Saturday, March 19, 2011

Our debt snowball

The final task for the weekly challenge this week at A Bowl Full of Lemons was to create our debt snowball. As I understand it, a debt snowball is a list of my consumer debts and their balances. I believe they are supposed to be listed in the order I plan on paying them off. Dave Ramsey recommends you pay them off in the order of those with the lowest balances first, regardless of interest rate. I just can't do that. One of my credit cards has a zero percent interest rate. There is no way I'm paying towards that while accumulating interest on my other card. I understand the philosophy behind that thinking, it's just not for me.

When I started getting my money act together at the end of 2010, I created a list of debt balances. A couple weeks ago, I updated that list. I just didn't know it was considered a debt snowball. I updated that list again today. It was depressing when I did it last year. It was depressing when I updated it recently. It was only slightly less depressing today because we should be getting our tax refund soon, which will allow us to pay some of it off.

In addition to being depressed about the bleakness of the situation, I'm very annoyed. You would think (or at least hope) that the total today would be less than the total from 2010. It's not. That's frustrating to me because I feel like I work really hard at being frugal. Not everyone in my house can say the same. (I plan on blogging more on that Monday.)

At this rate, it's going to take a long time to pay it all off. I've looked at our bills and there really isn't much more we can cut. I've got cable & internet reduced, I looked at the phone bill, our cell phones are on my parents' plan, we've canceled our newspapers. After paying our bills there is very little left for paying down our debt.

In order to pay this off, and do lots of things we want to do (like travel and do work on the house) we are going to need to make more money. My husband gets a raise in the fall but we are going to need more than that. I knew I was going to try go back to teaching this fall. Now, I realize I need to cast a wider net and be less choosy when it comes to what jobs I will be interested in than I might have been if we didn't have this debt.

I look at paying off this debt like weight loss. It's easier (and more fun) to put it on than take it off and it takes a lot longer to take it off than put it on. I'm not a very patient person when it comes to things like this. I want to take care of it now and it just isn't that easy.


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