debt snowball ~~~ it works
. we have paid (or gotten rid of) about 20k in debt, while in nursing school, while living on 1 income. now that i have loans coming due (went to an accelerated bsn program and owe 48k in loans for 15 months of private university tuition)..... we will once again start the debt snowball. loans should be paid in about a year.
of all, you must make a budget (on paper, not in your head)
then, you need to commit to stick to the written
if you are trying to get out of debt, refuse to charge anything else
. use cash
. you would be amazed how much less you spend on groceries when you pay cash... because it hurts to spend actual dollars. don't even use a debit card - pay with cash. i can't explain it, but you will spend what you budget (or less than you budget) when you use cash.
make sure to include in your monthly budget the things that you buy once or twice a year... like new school clothes, taxes on your house if you don't escrow, car insurance, christmas (budget for it -- it happens every december)
track where you spend money - you would be surprised where you can scrape an extra $50 each month for an additional payment on your loan. watch the cokes, and eating out. we were spending about 150 a month on eating out --- my goodness. that is crazy!
every additional dollar you can scrape together, send it in on your smallest payment to get that debt paid off. then, when it is paid, use that allottment of your budget (what you were paying on that debt) and add it to the next debt (next largest balance). pay off the smallest debts first, then add those monthly payments to start paying off your next debt... that is the debt snowball....
order/buy (at the used bookstore -- be cheap).... get dave's books: my total money makeover, financial peace. they are great and give a lot of details. listen to dave on the radio or download the pod-cast. go through fpu (financial peace university) -- it is an awesome program for getting out of debt
. we are in the class now and we are planning to teach it next year. it works, you can do it. there is no quick fix, just living within your means and eating beans and rice for a while.
pm me if you have specific questions
- and i have a computer program that i can send you to see when you payoff your debt based on your interest rate, term, and you can vary the amt of additional payment each month. it is a cool program and it is free (you can download it from microsoft if you enter "microsoft and template" under any search engine).