All Entries in the "Debt Snowball" Category

How Has the Financial Crisis Affected You?

I’m starting this blog back up again in light of the current economic status here in the United States. I’m curious, how has the financial ‘crisis’ affected you? I’ve read online about families with both wage earners out of work, people with non-adjustable mortgages losing their homes to foreclosure because of employment and elderly living off of retirement having to cut back.

It saddens me to see so many people affected to such severe levels. I am thankful that we are not being affected much. Sure the 401 (k) took a hit but we’re in our 30s so we have plenty of time to make that up. Some of the grocery prices are higher but this year my son is attending a school that is closer to home so our savings in gas more than makes up for the increased grocery prices.

Additionally, my freelance writing has really taken off and I am supplementing our income at a level that I could have never imagined for part-time work from home. I got a bit off track the past few months but am now more motivated than ever to continue my debt snowball.

Sold My Infiniti G35

When I started my 6FiguresNBroke blog, I mentioned that I loved my 2006 Infiniti G35 which was financed at a “fantastic interest rate.”  Well even with the great rate, the payment was still $820.00 per month.  Not only was the payment high, but upkeep was also expensive.  See, it wasn’t just your typical 2006 Infiniti G35 coupe, we put several thousand dollars of after-market parts in to the car (to the tune of $13k-$15k).  As a result, the rear tires needed to be replaced twice a year.  These were 20″ tires and wholesale price on each tire was close to $300.00.  So there is $1200/year in tires. 

Six Figures and Broke Debt Update

I try to update my chart over at the No Credit Needed Network once a month, today was that day. Over the past month, we have a net reduction of $1510 on our credit cards. As I’ve previously mentioned, I have not included my automobile loan, home equity loan or student loans in that chart. The amount would have been lower but my husband has had about $800 in charges hit his account for his upcoming business travel. So in a month, when we receive the expense check, we’ll be able to apply that chunk of money to the debt.

Since we started with NCN at the end of 2007, we have paid off 12.49% of our debt. At this rate, we’re looking at about 32 months to pay off the debt. As my income goes up a little bit (I am a freelance writer so it isn’t much right now) this will go a little bit faster as 100% of what I make goes directly on to debt.

$340.50 Middle of the Month Payment

My husband’s company usually gives a hefty annual bonus to employees (several thousand dollars); 2007 wasn’t the best year for the company so we weren’t expecting a bonus.  Well the company felt bad so we ended up with a small bonus - $340.50 after tax.  Not one to look a gift horse in the mouth we were thankful.  The money hit the checking account today and I just got done paying $340.50 on my Venetian Card.  I tell ya, it feels good to know that I’m really making a positive change in our lives.

Dave Ramsey comments about people changing the family tree from the roots on up.  That is what I’m doing.  Well my sister isn’t a spendy gal, she’s actually a tightwad.  Looks like I got all the spending genes in our family hehe. 

NCN Blog’s Festival of Frugality

When you have a spare minute, take the time to read one of the articles posted today on the No Credit Need Blog’s Festival of Frugality.  I’ve been reading the NCN Blog for a few months and always find very useful information posted.  I think the reason I like it so much is that the owner of the site is a *real* person who has walked the get out of debt journey with his own two feet.  He’s a dad (and sounds like a great dad based on the NCN Podcasts I’ve listened to), a hard worker, a down-to-earth kinda guy.  Yes I’ve made all of these assumptions based on a blog and a podcast.  Even if I’m wrong (as a woman, I reserve the right to be wrong from time-to-time) he still helps motivate me and that is important.

Okay back to the main topic - the Festival of Frugality.  Take a few minutes of spare time and read an article, next time you have a few spare minutes read another one.  These are fantastic posts made by REAL people like you and me.  I’m not done reading all of them yet but so far a few of them have stood out - here are my favorites: 

Saving Strategy: Eat Before You Go Out - This sounds like a good idea, why haven’t I thought of it?  hehe  I know when I have a day of errands planned, especially if I have two children in tow, it is easy to just stop off for a ‘bite to eat.’  Eating at home, before the errands, is not only going to save money but I’ll have less cranky kids - hungry kids are not conducive to productive errand-running.  Thanks for the great tip from the Million Dollar Journey blog.

10 Common Expenses To Avoid If You Want To Really Save Money posted over at Money Blue Book has some great and easy to implement ideas to help cut excessive spending.  I’ve taken notes!

We’ve had some good news in the Six Figures and Broke house, hubby had his annual review and is getting about a 5% raise.  The company he works for absorbed the increased health care costs for 2008 so we didn’t see an increase in insurance on our part.  So yay, a 5% raise - more money for our debt snowball.

Tax Refund Deposited and Most Used to Pay Down Debt

We are using the “debt snowball” method of attacking our debt.  Some financial gurus suggest paying the highest interest rate debt first (Suze Orman) as it saves you money in the long run.  Others suggest paying your smallest bill first as it will motivate you to keep “gazelle intense” as you pay it off (Dave Ramsey).  We’re kind of doing a bit of both.  All or our little payments are going on to the highest interest rate card (a whopping 7.99%); so if I sell some books on half.com, once the money is deposited into my account I log on to the website and make a payment in the exact amount.  With our “lump sum” type payments we’re paying off smaller cards. 

photo credit: danesparza

We received our tax refunds this past week, a total of almost $7,000 between state and federal.  Obviously our withholding was wacky so I’ve adjusted it accordingly.  We took $5100 and paid off one card completely, woohooo.  In the past we’d have spent all of the money on something completely frivolous.  This year we’re only taking part of it for frivolousness.  :)  The other $1900 or so is set aside for a three night trip to Vegas. 

My husband has three nights comp’d at the Wynn Las Vegas so we’ve scheduled my parents and sister to watch the kiddos and we’re going out of town for tons ‘o fun.  Of course those that are following Ramsey’s plan would scoff at such silliness but I heard Ramsey on the radio the other day say that if the money for the vacation wasn’t an exorbitant amount when compared to annual income it is OK to put the snowball on hold if the vacation is paid for in cash.  I believe the caller was wanting to celebrate a 10 year wedding anniversary; well hubby and I have been together for ten years now (married for 7.5) so yes, we’re going to Vegas to celebrate our own 10 year anniversary of sorts.
photo credit: Zesmerelda

I have a pie chart up over at NCN Network showing the progress on our debt.  This isn’t *all* of our debt - I didn’t include our car nor my student loans.  Two years ago we purchased a “luxury sports coupe” - love that car, I call it my mini-van.  I can’t bring myself to put it up for sale although the $800/month it would free up would certainly make paying down the debt go much more quickly.  Perhaps I’ll have a change of heart in the coming months, we’re still new to this change of lifestyle.