pressure of the debt I owed and felt I needed to do something proactive to get it under control.

So I started this blog.

I proceeded to pay down my debt consistently, reporting on my progress each month.

From September 2007 until May 2009, I reduced my debt by $45,192 — a 60% reduction in 18 months. In May 2009, I predicted that I might be out of debt by early 2010.

My prediction has not come true.

I’m still in debt, and the amount I owe today in September of 2011 is actually more than what I owed in May 2009. As of today, I owe $39,289.89 — about $9K more than I owed two years ago. (This figure includes my car debts. I still have no mortgage.)

This is a little bit embarrassing to admit because I really thought I would’ve done better. But I haven’t.

You see, in 2010, I shifted my focus from paying off debt to growing my business, raising my three kids, moving my family to another rental, and various other things. I stopped publishing my monthly debt update. In fact, I stopped tracking my debt altogether.

As a result, my debt has bounced up and down and ultimately increased.

Which brings me to the primary point of this article: Tracking and reporting how much you owe on a public debt blog keeps you focused on becoming debt free… and… actually helps to reduce debt. My results from September 2007 through May 2009 are proof of that.

But without the accountability that a debt blog provides, it’s quite easy to slip back into old habits. And even if you don’t slip back into old habits, it’s still easy to grow complacent and simply lose track of your debt.

When it comes to debt, a little bit here and a little bit there can add up to a whole lot.

Today, I finally updated my outstanding debt and was shocked to discover that I had not updated my spreadsheet in 13 months. And so I’ve realized that I need to continue updating this debt blog to continue my journey to become debt free.

And that’s what I plan to do.

By the way, here’s the latest spreadsheet with balances I’m carrying. My debt in August 2010 was $25,460.82. I bought a second vehicle in October 2010, which is why there is a substantial increase from then until now.

Outstanding Debt as of September 14, 2011

If you’re looking for inspiration to get out of debt, then you would definitely not want to look to the U.S. government.

They’re setting a horrendous example… and then trying to pass it off as “no big deal.”

In my opinion, it’s only a matter of time before the U.S. debt load comes crashing down.

But hey — I’m just a citizen. What do I know about economics and finance?

Good question. I’ll answer it in just a second. But first, from the article:

Mr. Obama’s budget said 2011 will see the biggest one-year jump in debt in history, or nearly $2 trillion in a single year. And the administration says it will reach $15.476 trillion by Sept. 30, the end of the fiscal year, to reach 102.6 percent of gross domestic product (GDP) — the first time since World War II that dubious figure has been reached.

Here’s what I know about economics and finance:

When you’re total consumer debt exceeds your gross annual income, you’re pretty much screwed. To get out of debt, you’ve got to make huge gains in your annual income — which for most people (and governments) is not realistic.

Get the full story here and see if you agree with my conclusions:

Federal debt now equals total U.S. economy

This past fall, my mom decided to sell her 2006 Honda Pilot and upgrade to a new Pilot. My wife and I had been getting by with just our van for a few months, but we were ready to have a second car again.

So: Rather than go car shopping, we decided to buy my mom’s used Pilot. It had relatively low miles and was still in good condition. Plus, my mom was willing to give us a good price.

I called up USAA because they offer really good rates on car loans. I was already pre-approved, so the car loan was processed quickly. Of course, I had to decide how much of the car I wanted to finance, as well as if I wanted extra to cover the sales tax.

I casually decided to add an extra $500 onto the loan amount to cover the tax I expected I would have to pay. What I didn’t count on was how high the sales tax would be.

(Just a side note, for those purchasing brand new cars, the sales tax is usually deductible. Keep that in mind when it comes time to file taxes as it could save you a bundle. However, tax implications can vary state to state, so check online or with a professional to see what you do and do not qualify for.)

When I went to the DMV to pay the taxes and get my license plates, I discovered that the sales tax was nearly three times what I had budgeted! Talk about a shocker.

For the record, I live in Parker, Colorado, which has a sales tax rate of 8.1%. A used car purchase of $17,500 generates a tax of $1,417.50. Yikes!

In hindsight, I should have listened to that little voice in the back of my head that said, “Ryan, you should probably check the sales tax rate to see how much it’s going to cost you.” If I had done that in advance, it might have changed my decision to buy the car and/or changed the amount of the loan I got.

Unfortunately, I didn’t do this. End result: I had to pay for a portion of the taxes with a credit card just to get my plates. (This is one of the “two steps back” I alluded to in Getting Out of Debt Not Always Straightforward.)

Either way, if you are buying a used car and financing it through a bank or other lending institution, I strongly recommend you find out what your sales tax rate is first. Depending on your city, you may owe a much bigger chunk of money than you expected.

And if you’re thinking of buying a used car and also planning to move in the near future, you might consider two things:

• Move to a place that has a lower sales tax rate.
• Postpone your car purchase until after you have moved.

Getting out of debt is not always a straightforward process, especially if you’re self-employed like I am.

Last year, I made some business investments that didn’t pay off quite as well as I wanted. As a result, I had to tap my line of credit in late fall and again in January to pay taxes.

With a job, you have predictable income. But in business, cash flow can often be erratic and unpredictable.

The income inconsistencies in business can make getting out of debt a bit more of a challenge. At least, that has been my experience the last couple years.

I’ve taken a lot of steps forward, and a few steps back. The good news is I’m still moving in the right direction… even if I have a bad month or two. I’m aware of what’s happening and know what I need to do to keep moving ahead.

I share all this with you so that you don’t get overly discouraged if your journey out of debt isn’t as straightforward as you thought it would be.

Just keep your eye on the prize (being debt free) and keep doing what’s necessary to get there.

And don’t let a bad month or two derail you. You can do this.

Welcome to this week’s Carnival of Debt Reduction!

My favorite submission this week is from PT Money. He shares how to opt out of credit card offers and junk mail in general.

This is an excellent idea, and I highly suggest you follow this advice. Because the more offers and advertisements you receive in the mail, the more likely it is that you’re going to spend money you shouldn’t be spending.

My second favorite submission was from Mighty Bargain Hunter. He suggests kick-starting debt reduction by selling your stuff.

One tip he shares was new to me. He writes: “A nice collection of DVDs can be sold as a lot on eBay for a few hundred dollars (or more).”

I hadn’t thought of selling small items in lots before. This would probably work well for many different kinds of collections. Just something to keep in mind if you need to raise money quickly to pay down debt.

Here are some other good articles worth reading:

• Free Money Finance has a credit card beef with Dave Ramsey.
• Debt Relief Options has a post on, well, debt relief options.
• Christian Personal Finance gives five reasons why you may not be out of debt yet.

That’s it for this week. If you’d like to participate in an upcoming Carnival of Debt Reduction, please submit your post here:

Submit a Post to Carnival of Debt Reduction

Thanks!