I have decided to throw as much at our debts as possible. First, I will work on building an emergency fund ($1000-$1500); then, pay extra on any debt that has fallen even a little tiny bit behind. I want everything up to date. Then, I want to cut our expenses even more than I have last year. Our only “splurge” right now is cable, since we don’t go out at all. We work, spend time with our child & each other. We look around for free or low cost things to do as a family. This year, we are going to spring for the zoo membership, since we go often.
Ultimately, I want to get our wall-to-wall carpet ripped out. All of it.
First up will be our kitchen (I did not do it!) and our dining room. In its place, there will be tile. I am soooooooooo looking forward to solid surfaces and no carpet in these two areas. Before the end of 2008, it will be installed. My goal is by the end of August. I want to squirrel away 80% of the money before getting the tile installed. I don’t want to increase our debt load at all. Someone, I believe it was Herlean, mentioned having a written plan for the debt paydown this year…..if you dont mind me asking, what does your plan involve and what did you do to set it up? I think putting it in writing would really help me too..
I haven’t been online in a few days.
What I did was take a piece of notebook paper and gathered every single statement that I could find. I wrote down in column form, listing the highest interest rate down to the lowest. Some people write highest balance down to the lowest. I added a column for the due date, the date I need to mail the bill so it is not late. Later, when I put it on an Excel spreadsheet, I added the mailing addresses in another column. I find it very eye-opening to see the total that we owe each month, the total of all of our debt, including the mortgage, on paper.
Who Do I Owe? Balance Payment Due Date Mailing Date Interest
Mastercard $3,098.76 $35.00 March 1 February 15 7.85%
Sears $975.88 $10.00 March 10 March 1 22.00%
Auto Loan $1,000 $350.00 March 15 March 1 10%
This way, you will see how much you owe in black & white and have a real clear picture of what you owe. It will make you somewhat sad, but it can also fire you up once you decide to pay it off and get it done with.
I am struggling with debt right now and really hoping to get a few pointers and some camaraderie here. I look forward to getting to know you all. I know your struggle all too well. Years ago I had a college instructor that said “debt is economic slavery.” That is all too true. The key to getting out of debt is changing your view toward money and spending. I’ve gotten out of debt only to get right back in. I am still in debt but am getting out by the grace of God and intend to stay out. I like to listen to Clark Howard and he has some wonderful resources at www.clarkhoward.com. Also www.stretcher.com will show you how to make even a tiny bit of money go a long way — or at least further than it does for most folks.