Tuesday, June 17, 2008

Has Your Debt Snowball Stopped Rolling?

A few months ago I realized that I was NOT going to have any extra money to pay on my credit cards. This would mean that I would have to pay only the minimum balance which would mean I'd probably be out of debt about 5 years after I died.

So, I had to think drastically! I had to get myself really motivated to get the debt paid off. I am going to share some of the things I did to get it rolling again, along with some other ideas.

1. I stopped paying into retirement. NO I AM NOT CRAZY! I already have some money going in that is mandatory since I work for the state, so the rest was on my own. I was not getting a match for it. For me this is a huge motivator because I want that money IMMEDIATELY returned to retirement. So you better believe I will be doing all I can to get my debt paid off sooner than later. Also, I want to open a Roth IRA and I need a certain amount to open that, so once my debt is paid I will be putting the money toward that.

2. I changed my W4. That is the thing they give you when you first begin a new job. On it you select the number of exemptions you wish to claim. We get back an insane amount of tax money back, and I don't just mean a couple thousand... so we are withholding WAY too much. Now, I am not, and that money will go toward my debt. I followed the IRS worksheet but still claimed a bit less that I was eligible for. So I should be fine at tax time.

3. I took a summer job. I hated to do it. I hated it more than anything. But, I took on a summer job to go strictly toward my debt. I will get that money in two weeks and I am really excited about that. You could take on a part time job to help fund your debt snowball if you are really serious about it.

4. Sell things!! I am hoping to have a yard sale soon. I will be selling anything I can to help pay off my debt. I even have an original Nintendo WITH the box. I LOVE that thing, but I am not using it and I can now buy my favorite games on the Wii, so it has to go. I guess my SNES will have to go too. (Hey, if you are interested drop me a line!! Of course if you are reading this you probably need to lay off buying stuff, lol)

My husband sold his motorcycle which took care of that monthly payment and also reduced our insurance and taxes. That was a big help!!

5. Downgrade. This can be anything. Your cell phone, cable, satellite radio, or any unnecessary expense. I recently took Internet, text messaging, and navigation off my cell phone to save $30 a month. Actually, I only had it there for a month just to try it. We both recently downgraded our phones from Blackberries and are saving $100 a month now that I took off those extras.

6. Bundle services. Last year I bundled our cable, Internet and home phone. We ended up saving almost $85 a month. Not too bad!!

So, if you are serious, there are many ways to get the snowball rolling again. Try a few, you might be surprised!!


Shelby T said...

I just recently was able to make a big dent in my debt. I had been doing all I could (coupons, down-grades), and then got a full-time job. The daycare was a lot. But, I agreed to let my ex take our kids for the summer. I thought it would be good for them, but also I wouldn't be paying for daycare and I still get to keep the child support. So, i am taking the amount I would pay for daycare plus the child support and putting it directly toward paying off the credit cards I still owe on. You had originally had a "thermometer" that showed your debt (40K?), are you close to zero by now? I finally have mine down to about 15K, and I started at 25K last year. Love your blog BTW. I love the personal stories, keep them coming. It helps to show how to better apply your tips. Shelby

Jen said...

No I am still a ways off, but probably more like 30 K now. Of course that includes my student loans which are still way up there. We had to stop the snowball with the baby coming because I didn't want to add more debt with bills. So we saved all we could so that when she was born we could pay all the bills 100%. Right now I am just going round and round with the hospital and insurance companies because our insurance info was entered incorrectly and it has caused a lot of problems. Bills that should be paid already are making their 5th round through being filed. It is a nightmare!!!