“Debt Snowball” Archive
Jun
11
As I mentioned, I hope to finalize the details of my DMP this week so I can get the ball rolling on lower interest rates, a fixed payment that fits into my budget and a truly noticeable monthly reduction in debt. The plan and my budget are all made assuming that my salary is the only source of income that I have. That said, I will have a fairly decent bonus payout come September and my side income from the blog, my travel agent bookings and another potential side job should get me another $750 per month or so. The question is, how will I use this money to eliminate my debt. I actually need to inquire how ‘extra’ payments will work with the DMP. The best idea, at least from my perspective, is to use a snowball approach with the extra side income. I just need to ensure that paying extra directly to creditors won’t mess up the details of the DMP. I would imagine it wouldn’t but I do need to check. The first step with any side income will be to find a $2500 Emergency Fund but once that is complete I do plan on using a debt snowball to accelerate the DMP. I’m actually quite excited to be so close to having a real plan in place to deal with this debt. I’m actually looking forward to using ONLY my debit card and cash for my day to day existence. I should probably look into what banks have good rewards for their debit cards since I will be using mine so much. I wonder if I could somehow use my debit card to pay my rent and get frequent flier miles in the process. Anyone know if you can buy a money order with a debit card (using it as a credit card, i.e. no PIN). I could score myself almost enough miles for a free ticket to visit my daughter if this were possible.
Anyway, stay tuned this week for the details of the DMP. Again, I wont be able to reveal all the details regarding individual balances but I will be able to provide interest rates and the monthly fixed payment amount, which from the look of things is a lot but is manageable.
