The Road to Debt Freedom!

Baby Step #2- The debt snowball from Dave Ramsey's book "The Total Money Makeover" has been my method of reducing the $55,000+ in unsecured debt that has overwhelmed me.

This method, for me, works! I put the lowest balanced debt first and then in increasing order, have been paying them off, one by one.

While paying minimums on all, I put every extra penny into paying off the lowest balance first. Then after the first debt is paid off, I add that payment, to the next lowest balance payment....voila!...the debt snowball.

As I currently stand, I started the debt snowball process in February of 2008. The original balances were as follows:

VISA #1: $325
Nordstrom: $325
Home Depot: $1200
American Express: $2500
VISA #2: $2600
Personal Loan: $4500
Auto Loan: $13,000
Student Loan: 13,450
IRS: $17,350


I am proud to say, that as off this Monday, All of my credit card debt is paid off! Woo Hoo! Zero, Zilch, Nada! No More Credit Card Debt for me!

The debt snowball method works if you are committed to it, focus on your spending habits, and sell everything. With your spending plan, you can "find" money to apply to your debt. You also, can E-bay, Craigslist, and sell stuff to get more money to apply to debt.

I mentioned snowflakes before. Well, what is a snowball made of? Snowflakes, of course. Any small amount of money can be a snowflake that you can apply towards debt. I save change, recycle, work overtime and earn extra income when I can to put towards debt. I even pickup change in the street!

Recently, I debated about an old pick-up truck I had on my ranch. But after watching Dave Ramsey on television, I decided that it had to go too!

However, I still have more debt to pay off. During the last year, I have been able to pay a significant amount towards the larger debts. With regular payments, and putting my tax refund towards IRS debt, I have been able to do the following to the remaining debts:

Current Balances:
IRS: $3900
Personal Loan: $4500
Auto Loan: $6405
Student Loan: $12,900

As you can see, I still have quite a ways to go. But with a significant amount of income free from paying on five credit cards, I am now applying all of those payments along with the current payments to the smallest debt. With this plan, I should be debt free by February 2010!

February 2010 and debt free except the house! I am excited.

So to summarize: $55,250 initial debt.
: $27,705 current balance.
: $27,545 paid.

Half-way there and still Baby Steppin'! Thanks to inspiring blogs like Get Rich Slowly, My Money Memoirs, Money saving Mom, and of course Dave Ramsey!