This January, as the year began, my partner and I have begun discussions and research into living together and buying a residence. As part of that I had to take a good, hard look at myself and my spending habits. A large amount of the debt I had accumulated had been because of circumstances beyond my control: from being out of work to helping my family or just not being able to make enough money to cover everything I needed. Another part, however, accumulated because I was trying to fill a hole that had been left in my heart after the death of my father. Somehow, for a brief moment in time, it made me feel that little bit better. Regardless of how I accumulated it, I had to recognize that it was ultimately mine and I am responsible for it.
I've never missed payments, of that I am proud of but I've never been able to get ahead with my debts either. Between bouncing from jobs due to layoffs and the expenses of having to upkeep an almost 30 year old car, including the gas needed to get to and from my jobs (I lived in a small town with little to no opportunities so I had no choice but to travel), there just never seemed to be a way to get ahead.
I turned to Pinterest - although I haven't exactly figured out the reason why I was trolling Pinterest for this - and searched for debt planning and relief. Instantly, I was flooded with Pins and links to different blogs and different strategies for relieving debt. The main strategies I came across were the Debt Snowball and the Debt Avalanche.
To break it down, the Debt Avalanche is where you throw all your extra money at the largest/highest-interest debt so you stop paying so much in interest rates.
The Debt Snowball, on the other hand, is the opposite method wherein you throw all your extra money at the debt with the smallest balance.
Throughout my readings, I personally prefer the aspect of the Debt Snowball based on the fact that it allows me to see victories. My mentality and my psychology is more affected by seeing these victories than if I were to attempt the Avalanche. It's almost, to me, like the Avalanche is the old way of thinking whilst the Snowball is the new way. Besides, I can imagine the Snowball rolling downhill and becoming a Snowman. Don't ask me why I get this image, I just do. So yes, Anna, I wanna build a Snowman.
I went out and purchased Dave Ramsey's book, Total Money Makeover, to further understand this method he helped to perpetuate. While he didn't invent the Debt Snowball, he's helped make it more widely known and I've read alot of people who are happy with the outcome.
Outside of Ramsey's book, I managed to snag a wonderful T-disk bound, purple leather book from Staples for a clearance price and print off some budget sheets to throw into it to help me keep track of everything. From there I began to do the math against my debt using the Snowball method.
My work affords me a guaranteed schedule of three days a week, although I gain additional days based on how busy we get. Using only my guaranteed days as a starting base, I charted out my debts, their payments and then charted out my fixed and variable expenses for the month. I was able to determine that if I managed to stay on track, I could potentially become debt free within 1.5-2yrs. Knowing that when work gets busy again, - I mean every work place goes lean for about one to three months after the holidays - I could earn additional funds that I could throw at my debt would mean a faster payoff.
And thus, I have awoken from the debt-coma© I've been in for the last number of years.
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