Wednesday, January 6, 2016

Debt Snowball

First let me just say that I'm a little embarrassed to show my debt snowball.  We used our credit cards to pay for home expenses, travel expenses, and every day expenses that we probably could have done without. After reading Marie Kondos "The Life-Changing Magic of Tidying Up" I realized how much stuff/excess I already have and that buying more "stuff" will not make me happier. It also made me realize that I should only buy things that will fulfill a purpose but that will also make me happy. A recent example for me was buying a much needed pair of pants. But instead of just buying the cheapest pair of pants I could find I bought a pair of pants that were a little more expensive but I knew I liked them and would wear them because they fit well and were comfortable. So instead of just buying a pair of pants that I might get rid of in a year I bought a pair that would last me longer and that I would enjoy wearing. So part of baby step two will be cutting out unnecessary spending and being happy with what I currently own. It doesn't mean I can't buy things I need or want it just means that I will be pickier about what I buy, same goes for my husband since he also has wants and needs. I factored some personal spending into our budget.

Now for the debt snowball:

As you can see we have a long way to go but I like breaking it down into smaller goals.
Card #1 paid off in 2 months
Card #2 paid off 6 months after Card #1
Card #3 paid off 3 months after Card #2
Card #4 paid off 5 months after Card #3
Card #5 paid off 5 months after Card #4

By looking at it this way the goal seems much easier to accomplish. I plan on celebrating/rewarding each small victory by allowing ourselves to either buy something we have been wanting within reason or by going out to eat somewhere nice but without cutting into our debt repayment money. That way we feel like we are accomplishing our goals. I will update our progress on a monthly basis and see what has been working and what needs to be adjusted. I also plan on paying additional payments when we get extra money or we don't spend all of our budgeted money for the month. If we stick to this plan we will have our credit cards paid off by October 2017 or 21 months.

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