This is how we eliminate debt!
For those of y’all curious about how the Dave Ramsey debt snowball can really work in real life to eliminate debts! OK, folks, gather ’round and I’ll map out the plan for killing that stupid truck note on hubby’s 2005 Chevy Colorado (bought new, of course…). Since this is supposed to be a surprise for hubby, and I know he’s reading this blog when he can…honey, just skip this post
The rest of y’all, check this out because I played with numbers this afternoon (math nerd that I am). Yes, these are real numbers, from the budget of a real person who ain’t rich (yet!). The only reason I haven’t slammed the truck note already is I am waiting on my financial aid to be applied to my tuition bill before I shell out the money to the college LOL
I have been sandbagging money since about April in preparation for this tuition bill, and currently have $2500 in savings and a $2100 bill for the fall semester. Score $400 or more so far :) Now, between $1600 for my GI Bill money coming in, my $1500 allotment, and my VA Disability payment of about $600 I can easily clear my monthly expenses of $1950…which leaves me with about $1700 to put the smackdown on that truck note from that angle. We’re up to a cool $2100 right there, plus hubby is slapping a $700 payment on it this month instead of the required $488. That baby is going DOWN! Quick fast and in a HURRY!
Now some of y’all just starting out or thinking of starting the Dave Ramsey plan are probably scratching your heads wondering just how I have come up with that much extra for the month. It’s that debt snowball in action. Back in January I paid off my car which freed up $236 a month. In February I paid off the line-of-credit at my credit union, which freed up another $100 per month (running total $336 so far…). Later in February, I used my tax return to pay off the Chase Master Card, freeing up another $50 a month ($386). Then I set my sights on American Express, finally killing it completely on the 1st of June, freeing up yet another $100 per month ($486). And last month I dealt the death blow to that pesky AAFES Star Card, which frees another $150 per month for our budget ($636!). Add that to the $600ish I had above monthly expenses that I “found” when I started budgeting…and we are up to $1200 per month above expenses that can go towards killing off the target (and LAST) debt: the truck note.
Once you get “traction” and are no longer spinning your wheels on minimum payments, that snowball really starts rolling and you can see results. Man, I really do wish I had learned this in high school!