The gradual crawl to debt freedom

Have you paid off your debt? Managed to save for your dream home? Had an awesome investment pan out? Share your personal finance success stories here.

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Joined: Tue Aug 21, 2007 10:15 am
Location: Baltimore, MD

The gradual crawl to debt freedom

Postby ecouls1 » Wed Oct 17, 2007 9:49 am

My young family's financial success is small so far but our goals and planning will lead ever so gradually to more and more successes.

The overriding goal is to be debt free so that my wife can quit her job to be a stay at home mother to our two girls. With no consumer debt and a house that's paid for, we figure we'll be able to live comfortably, and save for our retirement and college for the girls exclusively on my salary.

The first small step was accomplished this past April. We applied for and recieved an AMEX Blue card with no annual fee and O% interest for 12 months on Balance transfers as well as no balance transfer fee. Sweet!! So we figured how much we could afford to pay each month for 12 months for some of our smaller consumer debts. We settled on transfering to the AMEX card the last little bit of one of my student loans (about $1,500) and the outstanding balance on our one credit card (about $3,500).

Then we implemented the debt snowball method to be able to pay off all debts in about 7 years. The AMEX Blue card will be paid off this coming April. The next debt to fall will then be my other student loan debt (Sept '08). In Feb 09, 2 debts will fall in the same month (my wife's student loan and my Saturn VUE)!! My wife's car loan will dissappear later that year and the final mortgage payment will be made in June of 2014.

Other successes so far include purging our life and home of clutter/junk that is not used or needed. This is accomplished with the help of craigslist and yard sales and the dump. We have a very comfortable (approx 4 months worth) emergency savings account to fall back on if needed. We both contribute regularly to our respective 401k's. Not much (my wife - 11%, me - 5%) but enough to get company matches plus some. These contribution amounts will be bumped up significantly once we're debt free. I use the pearbudget spreadsheet model to budget and track finances and read and devour GRS and other blogs to stay motivated, informed, and conscious of the family's spending habits.

A shout out to JD for a great blog and a happy 18th month anniversary to GRS. Here's to another 18 months and more!

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