2 more debts paid off...

Heck yesssssssssssss!

Today I got to pay off those pesky two little credit cards that I have been working on for the last few months. It is such a relief to not have to worry about them anymore. AND, I got to put a big chunk on our final credit line with our credit union. With step #1 complete, we are steadily cruising through step #2.

Now, according to the fabulous Dave Ramsey, I get to snowball the payments that were being paid on the Lowes, Discover, and Mastercard to that credit line to get it paid off faster. Here is what Mr. Ramsey says are the 7 baby steps to get out of debt:

1. Start an emergency fund of $1000-this is so much easier than getting the 3-6 months of living expenses saved. The theory is this will give you a little cushion for emergencies so you don't accumulate more debt while trying to tackle old debt.

2. Pay off debts using the debt snowball-list debts, excluding the mortgage, and begin by tackling the smallest first. This makes so much sense to me because I really need to see the progress quickly. It helps keep me motivated. Pay the minimum on the other bills while you focus all the money you can on the smallest bill. When that is paid off, add that payment you were making to the second debt on your list....and so on...so you are snowballing payments.

3. Build 3-6 months of expenses in a full emergency fund-this fund is to be used in emergencies only, like if you were to lose your job, or had a major illness. This should be much easier because you are already in the financial habit of socking money into something.

4. Invest 15% of your income into a Roth IRA and pre-tax retirement-this is the wealth building stage. You won't have any debt payments anymore, minus your mortgage, and let's face it....we won't be seeing any Social Security checks...so it is time to cover your rear. Dave also says not to invest more than 15% because the extra will be needed for the next steps.

5. Save for college funding- this step is to be done at the same time as #4. You have to have a goal for how much you want to save. Look into beginning a 529 plan to get the most bang for your buck.

6. Pay off your home early- self explanatory...

7. Build wealth and give-be gracious enough to help others. Save for yourself and save for others.

So there it is. It is really simple to follow in theory, and really easy once you get going. We are using it as a guideline for our finances and are not following it hard core. Of course, if we did, we would see success so much quicker. But, I can't complain about paying off the Lowes bill, Discover card, and Mastercard before March 1st. :)

I know we can have this FINAL credit line paid off in the near future. The only thing that will make it slower is the fact that the hubs has a truck that is 10 years old....and it has not been acting right for a while. He keeps patching things, but will need to save for a New-to-Him car.

I Love Dave Ramsey!!!!