Saturday, July 10, 2010

Baby Step 1 Complete ... now on to Baby Step 2!

Wow it's taken so much longer than expected to complete Baby Step 1 and move on to the snowballing part ... but we're moving on FINALLY! We are Baby Step One Graduates!!

Baby Step 1 took us 6 months to complete. Why that long? Life just kept happening. You can read more about that in my last budget post, 5 Months of Ramsey.

Baby Step 2 is going to take even longer to complete ... not factoring in "life happening" events it should be completed in 2014. We have $58565 of debt to eradicate in this step (and that's not including the house). Geez $58565 where and when did did we rack that up? Stuff just kept happening and we weren't prepared for it. Also $37231 of it is a student loan incurred by The Husband putting himself through college, way before we met. I earned my degree in the UK and thankfully it didn't make a dent in the amount he had to borrow!

So how do the debts look and what order are we snowballing them? This should help you all understand (please keep in mind that we will be snowballing an extra $390 from this month):

Would it make more money saving sense in the long term to snowball largest interest rate to smallest? Yes it would. But we are people that gain accomplishment and keep on track from quick results.  This is why we chose the Dave Ramsey method. It works for us and our personalities.

I cannot wait to report back with how this goes. For now though we are sticking to the Gazelle Budget and Envelope System through The Total Money Makeover system ... but more on those in the future.

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