Take Aim & Kill It
If you’re trying to take your debt out of your life focus is what’s going to get you there (though some extra cash won’t hurt!) Before I had a very well defined plan in place for removing all my debts I was attempting to pay down all my balances at the same time. Each month I would add 20, 30, sometimes 50 bucks to each of my debt payments to chip away at the balances. I noticed I was paying extra on everything but not making any significant progress (well not life changing progress anyway). So I took the Dave Ramsey “Debt Snowball” approach and it worked….it worked well.
I began adding all the extra money onto the one debt with the lowest balance and just paying the minimum that was required on the rest. (I did care about the interest rates because this stuff wasn’t going to stick around for long!) At this point it was around $300 that was being spread across 7 different payments each month. By this time my lowest balance was a Master Card with $1248 on it (one of our Master Cards that is). I was now dropping $420 payments on a $1200 debt – and that’s assuming I wasn’t able to whip any extra cash to add a little more fight to the battle! Once that was all wrapped up I threw that $420+ on top of the next debt’s minimum payments for a total of $525 and Round 2 was in full swing.
Have you tried the “Debt Snowball” approach yet? How did it work out for you?
...."so when I got home we had a talk and decided this money situation had to change. I didn’t know how I was going to change it, we were barely making enough money to cover the monthly payments so how the H-E-double-hockey-sticks was I going to fix it?"