Thursday, April 1, 2010

The Plan

There is a light at the end of the tunnel; I swear I can just barely see it.  Paying off my car was the first big step toward me actually starting to believe we have a glimmer of hope that we could get most of our debt payed off in a somewhat timely manner.  Here's the plan:

My car payment was $260.  Since the car is now mine, all mine (yet I'm still waiting for the lien-free title to return to me), that money has been getting thrown at paying off the carpet that we bought for the basement remodel.  Fortunately, we had 12 months to pay it off without interest, so that will be payed off by summer.  Woohoo!!  Credit Card #1 - Payed off!

Up next, the credit card with the highest interest rate.  I think this is called the "snowball method," but I can't remember where I officially read that.  Basically, I'm going to rearrange our payments so the bulk of the money we send toward credit card payments each month gets thrown at the credit card with the highest interest rate.  That $260 car payment/carpet money is also going that direction.  With the amped up payments, I should be able to check that credit card off the list within a few months and move on to the next highest interest rate, and so on.  I have three cards with balances, but nothing too outrageous (by national standards at least).  My goal is to have ZERO credit card debt in 2 years!  Remainder of Credit Cards - Payed off in 2 years.

When all that nasty revolving debt is payed off, we can focus more on our "good debt," student loans.  Evan's won't take much effort to pay off since it's only about $1500 at this point.  A few payments like I did for credit cards and BOOM!  Gone.  Mine, however....will take a lot more effort.

Just those three things alone have me tingling with excitement, but I also need to figure out a game plan for how to acquire a larger vehicle (like the gorgeous Honda Odyssey) before my boys grow too much more or we end up with another kid to haul around.  I'm really not quite sure how to go about doing this since we are currently paycheck to paycheck people and summer is just around the corner.  We always struggle in the summer because I obviously can't teach, so it's always rough for those three months.  I'd love to hear any suggestions on this one!  Do you have a super-secret, ultra effective method for saving up for a down-payment?

On a final note, I would really like to check out this book - The Total Money Makeover by Dave Ramsey.  Dustin over at Engaged Marriage wrote a post about how he and his wife wiped out more than $54,000 in debt by following Ramsey's system and I'm dying to give it a shot.  I've been reading Dustin's blog for quite a while now and I really respect his opinion, so I'd love to see if we can pull off what he and his wife did.

Money mangement is certainly not one of my strong points and I think Evan would agree it isn't really his forte either, so we could certainly use all the help we can get when it comes to paying off our debt and planning for the future.  As of this moment, we're struggling to do either on our own.  Ok, I'm ready.  BRING ON THE ADVICE!!!

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