Debt Snowball

So I’ve decided it’s officially time to do something about this debt and stop complaining about it. I’m only going to get out of this situation if I make some sacrifices (eat out less) right now and it won’t take too long to pay off.

Basically, I have a high level of credit card debt that requires me to work two jobs on top of my business just to stay afloat. I could go into a whole long story of years of depression that led me to stop taking care of my business like I should have and going on wild spending sprees, but how I got here isn’t really important. Now that the depression is over and the excitement is back, it’s time to make some progress.

So the method I am following is the debt snowball. This is where you pay the minimums on all your credit cards, except the smallest one. Every extra bit of money you get goes into the smallest card until it’s paid off. Once you pay off that credit card, you celebrate your victory. Then start the process again on the next smallest card.

Now, this isn’t really efficient, considering that smaller card is charging you less interest. You really should start with the card that has the highest APR.. but if you don’t see some progress quickly, you’re likely to give up. So we’re going to start small with our American Express card, which I’ve figured I can pay off in two months if I pay $50 per week on it. I know $50 a week is a lot, but this card is the bane of my existence. This card is so hard to deal with I usually end up paying late fees and I just cannot wait until I don’t have to worry about it anymore. Once this card is paid off, it’s also a $50/mo bill I won’t need to pay anymore.

The second card has a low APR, but it’s the second lowest balance and therefore will allow me to have another $50/mo payment gone. That’s an extra $100/mo in bills freed up. I’m thinking that this card will be paid off within 4 months after the first one. Maybe sooner if I can stay on track. ¬†All of the other cards will be harder, they’re all over $1,000 – but I’m sure that once these two are out of the way, the bigger ones won’t be so bad.

Wish me luck!

Amy

2 thoughts on “Debt Snowball

  1. I wish the best of luck in getting your credit card debt paid off — I can imagine that you’ll be so excited about it once that first card is paid off!

    It’ll be so great when it’s all paid off and you won’t have to work so much just to keep up :)

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