The Plan

In following with Dave Ramsey's "baby-steps" plan...I am back to step 1. First, I need to save up an emergency fund of $1000. It should probably be more, but that is a good start.

After that, the goal is to pay off the $900 we owe on my husband's car. It is our smallest loan and also our lowest interest loan. But, the car probably won't last another year, so we want to own it, incase we need to sell it or trade it in for a more functional vehicle.

Once that is paid for, we will begin to put all extra income toward Credit Card #1. It has over $10K owed, and the highest interest rate 14.24%.

When that is paid off, we will focus on putting all extra income toward Credit Card #2. We owe $9600 on that one, but at a lower interest rate of 10%.

When that is paid off, we'll focus on paying off the student loan. And somehow during that time, we need to either save up for another car or take out a car loan. I expect it to take 3 or more years to clear out all of this debt, but I guess it all depends on our commitment and our income over those few years. Once our daughter is done with daycare (Sept. 2008) we'll have an extra $800 a month to put toward paying off the debt.

I am not sure about the mortgage, we may want to move by the time all of the other debt is paid. I really want to focus on eliminating the $30K of car, credit card, and student loan debt first.

So, that is the plan. I'm going to use this blog to keep track of spending and earnings and most importantly- debt reduction progress and strategies.

My goal date for eliminating all debt except the mortgage is September 1, 2010. That will also be the month of our 10th wedding anniversary- maybe we'll be able to afford a trip to celebrate!