Gather Little by Little

Our family finances get a lot of attention this time of year. I clean up the Christmas mess, every year we get better at handling Christmas expenses, but we are still not where we would like to be. I start to review my files to make sure I am ready to finish our taxes. Finally, January is “budget month”, the time of year that we review our budget. By the beginning of February, I have a really good grasp on all the numbers. Not so much meaning that I have control of the numbers, but that I can recite them at a moment’s notice.

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Debt is perhaps one of the most pernicious things known to modern mankind. As nobody likes to own someone something (not even a kind remark), we soon become obsessed to pay back our due. Some do it by spending less, cutting back on their lifestyles through frugal habits, others will get a second job or study in the hopes of earning a promotion and generating a bigger income. We all do this because we desire much, hate debt and want to sleep in peace.

Debt is stressful

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How to be debt free is a question I get asked often via email. The process of getting of out debt is easy…but actually doing it is hard. See, getting into debt is easy. It only takes a few minutes to make a $5,000 purchase on a credit card. Paying it back though can take years.

In debt and want to get out? Here’s how:

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1. Commit yourself to paying off your debt. Make it the most important thing in your financial journey. Swear that until you pay off your debt, you won’t buy anything you don’t need.

Are not two sparrows sold for a cent? And yet not one of them will fall to the ground apart from your Father. But the very hairs of your head are all numbered. So do not fear; you are more valuable than many sparrows. Matthew 10:29-31

Several years ago, we made a dumb decision to take out a loan in order to purchase a car. It was a relatively sensible used minivan, nothing extravagant, but I have regretted the decision ever since. Fortunately, our car has held up well and we have had no more than the usual types of repairs. :twists fingers and rolls eyes heavenward:

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Last month I applied for another Discover More card. I had to end up getting two cards as the first one in my wife’s name wouldn’t cover the entire remaining balance on my 29.9% Bank of America credit card (crooks!).

Before any of you freak out about me getting additional credits cards, I’m transferring the balances to get a reduced rate and won’t be using the cards for anything else. As a matter of fact upon receiving the cards I immediately scanned the cards and stored to images in Evernote then sent them straight to the shredder. I just don’t need the temptation laying around. I am sure I’d be fine, but I just don’t trust myself enough.

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“Nope, no credit cards for me. I don’t even carry one.”  I cannot tell you how many times I have said this phrase or something very similar to friends and family over the past 3 years.  Most recently it came up at the store while looking at a “great deal” on something in the electronics department.

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My disdain for credit card companies and their unethical practices isn’t a secret. I’ve written quite a few articles here on Gather Little by Little about how I dislike them. The unfortunate reality for many of us that previously lived in the land of stupid for too many years (or maybe even still do) is a large amount of credit card debt that we’re stuck with until we can get it paid off.

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I’ve written before on how to get out of debt using debt snowflaking even before PaidTwice came up with the great name and started the snowflake revolution. Since then I’ve gained a number of readers and thought it might be useful to discuss the concept of debt snowflaking again, especially as  it’s something I’m really trying to get back to now. I’m refocusing on my debt snowball again after it sadly melted.

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Before you close your browser and stop reading, let me explain…

I have my credit card payments set-up for auto-bill pay. I make sure all of my payments go out on time and even provide a “buffer” just in case something goes wrong. About 6-months ago, I received my statement for my Bank of America credit card. The interest rate? 29.99%  WHAT?

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Our debt snowball melted. I’m not exactly sure when it happened, but I do know why. I guess it started melting around the the time we began looking for a new home and placing ours on the market. Our finances are in a bit of chaos right. A controlled chaos mind you, but chaos none the less.

What melted our debt snowball

A number of things have very quickly melted our debt snowball:

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• Our old home not selling. This caused us to take on not only two mortgage payments, but dual expenses as well.   Including 2 power bills and dual property taxes. Property taxes on our old home are due this month.