Getting Out of Debt (Slowly BUT Surely)

Debt Snowball

My husband and I have big dreams (maybe not big to you but big to us). We want to build a brand new house! We have never owned our own home and we are tired of renting. Tired of not being able to paint, organize, improve, and make the place we live OUR home!

My husband has a great job (he is a city letter carrier for the United States Postal Service) and he makes pretty good money BUT we are a family of 5 trying to live on one income in a two income world. Now before you go thinking that I am going to blame our financial woes on the economy or the President or the cost of living in America I AM NOT! I blame US. 100 and 50 percent  I blame our bad money management, our bad decisions, and our lack of self-discipline (Just keeping it REAL).

However, we are tired of paying for those mistakes to a tune of 1575 dollars a month in RENT! So we have decided to pay off our debt, clean up our credit, save up for a down payment and build a house! WOW that was really easy to type, wish it was going to be that easy to do!

We are working on getting ourselves on a budget (where every dollar has a name, thanks Dave Ramsey) and paying off our debt. So far we have paid off two small debts.

Sears (we bought a refrigerator last year) $83 a month

QVC (we bought a printer a few months back) $32 a month

Now the plan for that $115 dollars a month is to get us out of a payday loan that we took out almost a year ago! If you have never taken out a payday loan then listen to me DON’T EVER DO IT! And if you have taken one out PAY IT OFF AND THEN NEVER EVER TAKE ONE OUT AGAIN! This is one of those STUPID financial mistakes (that I mentioned earlier) and now we pay $112 dollars a month in interest. Say it with me STUPID! So we are working really hard to get this paid off! Paying $115 dollars extra to the loan every month means the loan will be paid off in 6 months! I sure would like to pay it off sooner than that but as long as it is paid off in 6 months I will be happy. My husband and I have committed to paying more every month if we can (I will keep you updated on our progress).

We also have a store credit card (we bought a computer for our oldest son) $50 a month. We will continue to make the payments on that until the payday loan is paid off and then we will be paying $227 a month extra on that bill until we get it paid off. The $227 comes from the $83 (Sears), $32 (QVC), and $112 (Payday loan). This is what Dave Ramsey calls the “Debt Snowball“.

We also have a car loan of $450 a month. I need to find out the actual amount owed.

And my husband has a student loan that is $160 a month and I have no idea how much we actually owe on that eiher (Guess I better find out).

That is all of our debt (I think). Once we have the payday loan paid off we will pull our credit (did you know that you can get one free credit report a year from each of the three credit reporting agencies) to make sure that we have not missed any bills.

I will be posting monthly updates on our Debt Snowball and our progress toward building our own home!


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