grrouchie, you mentioned previously about a plan similar to Mr R's "debt free snowball" .. is yours a free plan ? professional, DIY or otherwise ?
I ask because I note that Mr R's "snowball" is not free !!
(wow an American wanting to charge me for something..how odd that this surprises me !)
The reality of it is that it's a quite simple plan. It has a lot in common with Dave Ramsey's plan and others that I have read since. The plan itself is not the hard part, the hard part is figuring out your budget and actually sticking to it.
You see, when I first decided that I was going to get out of debt I had my work cut out for me. I was drowning in extra payments that I was having to make every month and one day I sat down to do my bills and actually looked at the amount of interest that I was paying every month. That is what sickened me enough to actually make the decision to pay everything off and stick with it. Interest is a killer.
One of my credit cards (the one with the largest balance) had an interest charge of over $200 per month that I was paying. And, because I couldn't accord to do more than just the minimum payment my balance wasn't shrinking fast enough to make any kind of difference what-so-ever.
The following is my information as I remember it best.
I made a list of all of my debt.
- Bank of America Credit Card.
- AT&T Credit Card.
- Discover Credit Card.
- Sam's Club Credit
- Lowe's Credit
- Best Buy Credit
- Student Loan Number 1
- Student Loan Number 2
- Car Loan
So, then I organized my debt in terms of which lines of debt had the biggest balances and which had the smallest.
I made the minimum payment on every single one of the above and at the end of the month, whatever money I had left over went towards the debt with the smallest remaining balance.
Once the smallest was paid off I rolled everything over into the smallest of the remaining.
Repeat this process until you are left with just one remaining debt and you are pouring all of your available resources into it every month until it is eradicated.
The funny thing is that the above is the easiest part. Sorting your bills, paying extra if there is left over money, rolling it over to the next bill, etc.
The hard part is developing the discipline to actually do it month after month and year after year.
The devilishly hard part is being willing to cut out other expenses in order to free up more money so that you can put more money towards your debt.
Dave Ramsey has a saying that I really love.
(paraphrased) You have to be willing to live life like no other right now so that later you can live life like no other.
Basically it boils down to this. Stop having fun until your debt is gone. Cut your cable, cut your eating out, cut your entertainment budget and just spend all of that money on your debt. Once the debt is gone you'll be free to do whatever you want with your money and you'll have a ton more money to do it with. You will be free.
Over the course of the 3 or so years that I was eradicating my debt there were times when I did more than I should have and didn't pay as much as I could have towards my debt. I consider them moments of weakness, I am only human after all.
However, much like dieting or any other addiction (and spending can be an addiction) you will have moments where you fall into your old routines and habits. It's picking yourself back up afterwards and getting back on track that defines you.
This is what has kept me going for the past few years and this is what is keeping me going in my weight loss struggles. Sure I've dropped nearly 60 pounds at this point (by next week I hit this goal!). But there are months where I lose nothing or gain a couple of pounds and I really want to give up.
There are weeks where I have fast food 3-5 days and just want to stop eating the salads and tracking my Weight Watchers points and just go to the store and buy a few bags of chips and some ice cream and other such nonsense. However, I saw that by continuing the struggle with my finances - even after a bad episode or two I could get back on track and eventually accomplish my goal.
Thus, with my weight loss, even after a bad day or week I no longer have an issue getting back on track and trucking towards my next milestone which, by the way, will be hitting 240 pounds by Sunday.
Yes Cheryl Crow, every day is a winding road.
I'm no expert in finances or weight loss, I just developed the motivation to put the effort into getting where I want to be and making the sacrifices to get there.
If I can do it everyone can.