It’s day three of my vacation. Yesterday I was on the tiny house kick, and I still am. But, since we’re broke (actually below broke, seeing that we are in debt), I think the first step would be climbing out of this hole.
This week will be the first time that we have used a technique commonly called the ‘Debt Snowball.’ It’s really quiet simple. You find some extra money, not a lot, but enough to speed things up a little. Then you throw it at your smallest debt. You do this every chance you get until it is paid off. Then you take the extra money plus the amount you were paying on your smallest debt, and throw it all at the next largest debt. You repeat this over and over, and move up the ladder from smallest to largest. The process creates a cascade effect that in theory should enable us to pay off all of our debt except the house inside of five years (if my calculations are correct).
The hardest part of this is actually applying that extra money to our debt instead of blowing every cent of it, which is what we usually do. So far though, we are doing pretty good. This is the first time in a long time that we have made a budget and actually stuck to it. I’m very optimistic about this now. I’m not sure what’s changed, but we are beginning the be more, well… disciplined. It’s a change.