Tag Archives: Snowballing My Debt

Milestone(s) w/ a funny story

Minor as it may be… we made milestone(s)!

In July I started with $82,985.14 of debt. The proceeding months we tacked on more debt due to school, etc… And we were also building our $1,000 EF account. So, during this time debt wasn’t being paid down.
I just realized that while updating my excel spreadsheet, we have gone below our original debt. We are now at $81,435.77.
Yeah!

Also, my husband finally got his break fixed on his motorcycle. We had set aside $1000.00 to cover this fix. Well, here is how it went (remember motorcycle guys are flaking. may work in your favor):

    Bike guy said he was going to charge him $200 and to pick it up Saturday at 12p.
    Hubby called at 12p. No answer, of course.
    Hubby called, called, and called. Finally gave up mad.
    Hubby & I went out on his bday date to movies at 4pm.
    Guess what?
    Yup, bike guy called at 4:15pm. Movie starts at 4:40pm.
    Impecable timing. Wouldn’t you say?
    Picked up motorcycle.

    Remember motorcycle guys are flaky.
    Bike guy does not write things down.
    Hubby says, “you said $140, right?” and hands him that amount.
    Bike guy looks at him with a funny look and says, “that’s what I said?”
    Hubby, “yes”
    Bike guy, “okay, then!”
    Hubby saves $60 and we go on date (w/o movie). 🙂

Yes, my husband feels guilty about it. But here is why I told him to get rid of feeling guilty. When we had the motorcycle put together, the bike guy told us $6000. When it was through he took us for $10,500. And that wasn’t due to ‘additions’. I would have put up a fight, but its either pay the money and get the bike or don’t pay the money and the guy has a $28,000 bike. What do you do?!

Like I said, the bike guy makes up numbers. Horrible business man, but a really good custom bike mechanic. So, I feel like we just got back a little of what we were overtaken for.

What did I do with the other $800?
$100 Christmas
$288.29 replenished our EF account back to up $1K
$411.71 balance remaining. I haven’t calculated a move for it, yet.

We will probably pay off the JCP bill we racked up during Christmas. I think it’ll be a good move. 😉

Make it a great day! ~MF

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Student Loan Payment

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So apparently, unbeknownst to me I had one last Student Loan check coming to me for $2205.00. I thought that I rec’d all money loaned to me and I was to start my journey in repaying the student loan. What I didn’t see was the second 1/2 of the disbursement was to be mailed December 17th equalling… you guessed it, $2205.00.

To Cancel or Not to Cancel is the question.

Well, I didn’t cancel and I will tell you why.

The $2205.00 was previously totalled on my spreadsheet for ‘Student Loan Debt’ (approx. $32,000 owed). So, it made more sense to me in using a lower APR student loan to counter act with the higher interest Credit Card bills. Now, because I already accounted for this money in my Track My Progress, it does bring the graph down a significant amount. I do enjoy watching the graph go down (as you will see on the 7th of January). 😉

What did I do with this money? I definitely calculated my move before paying things off.

Initially I thought of just paying down the 6th card, as it is naturally the current one on my list. But, in the end this would only free up $219 a month ($37 normal cc payment + $182 rollover cc payments) to rollover to the next card (7th card).

I wanted to make a larger move. Especially, because my husband and I have been considering buying a rental property. But realize that we need to pay off more debt quickly. Even though our credit scores are pretty good, our Bad-Debt-to-Income-Ratio (BD2IR) is much too big. If we are going to buy a rental property, we want to do it right.

original payment plan*

Anyhow, back to the story. I wanted to make a larger move. And here is how I did it:

updated payment plan*

I paid a last payment of $203.51 to my Ortho bill = PIF ($2205 – $231.05 = $2001.49)

This freed up $100 per month. This bill is not part of my CC repayment schedule. And this will go to increase our Weekly Cash Allowance Fund – which we use for groceries, gas, entertainment, and any other little expenses that come up.

I took $100 spending cash. ($2001.49 – $100 = $1901.49 left)
I paid my monthly FFCU visa payment of $65. ($1901.49 – $65 = $1836.49 left)
I paid $1836.49 to my FFCU signature loan that has a monthly payment of $299.
($2858.43 – $1836.49 = FFCU sign. loan new balance $1021.94)

Recap:

FORMER: BofA monthly payment $37 + $187 = $219.00 (once pd, $219 would rollover to the next CC bill)

UPDATED: FFCU signature loan monthly payment $299 + $187 = $486.00 (by paying this card off, I will have $486 to rollover to the next CC bill!!!)

The remainder of the FFCU signature loan will take me roughly 1 1/2 to 2 months to pay off the balance. I will then be able to rollover $267.00 more dollars per month onto the 7th Card using the Updated plan versus the Former plan ($486 – $219 = $267).

I hope this makes sense to you. I have yet to figure how much interest and time I will be saving, but I am sure it is significant enough validate the changes I have made. I will be sure to update you when I do figure it out!

Did everyone have a wonderful Christmas? I know I did. It is one of the two times a year that family members make those delicious, memorable dishes to eat. Since my family is soooo multicultural, I get to experience a lot of variety in our food dishes. It makes that all the more delicious. But, I am also aware that I am seriously going to need to diet after New Year’s Day! 🙂

Make it a great day! MF

*spreadsheet totals are not exact, but used more for reference material.

5th Card All Gone!

Quick Note:

I officially ERRADICATED the 5th Card! Woo Hoo!

This is the Card with the offer for the 0% APR good until Oct 2009. So, my next card to erradicate has a $1001.05 (hubby’s business trip). I will be transferring this balance onto the 0% offer. And onto the 6th Card! Here we Come!

Happy Weekend!

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What I Did Today… Snowballed!!!!

Actually, I decided to payoff some of the CC’s with a student loan that was much lower in interest rate.

Note: husband also received his reimbursement for his Florida trip:

Costs of my husband’s work trip to florida: $1001.05
Reimbursement: $1001.05 PIF

Okay, student loan check senerio:

Recieved Student Loan check @ 6.8% interest: $4410.00

Do I use it to payoff some higher interest cards or send it back to the loan company?
Well, as you can see, I decided to use it, with my reasonings below:


Before Chart (Click to Enlarge Pic)

I completed Ramsey’s step 1 and funded our Emergency Fund: $1000

Paid off balances w/ higher interest rates:

  • Home Depot (21%): $189.78 PIF

  • Khols: (21.9%): $563.64 PIF

  • Best Buy (18%): $669.25 PIF

  • JcPenney (21%): $1062.93 PIF

  • BofA (13.24%): $1000.00 PAID (remaining balance: 767.38)

    • After Chart (Click to Enlarge Pic)

    By using my student loan @ 6.8% interest,I managed to:

  • pay-off 4 cards
  • pay more than 1/2 on the 5th card
  • cut out 4 bills to pay!
  • I also managed to save $55.83 in interest this year

    • (4 cards = $567.96 annual interest rate divided by 12 months = $47.33 x 2.5 months left in the year = $118.33; $4410.00 x 6.8% = 299.88 divided by 12 = $24.99 x 2.5 months left in the year = $62.48; so,$118.33 – $62.48 = $55.83). Did you get all that??? 🙂

    Hey, it’s $56 saved. It’s worth it to me and my family. Because, if I was accounting for the 5 years of paying down my Snowball schedule, I would save $1076.85 in interest payments all together (4 cards = $514.75 interest per year; student loan = $299.38 interst per year; $514.75 – $299.38 = $215.37 x 5 = $1076.85).

    But, that is not all. I have now created an extra $182.00 month payment to go towards paying down the 5th card. That is $37 + $182 = $219 per month to pay down a balance remaining of $767.38. Booyah!

    Oh ya, and I get to put our 5% savings from the paycheck to the snowball schedule/bills (approx. $270 per month)! So now, I have freed up $489 per month to pay down the balance remaining on the 5th card (and so forth)!

    So, now I need to prove that saying, “it takes money to make money”. Let’s see if this change will now speed the snowball process. Hmmmm????

    Do you think accepting/using the student loan in this manner was for my benefit? Love to hear what you think! See comments for further clarification. 🙂

    I’m starting to get the ball rolling faster. It’s exciting. ha! Happy Tuesday, y’all! Happy Tuesday.

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    Revising the Data – The Ramsey Way

    I just finished reading Dave Ramsey’s book called, The Total Money Makeover. I was quite impressed (I will blog review the book in a later post). So, I have decided to follow the beginning 3 ‘baby steps’ of his book in order: Save an EF of $1K, Snowball Debt Quickly, and finish funding EF w/ 3-6 months worth of expenses.

    You will see on the right that the 3 bar charts have been Revised. The Emergency Fund goal has been reduced to $1000 (which according to the book should be funded by 1 month’s time). The Combined Debt is my Phase 1 + Phase 2; this will be paid as one, now (see the mass amount of Blecky Debt???). It equates to 126% Bad-Debt-2-Income Ratio (see previous blog posting). The Summer Fund – previously I was using this amount + my EF as a combined Emergency Fund Amount. I have now seperated them. The Summer Fund is used to pay for increased Summer Day Camp funds for the kids.

    I think its easier to read this whole picture.

    $665.17 in my Emergency Fund
    $316.34 in the Summer Fund
    $91,000 of Debt!

    So, if I prove I can get my family out of this mess, than seriously I know that anyone can do it!

    Just think positive! Hi-Ho, I am onto Week 8 of Erradicating Blecky Debt!
    Happy Monday! ~Christine

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    Family’s Debt – Revised and in planned Phases


    I had to revise our budget (again), go over it with a fine-tooth comb & put the debt repaying into phases. I was told that it takes 3-4 months to get the kinks out of a personal budget to make it work. If, I am still revising our family’s budget after that amount of time…then something is wrong. It will be almost a month…month tomorrow, in fact. I am getting better at this debt tracking thing. Condensed tracking in more efficient terms.

    Here are problems that arose recently (I think I have ADHD, I’m anxiety ridden, or just plain fidgety because I review things a lot to find nuainces [or change my blog header alot!]). Perhaps, that is why I am good at my job in cancer research.

    • We were ‘choking’ trying to keep within the cash allowance. Taking funds from our FF/EF to cover the negative cash allowance total.
    • My ‘other’ bills did not account for the fact I was putting money into savings or the freedom fund.
    • Essentially I am shorting the financial funds available for my family. Not good. How is that going to work?

    So, here is the revisions (w/intentions to increase EF/FF in the near future):

    • I had to cut my freedom fund from $91 per week to $50 per week
    • Reduce the savings Xfer from 10% per week to 5% per week (at least we are still saving)

    Here is the Phases of repayment I was talking about:

    • Phase 1: Currently, consists of 10 credit cards to be paid down. I am snowballing these now – paying the monthly payment amount necessary. Will continue to pay that same amount even though the debt amortization decreases the payment. When one CC is PIF, that payment will go to the next card. Thereby, compounding the payment. Till all are PIF (ah, financial freedom – well, closer).
    • Phase 2: There are 3 bills I pay proactively (hence, not requiring payment at this time)
    • These 3 bills are on hold until Phase 1 is PIF. Reason being, we cannot pay all these bills in one consecutive phase. It make take us a bit longer, but we can breath a little and keep our sanity. Plus, these 3 bills hold the lowest interest. So, we are okay.

    Now you understand why my percentage (on the left sidebar) decreased, because it is only accounting for the 10 credit cards – roughly $60K. The other 3 proactive, but still owed accounts tally approx. $25K.

    By decreasing our freedom fund & emergency fund, we are increasing our cash allowance to $400 a week. This seems to be our average weekly amount spent on groceries, gas for the cars, and minor expenditures. And our Freedom Fund & Emergency Fund will only be used they are meant to be used. We will not need to touch this to use as an overdraft account (smack the hand, shame on us).

    I will be starting this all with tomorrow’s budget. So, let’s see how this works for us. ~Cheers!

    ps – received my other OT check! Darn taxes again! You get like 60% back and 40% to taxes. Well, I claim 2. So, that might have something to do with it.

    How long did it take you to make your budget work for you????