October 16, 2022

I picked something to NOT do this week – “no new debt incurred.” Sounds easy enough, right? I get points for doing nothing – yay! We’ll see though. This one has to be a team effort. My husband and I are not so great about spending within our means, and we’ve spoiled ourselves and our daughters, unfortunately. But we’ve started Dave Ramsey’s baby steps (again!), and have already accomplished baby step one – save $1,000 for your starter emergency fund. 

Baby step two is to pay off all non-mortgage debt using the debt snowball. I’m not sure this qualifies as a “baby step” for a lot of people. For us, it’ll be a five-year-long marathon of disciplined, focused budgeting. The debt snowball works by focusing all of your extra resources on paying off the smallest debt first while paying minimum payments on all other debts. The idea is that when you pay off a debt relatively quickly, you will be bolstered to continue on the program. Once the first debt is paid off, you add that payment and all excess resources to the next-smallest debt. Like a snowball, your debt payments grow bigger and bigger as you work from one debt to the next. 

I won’t tell you how much we owe (too much!), but it consists of credit card debt, student loan payments, and a HELOC that we took out to help pay for a house remodel project a few years ago. To pay all of that off, we plan to cut back on expenses, by cutting some media subscriptions that we have but don’t use much, creating and sticking to a strict but realistic budget, and most importantly, not incurring any new debt. We also plan to increase income, by selling things like our old refrigerator, old bicycles, furniture and other items, increasing my work hours (I am paid hourly), and catching up with some back tax filings that we need to do (expecting a refund). 

I’ve heard that if you take “no new debt” day by day, then you can really work hard on those particular days where it’s a stretch, and just make sure you get by for one day. Then, the next day, do it again. Hopefully, we can do this without big stretches, but if we need to, we’ll gather all possible resources to keep from going further into debt each and every day.