snowballing debt

My parents have been talking to me off an on over the past five years or so about their budget plan that is allowing them to pay off debt (they’ll be completely debt-free in August, for the first time since the early 70s) and still live pretty well. They’re following the advice of financial guru Dave Ramsey, and have encouraged me to attend one of his Financial Peace University seminars. Considering that these things aren’t cheap, I’ve opted to make use of free resources, their advice/experience, and the advice/experience of friends.

Recently, a friend was commenting on how by budgeting only $1000 a month and paying down debt using a snowball plan, she could be completely debt-free in just a few years. My initial thought was, “sure, you must not have nearly as much debt as me, or at as high of an interest rate.” And while I was partially correct, I was very surprised to discover that with the same amount of money, I could be completely credit card debt-free in two years and have my student loans paid off in six years.

Of course, this will require a level of discipline I have yet to master, and I’ll need to be more creative about planning for big purchases that occur in frequently. However, seeing the plan laid out before me and realizing that it’s not some unattainable dream has made me much more motivated to just do it already.

The plan starts July 1. I’m going to reassess where I am at that point, and then start tracking my progress, which is also a good motivator.