Snowflakes Continue to Pay-off Debt – July Goal Met!

For those of you following my July goals, #2 on my list was to pay-off $8,000 in debt.  I have a Capital One card at 14.9% that I’m attacking with a vengence using the debt snowball method.

On Monday I gave you the debt-busting update where month-to-date I had paid off $6,856.77 … leaving $1,143.23 towards my crazy goal.  I’m happy to report that more of my items sold on Craigslist within the last 48 hours.  Yes, 2 ceiling lights, 2 CD towers and my CompuTrainer…used for indoor cycling/training sold and today I’ll take $1,300.00 to the bank! 

This brings my monthly debt pay-down to $8,156.77.   I have more things on Craigslist and an evening focus group that is estimated to pay $150.00 before the end of the month.  Yippee!

As for the Capital One card?  Applying the $1,300.00 plus tossing in $13.94 for luck, I’ll be down to an even $6,300.00.  I never would have thought I’d be down this much in one month just by focusing on one account at a time.

Call it obsessive compulsive, call it crazy.  I call it paying less interest to da man.

If you are trying to put your financial house in order and need a little inspiration… stay tuned!  There’s plenty of encouragement on budget updates from Kelly and Twiggers, a debt-paydown powerhouse.  There’s plenty to learn from everyone out there… plus get a few cheerleaders to help you along the way.

Debt-Busting Monday – Found Money

It’s been a busy weekend of organizing, listing items on Craigslist and crunching numbers.  From #6 on the 6 Ways to Pay-Off Debt Quickly – Found Money!

Over the weekend we sold the kitchen sink (seriously) that was somehow leftover from construction.  After being on Craigslist for a month, it sold for $225 which was great.  Add to that the $75 from a focus group, selling back vacation time and an assortment of miscellaneous items on Craigslist I was able to transfer $5,933.97 to the nasty Capital One card. 

This leaves a balance of $7,613.94 at 14.90%.

One of my July goals was to jump start the snowball debt payment process and pay-off $8,000 worth of debt.  Between my first few snowflakes and this weekend, I’m up to $6,856.77… leaving $1,143.23.  With only 11 days left in the month I’m somewhat confident that I’ll get close to the monthly goal.

I have another $2,500 – $3,000 worth of items for Craigslist and eBay.  That’s if they sell at the amounts I’m hoping.  I have 15+ items yet to list.

It really does pay to focus on ONE account at a time.  Yes, it is all-consuming on the brain, but it works. 

Need more inspiration?  There are a number of people out there who have found themselves into debt and through grit, determination and a little creativity, getting themselves out. 

How to Payoff Debt Using the Debt Snowball Method

Once you have made the commitment to stop increasing your debt-load, the next step is to setup a plan to payoff your debt.  Specifically, non-mortgage debt.

The method was made popular by Dave Ramsey’s 7 steps for getting out of debt and getting your financial life in order.  The plan is quite simple, takes very little time to setup and most important – you can see results on a regular basis to keep you motivated and on the wagon.

Here’s how the Debt Snowball Plan works:

  1. List all of your non-mortgage debts in order of smallest balance to greatest with the minimum payment on each.  I also list the interest rate on each.  If I have two similar balances, I list the highest interest rate account first as shown in the example below. Note: Ramsey’s plan states you should focus on balances only as debt snowballing is about behavior modification… with 0% cards I have to disagree with him so this is my modification to the plan.
  2. Determine how much you can pay towards your debts each month.  Make the minimums on all of the accounts except for the first account (smallest balance) on the list.  Put any and all extra money towards this account.  Maybe it’s an extra $50 a month. 
  3. Once the first debt account is paid off, take the money (minimum payment + extra) being paid on  account #1 and apply it to what you were paying on account #2.  
  4. Repeat until all accounts are paid off.

Snowball Debt Payment Plan Example

By paying on the smallest balance first, you see progress which helps you stay motivated.  As the amount of money you can apply towards debt increases, balances decrease and suddenly the last account balance doesn’t seem so daunting.

For me, it’s focusing on that first account.  Trying to juggle all of the balances in my head is overwhelming.  By having the goal of paying off the first account, I target any and all found money (snowflakes) onto this account.   

First Big, Fat Snowflake in July

It’s snows in July – at least in my household.  I’m making progress on my July Budget Goals.

Since July 1 I was able to sell some items on Craigslist to pay down debt –

  • Desk lamp $35
  • Bathroom sconce $75
  • Ceiling light $50
  • Misc. Furniture $600

In addition to this, I rounded up all of the loose change in the house and cars, including the change jar.  I wrapped it all up and took it the bank yesterday for a whopping $162.80. 

I was pleased with the amount until my statement arrived yesterday and the interest on my Capital One 14.90% card was $160 for the month.  Grrr.  I’m more determined than ever to pay this puppy off ASAP.

On a brigher note, I did transfer $922.80 last night to the Capital One card.  That’s a nice, juicy snowflake!