Money Matters – Delusions of Grandeur?

My (now ex-)wife once accused me of just wanting to hoard cash. She could not have been so wrong in her misjudgment of my intentions. One year she wanted to take a vacation so I asked her how much it would cost and she answered “$1500“. Then I asked her “How much do we spend each month on credit card payments?” and she said she did not know, so I told her the answer: “About $1500. Right there is your vacation. Help us get OUT of credit card debt and the vacation you want is paid for!“. She was unable to grasp this concept and it was yet another nail in the coffin regarding our marriage.

My (2nd) wife and I have gone through some economic hurdles through the past 15 years, but overall we’re in OK financial shape. We have some credit card debt and we are working to pay them off. We had been paying each credit card with just a little bit more added in, mostly to keep the minimum payments from going up; but in the long run, this method wasn’t making any real progress at paying the debts off. So this past August, I quietly switched to the “debt snowball” method for paying off our credit cards and it’s quite apparent how effective it can be. Without any drastic change in the *amount* of payments we make each month, it is possible to affect how fast your progress can be and these graphs shows it plain as day:

I simply concentrated our payments on one specific debt (the smallest one) and kept the snowball rolling from there. Hindsight is 20/20, but it’s too late to look back and ponder where (financially) we’d be had we started this process years ago. We can only go forward from here.

After we pay off the credit cards, the next step is to quickly pay off our car loan. It’s currently under $8K total and I expect it to be about 1/2 of that by the time the snowball reaches it.

We already have a fully funded emergency fund, so the next step would be to start investing for retirement, something that I realize we are starting far too late to be truly effective, but still necessary. Then it’s time to work on paying off our home mortgage.

Paying off credit cards is an easy goal; everyone can do this.

Investing for retirement is easier than one thinks, especially if you start early and stick to a plan.

Paying off a home mortgage seems impossible, but it’s not as difficult as it seems.

Having all your efforts work together to give you a net worth in the millions seems like just a pipe dream, at least it does to me. But that’s OK, because I don’t want to be a millionaire. My goals are quite simple – I just want to be OUT of debt.


About hemibill

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