Six Figures and Broke » Suze Orman http://www.6figuresnbroke.com Getting Out of Six Figures of Debt with a Six Figure Income Wed, 15 Oct 2008 18:45:32 +0000 http://wordpress.org/?v=2.5 en Tax Refund Deposited and Most Used to Pay Down Debt http://www.6figuresnbroke.com/2008/02/tax-refund-deposited-and-most-used-to-pay-down-debt/ http://www.6figuresnbroke.com/2008/02/tax-refund-deposited-and-most-used-to-pay-down-debt/#comments Sun, 24 Feb 2008 20:35:51 +0000 BigSpender http://www.6figuresnbroke.com/2008/02/tax-refund-deposited-and-most-used-to-pay-down-debt.html SHARETHIS.addEntry({ title: "Tax Refund Deposited and Most Used to Pay Down Debt", url: "http://www.6figuresnbroke.com/2008/02/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. 


Creative Commons License 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.
Creative Commons License 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.

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