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  1. 07-10-2008, 09:21 PM #1
    McD
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    Default For Greebo--my debts!

    Greebo...I probably could do it all by myself but after looking at numbers all day long at work, I hate dealing with them at home.

    Our net income: 4600$

    Our fixed expenses:

    Mortgage: 1200 (property taxes, house insurance included)
    Cell Phones: 100$
    Cable/Internet: 80$
    Gas/Elec: 181$ (it's on budget billing )
    Car Insurance: 220$ (seems high, but majority of cost is b/c DH is male, 26, and has a 2006 Pontiac GTO)
    Daycare: 500$

    Our Variable Expenses:

    Gas: 300$
    Groceries:300$
    Eatin Out: 60$
    Water: 40$

    The Debts:

    Vantus Bank 0% interest, life of loan: balance approx. 1900$ min. pay 70$.
    Liberty Bank: 8%, balance apprx. 6700, min pay 170$
    GTO: 4.9, balance 10K, min pay 200$
    Optima: 3.9, balance 19K, min pay 375$ (THIS WOULD BE OUR STUPID TAX)
    House: 6.75, balance 126K, min pay 1200$.
    McD
    -wife to Z
    -mommy to Dubya & Moo Cow

    Blog: http://familystylemayhem.wordpress.com/


    My Ravelry: http://www.ravelry.com/projects/nicd...view=thumbnail
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  2. 07-10-2008, 10:01 PM #2
    Greebo
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    What's happening to your extra $800/month?
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  3. 07-10-2008, 10:02 PM #3
    McD
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    Default

    Wesley--savings---a big black hole.
    McD
    -wife to Z
    -mommy to Dubya & Moo Cow

    Blog: http://familystylemayhem.wordpress.com/


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  4. 07-11-2008, 06:05 AM #4
    Greebo
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    Quote Originally Posted by MrsMcDowell View Post
    Wesley--savings---a big black hole.
    Hehehe - understood.

    However, you know you're going to need to get that black hole under a spotlight and get that money under control for any plan to work, right?

    How much in savings now, and what kind of interest?

    For now, I'm going to assume a starter snowball of $500, because that black hole will take time to master. Up it, and you'll see faster results.

    On the GTO - is that minimum right? I'm coming up with 57 months left on that GTO to pay it off at that minimum... a 5 yr car payment...

    I'm also going to give better numbers on debt balances, using bankrate's calculator to determine what your balance should really be after X months paying the minimum on each debt.

    Code:
    Starter Snowball - all others get minimums	
August, 2008:	Pay Vantus $570 ($500+$70)
	Balance $1330
September	Pay Vantus $570
	Balance $760
October	Pay Vantus $570
	Balance $190
	Pay Vantus $190
	Close Vantus
	Snowball left: $380
	Liberty Balance: $6338
	Pay Liberty $550 ($330+$170)
	Liberty Balance: $5788
November	New Snowball $740
	Pay Liberty $740
	Liberty Balance $5048
December	Pay Liberty $740
	Liberty Balance $4308
Jan, 2009	Pay Liberty $740
	Liberty Balance $3568
February	Pay Liberty $740
	Liberty Balance $2828
March	Pay Liberty $740
	Liberty Balance $2088
April	Pay Liberty $740
	Liberty Balance $1348
May	Pay Liberty $740
	Liberty Balance $608
June	Pay Liberty $608
	Close Liberty
	Snowball left: $132
Ongoing	GTO Balance: $8083
	New Snowball $940
	Months to pay GTO: 9
	Optima Balance:  12142
	New Snowball $1315
	Months to pay Optima: 10
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  5. 07-11-2008, 08:03 AM #5
    LexTysMommy
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    I love looking when greebo breaks it down, BUT do you think that she should maybe pay the one with 8% first since the other one is 0% for life of loan? just a thought.
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  6. 07-11-2008, 08:46 AM #6
    Greebo
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    That would be mathematically more beneficial, but as Dave Ramsey says, if we were doing math, we wouldn't have any debt in the first place.

    The idea behind this snowball is to build momentum and see quick results. Just like you aren't as likely to continue a food diet weight reduction plan if you don't lose weight right away, you aren't as likely to continue a debt reduction plan money diet if you don't see success right away.

    Plus, doing the smallest first loosens up the budget that much sooner. For many - not necessarily in this case, but for MANY, the race between month and money is being won by month. Paying smallest to highest gives money a chance to go the distance for a change.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  7. 07-11-2008, 08:50 AM #7
    Russ
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    One would think that and thats the reason for the calculators.

    I didn't calculate it, but my guess is overall you will save money and pay both debts off quicker.
    Russ

    Truck payments: 10 9 8 7 6 5 4 3 2 1 WAHOO!
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  8. 07-11-2008, 08:54 AM #8
    Greebo
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    Quote Originally Posted by rcannon View Post
    One would think that and thats the reason for the calculators.

    I didn't calculate it, but my guess is overall you will save money and pay both debts off quicker.
    Yes, paying off the highest interest debt first WILL save you money and time in paying off your debts, IF you stick with it. The math absolutely proves that.

    Like I said - if we were doing Math, we wouldn't be IN debt in the first place.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  9. 07-11-2008, 08:59 AM #9
    TheRootedNomad
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    In support of the DR method I'd like to say that paying off the smaller debt quickly is very motivational! Having done it ourselves I would have to say that psycholocy beats the math in this situation. Greebo's right forget the math and go with motivation.
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  10. 07-11-2008, 11:22 AM #10
    MomToTwoBoys
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    I hate to derail this awesomely wonderful thread, but how did you figure in the amounts for the new snowball? The ones after you pay off the first loan, then move onto the next. I know you pay minimum plus the extra until the smallest debt is gone, then add the old minimum payment from the first debt to the extra amount and apply that new sum to the second smallest debt. I just need an actual addition formula to get it into my skull.
    Wife to DH since 10/31/2002!
    Mom to DS #1 08/13/98 Mom to DS #2 09/11/03

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  11. 07-11-2008, 11:26 AM #11
    Russ
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    The extra amount PLUS the minimum amount you were paying on the debt you just paid off.
    Russ

    Truck payments: 10 9 8 7 6 5 4 3 2 1 WAHOO!
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  12. 07-11-2008, 11:52 AM #12
    Greebo
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    Quote Originally Posted by MomToTwoBoys View Post
    I hate to derail this awesomely wonderful thread, but how did you figure in the amounts for the new snowball? The ones after you pay off the first loan, then move onto the next. I know you pay minimum plus the extra until the smallest debt is gone, then add the old minimum payment from the first debt to the extra amount and apply that new sum to the second smallest debt. I just need an actual addition formula to get it into my skull.
    You've already got it.

    Her basic snowball was $500. That is, she has $500 extra a month to pay, after I deducted all her bills and expenses from her income.

    The minimum on the first debt was 70.

    So Month 1 debt 1 pay 500 PLUS the minimum.
    Month 2, same thing.
    Month 3 pays off Vantus, and the debt snowball was 570, so deduct what was paid to Vantus from the $570. That was $380
    Then add the next minimum to the $380 that month and pay that.

    The NEXT month, you increase the whole snowball - 570 + the new minimum, $170, and now your snowball is $740.

    And OOOH I messed up that chart!

    I skipped a month.

    It should be:
    Code:
    Starter Snowball - all others get minimums	
August, 2008:	Pay Vantus $570 ($500+$70)
	Balance $1330
September	Pay Vantus $570
	Balance $760
October	Pay Vantus $570
	Balance $190
November
	Pay Vantus $190
	Close Vantus
	Snowball left: $380
	Liberty Balance: $6338
	Pay Liberty $550 ($330+$170)
	Liberty Balance: $5788
December	New Snowball $740
	Pay Liberty $740
	Liberty Balance $5048
January 2009	Pay Liberty $740
	Liberty Balance $4308
February	Pay Liberty $740
	Liberty Balance $3568
March	Pay Liberty $740
	Liberty Balance $2828
April	Pay Liberty $740
	Liberty Balance $2088
May	Pay Liberty $740
	Liberty Balance $1348
June	Pay Liberty $740
	Liberty Balance $608
July	Pay Liberty $608
	Close Liberty
	Snowball left: $132
Ongoing	GTO Balance: $8083
	New Snowball $940
	Months to pay GTO: 9
	Optima Balance:  12142
	New Snowball $1315
	Months to pay Optima: 10
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  13. 07-11-2008, 11:56 AM #13
    McD
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    Thank you VERY much Greebo!
    McD
    -wife to Z
    -mommy to Dubya & Moo Cow

    Blog: http://familystylemayhem.wordpress.com/


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  14. 07-11-2008, 12:30 PM #14
    fernykins
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    I see how it works ..........
    Fern
    Yes I'm out of my mind. It's a dark and scary place in there.
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  15. 07-11-2008, 01:33 PM #15
    MomToTwoBoys
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    I think I finally got it now. I even was trying to figure out snowball amounts and stuff in the shower. Once I get a set balance on both the Mastercard and the VISA, I can do a final figure on the snowball for the four debts.

    Omg thanks so much!
    Wife to DH since 10/31/2002!
    Mom to DS #1 08/13/98 Mom to DS #2 09/11/03

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