Friday, May 21, 2010

The Debt Snowball

Since staring this whole process, there has been an elephant in the room. A great big something that no one wants to address. My husband and I have both committed to living greener and more simply. We want to be happy with less. But we are both having some difficulty with the "less" part. Whoever said money is the root of all evil may be on to something.

I'll spare you the gruesome details, but we have a fair amount of debt. My student loan balance is enough to make you gag, and it's only one of many. We've tried to get out before but we never made it longer than a month or two. But this time, it's different. I want to live BETTER. This is the only life I get. I don't want to spend it worrying about making payments or wondering where my next check is going to come from. My husband makes a good salary. There is no reason for us to be living above our means. The money he brings home is more than adequate to sustain us. So why are we always out of money?

Last night, the two of us sat down and honestly discussed our finances. The first thing we did was write down all of our debts: loans, credit cards, ect...YIKES. We did it in permanent marker too! Then I listed all of our monthly bills. I take care of the bill paying and my hubby didn't have the slightest clue how much our electric bill averaged or how much we pay a month for internet service. To be equal partners in this endeavor, I felt it was important for him to see how much of our money actually goes out to maintain our lifestyle. We decided to adapt the  "Debt Snowball" method, popularized by financial guru Dave Ramsey. Basically, you put as much money as you can toward your smallest debt. Quickly paying something off is supposed to give you the momentum you need to keep going. When the smallest balance is paid off, you take all that money and apply it to the next debt. Here's a bulleted list (you all know how I love bulleted list) of our game plan:

  • We will have ONE checking account. Despite being together for almost seven years, hubby and I have never had a joint checking account. He did his thing and I did mine. No more. We need to be able to check up on each other for accountability.

  • We will put 10% of each paycheck in savings. We get paid weekly so there should be savings deposits four times a month.

  • Ramsey says to pay the smallest debt first but we decided to pay off our van first. We found enough money in our budget to double the car payment and can get it paid off by Christmas. Once the car is paid off, we'll have a sizable chunk of change with which to start attacking the other debts on the list, going smallest to largest.

  • We both believe credit cards are important to have in case of emergency. Instead of cutting it up, we froze it. Yep. Literally. We put in a little glass bowl with water and put it in the freezer. It's out of sight, impossible to use, yet can be chipped out if say, a tree fell on our house before we had enough savings to pay for repairs.

We posted the "List 'O Debt" in our closet so we will see it every day, more than once a day. As we pay things off, we will cross it off the list. This is going to be hard but I know it will be worth it.  All of the things I am doing, all the skills I am learning will mean so much more to me when I know that I can live completely free and truly simple. Wish us luck!

 Frozen Credit Card


  1. Hello Stephanie, I found your blog at Rhondas.I think you are doing a fab job for your family.Very disciplined well done.You are definitely doing your part as a homemaker.If all women did this the world would be a good place.But bit at a time people will watch you and want to change too.Keep up the good work.Linda Perth W.Australia

  2. Thank you for the kind words Linda! And thanks for stopping by. It means a lot!

  3. Hi Stephanie, I also found your blog at Rhonda's and I am amazed that we are on the same journey a world away from each other. Here is a link to my blog if you are interested in being blogging "pen pals"

    Much love and light on your journey,


  4. Hi Stephanie, I ALSO found your blog at Rhonda's! How brave freezing the credit card for real.

    I noticed a trend at your blog was simple living, and thought you might be interested in another blog as well.

    Check out Maria's Farm Country Kitchen ( It's a blend of good home cooking advice and simple living techniques that I think you would enjoy.

    Good luck with your debt paying process!

  5. Thanks for link Dana! I'll check it out.

  6. Alright, I'll get in on the action too and say that I also found you at Rhonda's blog.

    I identified with the comment you made the other day about living paycheck to paycheck and not having enough money when you're bringing in a salary that should be enough.

    My husband and I are also trying to pay off debt (mostly his, from before I met him) and feel like it has taken up our lives. We're also doing the debt snowball method but its a very slow process.

    Am now following your blog as I think I can learn a lot here.