I LOVE paying off debt!

Hi to all of my uber fab readers out there! I know I haven't been posting like I want (i.e. 3-5 times a week). Life has gotten so busy for me! Not only have the usual end-of-the-year rush at work and the holiday hustle and bustle started, but I'm actually beginning to plan my wedding!

But, to not lose sight of our focus, I have an update on my debt snowball progress: As of Monday, I paid off TWO MORE cards! Woohoo!!! Y'all, it's like I can't wait to get paid because I get EXCITED about paying off my credit cards! You know why?!?!? Because once they are paid off, I can use my money for whatever I want. And you know what I want! Yep, that's right. A FAT bank account. AND I don't have that chain around my neck! It's like being an independent woman! ***all my ladies, independent***

Anyhoo... I will update my networth info later. I'm a few days off from a month from when I updated it last. From now on, I want to update after I've paid my bills and the payments have posted for my credit cards. I guess I should do it on the last day of the month before payday then, huh?

Well, next up, I'll keep you posted on my wedding budget (and woes), Christmas shopping, and job search updates.

Oh, just in case you wanted to know, my favorite word for the day is Fiance'! LOL!

Who doesn't love a raise?

The State FINALLY gave me BOTH of my raises. One was my annual raise, and the other was a 2.5% raise to give my position a more competitive salary. I'm not complaining either way. After Uncle Sam got his part, and the State took its part for my "retirement," I'm looking at an additional $200/month. Not bad.

You already know the drill: That $200 has already been sucked up into my debt snowball! Which means I hope to reach my goals just a little faster. The faster I pay off the credit cards, the faster I'll be able to start paying for my wedding! *Grinning ear to ear*

Dave Ramsey's Step 2: Debt Snowball

After you save $1000 for an emergency fund, Dave Ramsey advocates paying off your debts using the "debt snowball" method. Basically, you take all of the income you have designated for debt reduction and pay towards your smallest debt. Once that debt is paid off, you roll that minimum payment and the extra payment into your next smallest debt until it's paid off. Keep doing this until all of your debts are paid off.


I've been using a modified debt snowball plan. When I first started, I paid off my smallest credit cards, and it was really exciting to see $0 balances! But after a while, I noticed that my minimum payments on the larger balances weren't making a dent in the balance because the interest rate was so high. I wanted to save some of the money I was paying interest on, so I decided to leave the smaller debts alone and focus on paying off the cards with the HIGHEST INTEREST RATE. This motivated me more because I knew I was not only paying off debt, but also saving money by cutting down the interest payments. Once I got a few balances low enough, I applied for a 0% interest rate card and transferred the balance. I'm not sure Dave Ramsey would advocate this step, but it worked for me. Now I can focus on the low balance cards with higher interest rates.

Since I didn't start this blog until October, it doesn't really show the progress that I've made this year. In January, I decided to get my finances in order. As of January 2008, I had 8 Credit Cards with balances (yeah, crazy right?) for a whopping total of $7,986.22. I'm shaking my head right now at it! I don't know WHERE that debt came from. A lot of eating out and unnecessary expenses. Credit Cards can be dangerous.

Since January, I've paid off 3 cards and consolidated 2 others. I saved $1,000 for my fit fund and paid off $3,729.22 worth of debt! I had some relapses in June and July, so some of my current debt is related to those indiscretions. *Sigh*

Anyways... writing out everything lets me see how far I've come (and how much further I have to go).

Dave Ramsey's 7 Baby Steps to Financial Peace

For the next seven weeks, I'm going to share with you a step from Dave Ramsey's "7 Baby Steps to Financial Peace Plan."

My dad has to be the biggest Dave Ramsey fan ever! He's always quoting something he heard on the Dave Ramsey show. But the guy has developed a great system that can work! Last January, I decided to take Dave Ramsey's advice (via my dad's preaching) and implement his 7 Baby Steps.

Step 1 - $1,000 to start an Emergency Fund

When I first started working after grad school, I decided to pay off my credit cards. I'd throw huge chunks of money at them, but I never seemed to make any real progress. Everytime I made a dent in the balance on my card, something would come up and I'd have to charge it, making my balance rise. It wasn't until I took Dave Ramsey's advice and saved $1000 BEFORE I started paying down my debt that I really saw progress. Now, whenever something comes up (like having an unexpected car repair), I don't have to charge it, I can pay CASH for it!

If I hadn't saved a $1000 emergency fund, I'd still be playing the pay-off and recharge game with my credit card. Now, each month I see the balances getting smaller and smaller! My momentum is building and I'm LOVING it!

Gotta love those 0% balance transfers

I've worked really hard this year to pay off my credit cards and I've made a lot of progress. Despite my progress, I still had three large balances on cards with ridiculously high interest rates. I tried calling the companies to ask for a lower rate but I was told they didn't have a lower rate to offer me. So, you know what I did? I double-timed my payments for one card and lowered the balance from over $1600 to just $200 in a little over a month. I'll pay off the remaining $200 by next week.

As for the other two cards, I took a risk and applied for an 0% interest balance transfer card. I was a little nervous about applying because I wasn't sure if I'd get approved or if would get a high enough line of credit. But things worked out for the best! Once I was approved, I called the companies again to see if they could work with me. My reasoning? I'd been with one company for over 5 years! Surely they could lower the interest rate to something reasonable. I told them about my 0% balance transfer offer (which has a very low APR after the promo period expires). No luck. After ending the call with bad credit card company, I immediately transferred the balance. So much for customer service.

The rest of my credit card debt will be paid off before the 0% interest rate expires. In the meantime, every cent of my payments each month go to lowering the balance. No more ridiculously high interest charges! I'm telling my money what to do!