warning- long post.
Hi and welcome!
I think you just posted this but I am home sick today so I have nothing better to do then lurk the boards (daytime tv is terrible!!!).
Your plan sounds very reasonable to me. There are many trains of thought about what order to snowball. Some say highest interest rate first (to save you money), others say smallest balance (for quick wins) and still others do it in whatever way will make the minimum payment go down the most.
How much are you planning to throw at this debt each month? I calculated that you are making just under $1250 in minimum payments right now (without the student loans).
Hi and welcome,
It doesn't matter what order you do it in. You have to do what works for you.
Bf and I have 2.5 years left on a car too. I was actually excited because a few days ago another payment came out and now we only have 29 payments instead of 30. That makes me feel better for some reason LOL. Our other truck was just repaired but is old and has no payment. I mean very old 1994! This was a major repair so hopefully it won't need anything for awhile. Do you have a certain amount of cash going into sinking funds for car repairs and maintenance. That is important too, especially when you get one paid off. It seems as soon as you get it paid off it needs repairs. I don't think we will be put extra money on this because our auto loan is for 0% Stupid cars! That's ok, BF's student loan has interest so we are tackling that at the moment. I was hoping the student loan and the car payment would be done at the same time, then we would really be laughing!
It sounds like your plan will work. If you are not comfortable with the 1000 efund. Make it 2000. It will feel really good to knock out that 785 CC. Small goals worked for me too. There is nothing saying you can break the big one up into smaller goals too when you get to it. For instance, celebrate with your favorite home cooked meal each time you knock it down 1000. Then it doesn't seem so bad.
A goal (to have another baby) can be a great motivator to keep you focused. Mine is to save for a down payment and build a house. I want a new house very badly.
thanks for the replies!
Your plan of attack looks good and if it keeps you motivated than that is the important thing. DH and I did the pay off a couple smaller debts then started attacking a larger one leaving 2 other smaller ones for later. We did it that way because the interest rate was the highest and the minimum payments were much higher than we felt comfortable with at the time. We started to lose a little motivation due to not seeing results as fast but were thrilled with the drop in minimums due each month. After 6 months of targeting that one we decided to go over the budgets and debts again and have switched to targeting a different and lower debt as we felt that would increase our motivation again. Not to say that will happen to you and your DH that you will lose motivation with targeting a bigger debt in the middle but wanted to point out that the plan can always change later if you find that your current plan isn't working for you anymore. Just keep the snowball rolling and don't be afraid to review the plan again during the journey.
Looking at the post with your budget info, I thought I'd throw out the sinking fund idea. You have some bills that are not monthly but have to be paid during the year. It is really easy to overlook these when making a budget, then they cause problems when they do come up and the money wasn't budgeted. We have that with our car insurance and property taxes as well as things such as car registration. What I find helpful is to total all these things up and divide that amount by 12. That is the amount I need to set aside every month in an account so the money is there when the bill comes in. Maybe that would help you as well. I think some of the other posters also have sinking funds for certain bills as well.
Hi & welcome.
"Patience is the best remedy for every trouble"- Plautus
Your debt repayment plan looks good. Your childcare is mind boggling! That's what I do and I wish someone would pay me that much a month lol!
My only suggestions are to second Norma's idea of having a gift fund and then about your "blow" money...can that be reduced at all?And possibly even if you can reduce it to $200 then the extra $50 can go into the gift fund...keep in mind, in 5 months your baby will be 1 year old & you'll probably want to have little party for her, buy some presents etc..so having some funds in place is a good plan...and then you'll have Christmas after that...Just a thought.I have 5 kids and trust me gift buying for them is one of the fastest, easiest way to blow your budget.
Welcome, and congrats on making the commitment and having a plan to get your debts in order!
Sounds to me like your doing great Andi.