The “Plan”

June 19th, 2007

So, basically, I have spent a lot of time reading stuff online. There is a LOT out there. Blogs and message boards and websites, and I have read a ton and posted some to a debt support group message board to try and stay focused and motivated. Whoa.

I say whoa a lot lately.

Since the beginning of this year I’ve been focusing more on getting out of debt. We bought a house and I want a secure financial future for us and our kids. And I want to be able to DO things with the kids and not always feel so crunched in regards to money. Imagine a world where the $750 we pay in minimum payments was free to save and spend as we chose….

Whoa.

So, I started throwing money around. I started zapping little bits to the Capital One card whenever I felt I could. I love online banking. And that’s all fine and dandy. But now I want a plan.

So, the “plan”. Basically the “debt snowball” plan. I’d “fixed” my minimum payment on that card a long long time ago. Back when it was $199 I paid $200, and as the minimum payment has slowly crept down (currently $127) I have kept paying $200. Which meant I paid a little extra, or “snowflaked” a little extra, to it each month. I’ve become more aggressive about that, any time I get “found” money or I spend less for something else than I anticipate, I have been trying to throw it at the card. It has been working. The minimum is 2% so you can see I went from 10K+ to 6K now. But anyway.

I am focusing on highest interest to lowest interest. And I just hate the credit card the most. So, credit card first. If the plan works out I will actually pay both the credit card and the auto loan off in the same month, March 2009. then start aggressively paying down spouse’s student loan. I anticipate Sallie Mae and I having a lot of fights about that…. they resist paying extra towards principal. I will prevail though. If I have to save it all in a separate savings account and do the one time payoff, I will.

Anyway. Tomorrow or maybe tonight I open an ING savings account at 4.5% interest for the fabled $1000 “emergency fund”. Which becomes my son’s college savings fund. His future looks bright already

I’d say I was following Ramsey except I haven’t actually read Ramsey, I’ve just read blogs by followers of Ramsey. But I am doing the debt snowball. But not paying balances lowest to highest, I am all about the interest rate (and I hate the credit card most so it works motivationally for me to focus on it).

My goal is to pay $900 - $1000 each month towards debt reduction. At $1000 we would pay off by Dec 2010. $900 puts us mid 2011. We’ll see. I like to set goals I have to stretch for.

Make it this far? lol

Plan in summary: $900-1000 towards debt per month. All extra over minimums to ONE debt. Start with credit card. Then spouse student loan. Then my student loan.

then breathe.