I have been a real tyrant about money lately. I am not just talking about clipping a few coupons or turning the lights off after C leaves a room, no I have been a full blown cheap ass. I have been refusing to go out to eat or spend money on things we can do with out. (Obviously my shoe obsession doesn't count :) So this month is the first time in a long time that we aren't going to be negative 14.00 when all the bills clear. This month we have money. We have enough for C's "way too expensive" Laser tag party. We have enough to buy groceries and put gas in our cars. This means that on the 15th we won't be paying of CC charges from the first half of the month and low and behold we might just have cash then too. We just might be able to leave the money in the savings account where it belongs. Imagine that.
So to keep us in the clear we have a plan. We've done it before, the snowball effect, and it works well. We unfortunately gave up on it during IVF, FET, and me not working full time. I am the main budgeting person in the house but I really could be better at this job. My problem is paying too much. I see a balance on a CC and I just want it gone so I pay as much as we have at that moment not leaving us a realistic amount for every day essentials. It has been a bad habit that has left us cash poor. Now we do have a boat load of debt, but it really is only IVF, FET, Education, and the SUV. At least we know where every penny went.
The snowball is simple. You drop all of your payments down to the minimum due except the lowest. You pay double to triple the payment on your lowest debt until it is gone. When that debt is gone you take the amount you were paying on that and add it to the minimum payment on the next highest bill and so on and so forth. The key is not to acquire more debt in the process. I.e. a new car... got mine fixed BTW - no new car for me.
So our lowest debt is 474.10. That was just from July into August when we weren't paying attention and charged gas and groceries. Lesson learned. That will be paid in full the 15th of Oct. The next smallest bill is one more random student loan (the last one, for real this time) which is just over 700.00. Then the big guns hit; the vehicle, and medical bills. But if we have a plan we might be able to cut our debt in half by this time next year.
Some of my friends who have a mortgage probably think I am being simple. That is okay, I like it that way. The simple facts are: We cannot afford to live like we have two full time incomes, S makes good money and we should be managing it better, Life is too short to owe credit card companies money, We shouldn't have credit cards for everyday use, I am smart and should act like it when it comes to the budget. Simple planning, I got it.
The Big Debt Countdown Begins!
2 comments:
Sounds like a good plan!!! We have debt too...so hard to stay out of it. I have a college loan like you wouldn't believe and who knows if it will ever get paid off (and I went to college HOW long ago)!?!? Sad!
Jamie, you're not alone. We don't have a lot of credit card debt, but my student loans are HUGE. The main problem being is that they compound the interest whenever they sell the debt to another company (illegal) so even though I have paid, and paid, on the things I have barely touched the principle. *sigh*
My husband and I used a credit debt company way back when his credit card debt was out of control. For one payment a month we were able to pay off his debts, which were considerable, in about 2 years. They negotiated with the cc companies to lower the interest payments or something so we were paying the principle, not just interest. I think they paid off the debt exactly like a snowball, paying the smaller debts w the monthly payment and so on. It really works, and it doesn't affect your credit score.
Post a Comment