Category Archives: Snowball method

I agree with the pay minimum on everything

I agree with the pay minimum on everything but 1 and then put your entire extra towards that. With a little work and excel you can work out what would be the best payment plan for you. Do Google search for Snowball Payment excel spreadsheet. This is a tool that can really open your eyes to whether your timeline is on track and your payment style is optimal. On some you can put calculate saving by putting it in as a negative interest rate rather then a positive. Both Mary Hunt’s Debt-Proof Living and Dave Bailey have good information on Snowballing payments and how it benefits you.

I don’t think they said down size they said down grade which means purchasing a van of the needed size but a little older or a little less fancy so the cost would be cheaper. Moving in two years is important because of schools and usually in the long run a better idea then private as the cost with 4 kids will be huge. Depending on the ages of your kids better schools might not be a big concern until they are moving toward later 3rd grade where they stop concentrating on the basics and enrichment starts to be a big advantage.

That being said if your timeline slips a bit you can always add enrichment until middle school which peer pressure gets to be big and making sure your kids are in a peer group mostly bound for college is important. Also consider the move more important for schools then it is for house size. You might be able to move sooner to a similar size house on a larger lot which you can add on later when you have save the money for the addition. Sun rooms are cheaper additions then bedrooms and the girls can share a bedroom for sleeping and use the sunroom for a playroom or finishing a basement is another option.

There are a couple ways to pay off credit cards

As already was said, there are a couple ways to pay off credit cards, and either one is good. The key is to pick a method and stick with it. When you pay off the one credit card, apply that same payment to the next card, essentially creating a “snowball” effect of larger payments each month – more info on this method here.

With total debts of about $40,000 and at relatively high interest, I would consider applying all extra money–including the extra payment on the mortgage–to your credit cards first, then your car loan. Moving in two years sounds a little aggressive for being that deep in the red, so you might consider waiting longer than that. The suggestion of downgrading your van is a good one as well.

Keep tracking those expenses. Keep your savings intact if you can. Only use it for big-ticket emergencies that you can’t pay with your monthly income, like a big car or home repair. You’re doing all the right things…it will just take some time and you’ll be on much better financial footing!

Thanks for all the imput, Downsizing the van is not an opp. since we have 4 children, and the move is important to us to get the kids in a better school dist. and our house is too small for us.(the three girls share a room) My DH is looking into selling his truck and getting a car to save $ on gas…this is a big step for him. He is in the military and got a bonus, I was able to pay 1,000.00 to one card! I will keep reading and working on our debt.