Another Important Milestone
Today marks another important milestone. As I have written before, eliminating debt has been our primary focus since March of this year. Our plan has been very simple. Start with the highest debt and apply as much as you can over the minimum, and pay just the minimum on the other debts.
Once the first debt is paid off apply that payment to the next debt. So now you are paying the minimum plus the applied payment from the previous debt. You keep repeating this process until all debt is paid off. It’s what Dave Ramsey calls the “Debt Snowball Effect”. That’s what we’ve been doing and we’ve paid off all our credit card debt and today we finally paid off Dell, our last revolving account debt.
It was important for me to get rid of the type of debt. It’s the type you can easily get back into, (credit cards, store charge cards, revolving credit accounts).
All we have left is the two cars and the house. So it’s on to the cars now with “gazelle intensity”, that’s another Dave Ramsey expression.
Regards
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Congratulations! Only a little bit more left to go and you’re free!
Yes, Russell just a little bit more. Last night we were reviewing our budget and other than the house we will be debt-free by early next year.
Thanks
Excellent! Congratulations. Great work.
Regarding your mortgage and car payments, those are not things that you, or anyone, should be optimistic about in paying off in one year, or in a hastily fashion that you have exercised in paying your cards off. That just leads to unnecessary stress and it can be mentally harmful; They should just be habitual payments.
Don’t get me wrong. Worry about them? Yes. Worry about getting the money, or having a source of income, to pay them? Yes. Stress yourself that it’s not going to be paid off in one year and panic? No.
Aside from the advice, great work.
P.S. I was just thinking that maybe you could write something about non-profit, or for-profit, debt consolidation organizations. What your opinion is of them, and if they work or not.
Alexander, we are fortunate in that there is little financial stress for us because we budget. The timelines we set are based on projected income and expenses. Occassionally we run into unforeseen issues but those are rare.
On debt consolidation organizations I have been doing some research on these and will have an article soon.
Thanks for the input.