Tuesday, April 17, 2007

Thoughts on Debt Reduction

I have gotten some advice from people on fine tuning our budget. I will be considering some of their opinions such as cutting down on Hubby’s soda and trying to get our credit card debt down to just one card.

Another thing I did not mention is that Hubby does earn money from time to time on side jobs (painting, drywall, HVAC, etc). This money is split 50% to credit cards, 25% to savings (emergency fund), and 25% is his ‘extra’ money. We use this for little things we may want but certainly do not need.

Hubby also makes armour. This money is split in a similar way but 25% goes back into materials or supplies for his workshop.

I am trying to get a Free Checking account. We want to go with Univest but will need a local bank to deposit Hubby’s check since his company does not offer direct deposit. Mine could be directly deposited into our main account. We would gain a small interest amount which is higher than we currently get on our savings account. I’m also changing our savings account to one without a fee. This one is charging $5 if you get below $500. Normally this does not happen but this month, for the second time ever; we’re getting hit with this fee. If I can get the accounts changed over, we will have put an additional $120 in our pockets. That money can go straight to the credit card bills. $10 may not sound like a lot but it really can add up!

In theory, by July, we could be putting an additional $50 per month on the credit card bills. This would really help to get the amounts down.

I found this great calculator for debt reduction (http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp) from CNN. Based upon their calculations which are so much better than my own estimations, we will be debt free in 1 year and 8 months! This gives me an incentive. I would like to get it paid off sooner by making payments when we have extra funds available.

Hubby is on board with this too. He wants to get it paid off as soon as possible. This is a good thing because if we both have the same goal, we can encourage each other!

1 comment:

Stephanie said...

Sounds like you are on the right track. We are on that road too. It isn't easy.

One thing I've done that helped, was I started to use my blog to earn a bit of money. That money goes straight toward debt!