Snowballing our way out of debt
Posted by Kyle Heon Tue, 19 Jun 2007 00:24:00 GMT
My wife and I picked up Dave Ramsey’s best-seller The Total Money Makeover about two years ago, read through it incredibly fast and began to work on our debt snowball. The problem was that we continued to add more debt, including a new camera, HD television, replaced my workstation with a Dell XPS 17” laptop, and the biggest addition, a [used] 2006 Dodge Grand Caravan.
It wasn’t until last November that I realized we really were just going through the motions, pretending to be getting out of debt. With the arrival of the New Year, I really got focused.
Every extra bit of money we could muster up, either from selling stuff (mostly on Half.COM) or through bonuses, tax return, and gifts went to the smallest debt we had. Since the beginning of 2007, we’ve managed to cut out nearly ALL unnecessary expenses and so far have paid off nearly $9500 in debt. This includes completely paying off the laptop, my last school loan, and one of three credit cards. Right now, early projections show us being debt free by middle of 2008 but I’m pretty sure that given our current rate of progress, we’ll be able to speed that up. I’m hopeful that we’ll be debt free by March/April of 2008.
The next step after becoming debt free is to fully fund our emergency fund. Once that is done we are going to start saving for a house. After all that (probably in a couple years), I’ll be socking away a large percentage of money into retirement and starting to fund my kids college funds.