Money Matters
lifeonthehill
member
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Do you have a debt snowball?
I have read so much about Dave Ramsey online and was fortunate enough to take a class called "life management'' the year I graduated and watched tons of videos and read even more from samples of his books our school received that I have held on to. I had so much knowledge on his baby steps and debt snowball that I never found it overly important to buy the Total Money Makeover book. We stumbled upon it today at good will for $.99 and I couldn't pass it up. I just finished and while I learned nothing new I am just so happy with H and I making this our plan. It was a good and fast read and I am even more confident in our plan.
We are able to put $1,250 onto our debt snowball right now not including our minimum payments. We are on track to be debt free in 19 months. I will be 23 and H will be 26. Obviously this doesn't include the home we don't even own but I can't help but jump for joy every month when we watch that number go down a bit more!
Are you doing a debt snowball or some variation? Is it working for you? What is the plan looking like?
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
Re: Do you have a debt snowball?
We paid off a lot of CC debt in the last couple years, which feels amazing! Contributing to our retirement plan as well as an emergency fund. And any IF treatments that will be required.
Currently we are focusing on keeping our E fund over 2k since we have a LO and paying off her student loan debt since it is roughly 6% interest. My student loans are only 1.8% interest so we are not as concerned about those since the interest currently per year is under $500 a year. By the time MW's student loans are paid off our vehicles will be paid off so within 3 years we should have better cash flow.
I read TMM and started the beginning of this year. While I've always budgeted and had a good savings, I inherited more debt than I thought with H. I took over all finances in January 2012, and really put everything on budget January 2013 started dealing with the debt. It helped H got a fairly decent job that same month!
We started with our tax refund paying off 2 CCs, a court settlement, and a personal loan H had. That took care of all the high interest stuff, then I listed the rest by lowest amount to highest. We also had to put back a nested egg for the furloughs this year.
Unfornuately, that just made our budget = our income so no snowballing. I did change my withholdings to married and that gave us some wiggly room. In May, I got 3 paychecks (I budget for 2) so I was able to pay off SL#1, and that started the snowball (errr, well after furloughs). This month I paid off CC#3 (this was mine... 0% for medical), and CC#4 should be paid in Nov (another 3 check month). That is $13,000 in debt GONE! I really can't believe it sometimes.
Jeep and SL#2 should both be paid off May 2014 depending on our tax refund. I know it won't be like it was last year, but it's all going to debt! And then we are done besides mortgage.
I'm now in my third month and I've already paid off $6500 of debt (two targets). I'm now focusing on my big CC (target pay off 1/14), then I'll move on to my car (target pay off 2/14) and then to my private student loans (target pay off 5/14) Total ~$36k. Once my PSL are paid off I'm going to sock $ into my efund and retirement while paying $2k/mo on my big federal SLs ($88k). With this plan I will have paid off ~65k in debt and will have $20k in the bank/IRA by 1/15. I'm a HUGE snowball fan.
The CC I'm working on actually has a larger balance than my car note, but it has a 15% interest rate so that's why I'm targeting it before the car. The big SL is at a 3.5% rate so I'm not concerned about paying that off quickly, though it should be paid off in ~4 years with this plan. The private loans are also at 3.5%, but I just want to be done with them and it's a small enough amount to include in this plan.
Once all of my revolving debt and the PSL are paid off my goal is to focus on my e-fund (which as a divorced mother I want to be significantly higher than the 3-4 months suggested on MM) and catching up with retirement (I'm 33 and have almost nothing in retirement).
I have a schedule to have my car loan and credit cards paid off within six months, while saving money to pay cash for some renovations and upgrades my home needs. If all goes as planned...I will be done with all of that in 14 months and then can finally start making HUGE principal payments on my home loan and have that paid off in the next five years.
Can't wait to have NO DEBT...not even a mortgage. The dream is what keeps me going and keeps me with an eagle eye for ways to earn extra income and/or lower my bills.