So, as one of my goals for this year, I am focusing on a different kind of fitness… financial fitness. Now that I’m working full-time again, we are finally making this a priority. 

I think being financially fit is just as important as being physically fit… it’s no fun worrying about how you’re going to make your bills, and by managing your debts, you can take that out of your worry list.

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I spent a good part of this weekend working on creating our debt snowball spreadsheet. I learned about the debt snowball from Dave Ramsey.

If you aren’t familiar with it, the idea is that you figure out how much you can afford to dedicate to debt payments each month. Once you do that, you set up a tiered approach… you can either organize based on highest to lowest interest rate, or from lowest balance to highest balance. You pay minimum payments on all balances except the top one, where you put the extra money you have for debt payments + minimum payment. Once that’s paid off, you move on to the next one, rolling up all of the funds into that payment. 

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Sometimes setting it up with lowest balances first can help because you pay off those balances quickly… and get incentivized to get going. Once you get to the larger balances, it can be harder to pay off in just a few months. We’ll pay off our first balance in May (wahoo!), our second in July… and then our next won’t be until next year.

BUT, I realized as I was putting this together, it’s important to remember that it took you awhile to get to this place… so it’s going to take awhile to get out of it. 

In addition to credit cards, we also have a car payment and student loans. <— P.S., have I mentioned that I hate Sallie Mae?!

While it is overwhelming to see how far we have left to go, it feels good to have a plan in place and make progress on paying off credit cards. The funny thing with credit card debt,  is that you pay on it forever, but at that point, you don’t even remember what you had to buy. They are evil!

So, excited to finally make progress towards this goal and our financial fitness. I will definitely be bragging up a storm once we make some progress! 🙂

 

Have you heard of the debt snowball term? Have you done one before? 

Credit cards: Love ’em or hate ’em?



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