There is nothing more stressful than worrying about paying bills. Once you’re happy about it being a new month, especially one that marks the beginning of the summer, your stomach drops about the bills you have to pay. Credit cards, loans, rent, car notes, insurance, utilities, etc. It all weighs heavy on you, but especially when you’re living off one income.

Since being laid off, we’ve miraculously been living off one income, with some assistance from unemployment, freelancing, small windfalls, and some family help as well. We reduced our living costs by moving to a place with less rent and no utilities, living around the corner from my husband’s job, and cutting my commute almost altogether since I have no job to drive to (only interview and visiting family). We’ve had our splurges, and admittedly, haven’t saved as well as we should have, but we’ve been paying our bills.

The fixed bills, I’m fine with, but it gets overwhelming when cash flow and doesn’t comfortably add up to necessary payments. We paid our rent, which is a relief, and our cable bill which went a little bit over. Some credit card bills are spread out amongst the month, when future paydays can cover it. But 2 speeding tickets are definitely going to put a damper on our funds, which causes a bit of anxiety.

I had a job interview yesterday and hoping to hear some good news about it by tomorrow. We agreed that if I get this job, we’ll make a few changes. We will continue to live mainly off my husband’s income for taking care of the rent and household bills. We will be putting about 80% of my (hopeful) income towards a debt repayment strategy: the debt snowball. I’m sure you’ve heard of this plan, made popular by personal finance guru Dave Ramsey, where you aggressively pay off one thing and pay the minimum on others until it’s paid off, and move on to the next. That’s the plan.

After doing some calculations, including the anticipated income from the new job, the interest rates and the balances of the credit cards, I found out several things:

  • There’s almost $6,000 in credit card debt (embarrassing)
  • I have awful interest rates
  • My two highest debts have the lowest interest rates
  • If we only paid the minimum amount, we wouldn’t be out of debt for another 6 years
  • If we do a debt snowball with the additional income, we can be out of debt in

I used a Snowball Debt Calculator at What’s the Cost and learned that with a debt snowball, the debt can be paid off in 8 months which is much more my speed. Check out the breakdown they gave me.

That’s actually perfect because that’s when our lease is up, and hopefully my credit will be in perfect shape to either buy the townhouse or buy a house. Granted, it won’t be easy, and this is IF I can dedicate $800 toward paying off my debt. Let’s keep our fingers crossed that this is possible. I also still have a car note, and a loan, which will be the next thing on my list of things to pay off, but as is the life of a 20-something with minimal personal finance knowledge before going into debt.

Have you done a debt snowball or are you doing one now? What’s your experience?

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