Out of debt in 4 years

I have created a plan for myself that will allow me to be debt free in less than 4 years. All I have to do is make the payments I have allotted for myself and not add any new debt and it will be done in about 46 months. I have not factored in anything like the tax rebate check I expect to get so that will get it done faster if I apply it all to debt elimination.

I guess I should throw in the fact I am renting right now so this does not include paying off a mortgage just two cars and a bunch of credit cards.

 

Good for you. The key is NOT adding any more debt. Best of luck!

 

Good luck. "Not adding new debt" is the trick.

I don't owe squat; both the house and car are paid.

 

I'm working on the house but the two cars are paid for. Will drive them until the wheels fall off. I hate a car payment.

 

I went through a period where my wife worked very little and as a result we ran up our credit cards. She is working full time again now so it should be easier to keep off the new debt.

The only hole in my plan that I can see is that one of my cars has 120k miles on it and it may not hold up for four more years. I am going to find out though.

 

same here. I don't owe nobody a damn thing. I sleep good at night.

 

I'll get there one day. At least until the kids head off to college.

 

Thelt, September '06 my wife and I decided to follow Ramsey's plan and added everything up and we were 45K in debt. Add in another 7500 expense that happened last year and we essentially had 53K in debt. We have stuck with the plan, sacrificed, and all we have left is 8900 on the car and we should have that paid off by July at the latest. Less than 2 years and 53K paid off on total household income of about 85-90K but my wife had our second kid and didn't work for a while. My advice is to keep your head up and plow through it.

And, I know this doesn't make mathematical sense (I am a statistician/economics major in college so this does hurt my math side to say), but pay off smallest debts and really work your way up. I really think the feeling you get from paying off a debt is more valuable than the few dollars you save on interest by paying off the largest interest first. I recently sent my last payment on my truck and man, did it feel great to know that truck was mine and I swear it drives a little better.

 

I have been reading some articles by Dave Ramsey and I may not follow his approach to the letter but I am inspired by his philosophy. So far I have paid off my five smallest credit cards. I still have two cars and three large cards to go but I am working on it.

My situation is similar to yours in that our income is similar and our debt load is about the same and incurred because of a new child..

All that being said I just found out I have to pay $1800 for new medical bills for one of the kids.

 

Yeah, I know the feeling. The key is to make sure you aren't adding anything to the credit cards. Call the doctor/hospital and see if they will work out a payment plan with you. Getting to them early is the key. Most of them will work out something and you just essentially add it to your "debt snowball". My wife and I decided to not give gifts to each other in this process, no trips, etc. And we lived off a budget that we sat down and discussed before the beginning of the month. At first, we didn't do the envelope system and I found us cheating on going out based off the budget so we went to the envelope system and it made a huge difference for us.