The Specifics

The worksheet I used to help determine when we would be able to pay off our debts using the Snowball strategy is at: http://www.vertex42.com/Calculators/debt-reduction-calculator.html

It is a very powerful spreadsheet that runs you through different strategies for paying down your debt. You can sort them in order of amount, interest rate, or a custom order. It will also calculate how long it will take only making the minimum payments without using the snowball formula. This one gets pretty depressing showing how much you will pay in interest and how long it will take.

Using the Snowball Strategy with paying down the smallest debts first we would be out of debt completely with the mortgage paid off in May of 2019.

Using the strategy of paying highest interest first we would be done in May of 2019, however we would have paid approximatly $2,000 less in interest.

If we simply pay only the minimum payment and do not apply the debt snowball strategy we will be done paying everything off in Feb of 2034, and pay over $160,000 in additional interest!!! Now that is depressing!

If we can stick to the plan and apply additional payments to our debt reduction plan as our pay goes up and we sell items we no longer need we should hopefully have everything paid off by 2015 or so.

I have already started to sell off things we really do not need. $135 for 3 items so far. I am working on Sherry to get the list of Papmered Chef items ready to sell as well has her baby grand piano. She still needs to get it tuned and appraised. A rough appraisal over the phone has it valued at approximatly $1500. But until he comes to tune and sees what the condition of the piano is we will not know for sure.

It is a George Steck Company Piano, I believe circa 1950, so it is solid wood, not the partical wood used today. If you are interested just let us know!!

Lets Get it Started!

OK, today is the official start of our “climb out of debt”. We are documenting all of our revolving debt, home equity loan, and mortgage. Sherry and I have been talking about the mistakes we made to put us in the situation that we are in now. It was not hard to see the big culprits such as building a new home before the old one sold, building to large of a home when we only had one child and planned on two incomes, vehicle purchases and all the eating out. There are a multitude of smaller sins that have added to this debt, but I do not have enough time to list them out.

We never regret Sherry staying home with the kids. Our mistake was not planning earlier for her to stay home with them, and then not making adjustments after we made the decision. It is a hard decision to sell a “dream” house that you designed yourself. However in the end the dream was not so sweet!

Now that we have all of our debts documented we are working on a workable “debt snowball” plan to pay them off. This link from Dave Ramsey does an excellent job of describing the process and the emotional aspect of it. There are many debt snowball worksheets and calculators out there. I am looking for the one that will suit our needs the best. Once we decide on one we will post the link and our expected date of being debt free. I will also post more of our tactics and tribulations. It is guaranteed there will be some tribulations as Murphy is always around the corner lurking!

Anyway! Pray for us and check in on us from time to time to help hold us accountable!

Thanks!!!