Operation Get My Life Together: The Debt Snowball

I mentioned in yesterday’s post about my envelopes and my cash flow system to help us get out of debt.  I want to stipulate that, as of now, I DO NOT add my house into this snowball debt.  Let’s be real, folks….its kind of like me being fat…the fat did not accumulate in a day and it will not be gone in a day.  I want to set attainable goals to keep me motivated and that is what I’m going to do.  Will we, eventually (prayerfully) get out house paid off quicker…yes…but my main goal is to get this other debt gone and be on a cash only plan for purchases in the future.

I stumbled on this wonderful website for DEBT SNOWBALL – ing.  This is good for those visual people, like my husband! There is also another cool site on Debt Reduction that is really good, as well.  Both of these sites are free and easy to use.

The debt snowball is listing all your debt from SMALLEST to LARGEST. Again, I’m excluding my house for now.

For us, that would be:

  • van
  • student loan
  • equity

We owe the lowest amount on our van (I’m not even looking at interest rates).  My monthly payment on my van is $240, but only $220 goes towards the principle. The rest goes towards interest.

For the MONTH OF SEPTEMBER only, this is what we have to throw down on this debt.

Mthly pymt:  240

Kids bills:  110

2 Travel checks:  282

OT: 300

Extra check:  125

Leftover from August envelopes:   453

Zero out extra:  645

This is a total of $240 regular payment + $1615 that is added directly to the principle.

If we were to continue ONLY paying the $240 a month, we would have 3 years before this is paid off.  With doing a ZERO BASED BUDGET, we will have this debt PAID OFF by December of 2017. Anything extra that comes in..we put in our debt envelope.  We just continue building it up to pay this off.

Now, starting in January 2018, we will ROLL that $240 van payment that we no longer, technically have, and we will add it to our next debt…my student loan.  Let’s look at the projected monthly amount we can throw at that bill in January.

Mthly payment:  183

Kids bills: 150 (yes it went up only because we were not having our daughter pay anything for a month because of her financial issues)

Extra check:  125

Zero out extra:  645 (this should always remain the same)

Old Van payment  240

I cannot calculate his OT or his travel check because these may not come through this month.  With ONLY those few things….we can pay the $183 regular payment and then add on an EXTRA $1,160 to our principle.  If I just pay the minimum amount, I will pay this bill of January 1, 2031.  By adding on this EXTRA, I can have it paid off by by the end of next year….maybe sooner if I added in that OT, travel and anything extra we might get.

After this is paid off, we have our equity loan.  We have our regular payment of $115, but then we add the kids bills, extra check, zero out extra, old van payment, and old student loan payment.  We will pay $1458 per month.

Then we move onto the house…..

Seriously…………..this is doable.  I’m excited.  Big Daddy is excited.  We have been painfully disciplined and we do not spend if our envelopes are empty.  We have not used our debit card and we do not own a credit card.

Please if you have any questions, let me know.  I’m happy to answer them.

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  • I love your enthusiasm and focus in this post! My husband and I entered marriage later on in life as two adults and he had previously been married. When we finally married 4.5 years ago, we never put our $ together. But now with baby#2 on the way, we are doing a very similar thing you and your husband are doing. Looking forward to following your progress.

    • The thought of being debt free is so exciting to me. I have always had this desire, but my sweet husband has not always shared that desire….or he has but lacked motivation. Congrats on your growing family!

      • Thank you. I am more motivated than my significant other as well. He views debt as very normal and “just what you do”. We are still working on meeting in the middle. 🙂

      • I’m not sure what happened with my husband. I think it was me telling him that I felt like I was suffocating with this debt and although it is “normal” as believers we are called to be a City on a hill, not a face in the crowd. I wanted our story to stand out and be different. Then, I did my homework and presented him with the zero based budget…to my surprise, he latched onto it and I was immediately writing things down and being proactive. I didn’t give him a moment to back out LOL

      • I made a budget back in August and my husband is now onboard after seeing how it WORKs! Never give up hope 😀

  • This is so exciting and I am thrilled for you all! My husband and I used the debt snowball and DR baby steps the way Ramsey teaches them and we had enormous success. There is a reason hit method works when following the baby steps, over just doing a debt snowball. You do not have to answer this over the comments here, but I am wondering if you all have a small emergency fund to start out with?
    If not, I would encourage you to set aside a starter emergency fund of $1000 before you even touch your debt. That way, if an emergency comes up along the way you aren’t blindsided and forced to derail debt payoff efforts. Dave Rasmey also teaches to work on paying off the house early as a totally different baby step that comes only AFTER paying off all other debts, building an emergency fund and starting to save for retirement and kids’ college. I hope this helps. God bless you on the journey and feel free to check out my blog for ideas or inspiration.

    • Yes ma’am, I do 🙂 First thing we did was do our emergency fund.

      • Fantastic! I’m cheering you guys on through your journey. There are so many people here on wordpress that are chronicling their journey out of debt. It is absolutely beautiful given how out of control, upside down our world is. There are many that are saying the same thing you are, enough is enough!

      • Just the knowledge of it began weighing me down, physically…like I couldn’t breathe. I’m so thankful my husband is on board 🙂 Excited about our journey!

      • I can empathize with those feelings, for sure. We didn’t even have a mortgage, and still don’t yet and still I felt suffocated by our debt. Debt is just terrible and not at all what God wants for us. Take care for now and have a blessed Easter!

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