Our Debt Snowball/Baby Step No. 2
We used the debt snowball method to pay off our debts. It started with listing our debts highest to lowest then paid our lowest debt up to the highest debt. Each time we paid off a low ranking debt, we used the money that would have been used for that payment to throw at the next item on the list.
Nothing was off limits! We first combined our bank accounts, then drained it down to $1000. YES! ONE THOUSAND DOLLARS! That was our cushion in case of a small emergency. Any money that we found, received from gifts or sold items for went straight to our debts for 9 months. No eating out with friends, no movie dates & no brunch after church. I felt extremely leery with only having $1k in the bank between my husband and I, so for the month of March’17 we agreed to beef up the savings to $1500 before paying off our motorcycles.
Everything came down to the budget. In all honesty, everything came down to how badly we wanted to get up from under payments the rest of our lives. In turn, this want pushed us to communicate to one another and adhere to the monthly budget we set forth. Like clockwork, we sat down at the beginning of the month to discuss our fixed and variable expenses that were due. Anything that was not on automatic bill pay was paid in cash that was withdrawn from the bank. Once the cash was used from our envelopes…POOF! Gone for good.
Take a look at our debts and payoff schedule and don’t forget to head over to my current monthly budget here.
