The Snowball Method: An Update

What a feeling.

If you’re just tuning in, some months ago I decided to apply what’s known as The Snowball Method of what remains of my large debts. It’s all steps toward as much of a debt-free life as I can muster, and to show my son that no, debt is not just ‘something you’ll always have,’ as so many of us, myself included for many years, were led to believe.

Some years ago, I decided enough was enough and started taking control by paying off roughly $13,000+ in credit card debt. But I was still saddled with four student loans from four different banks, and a car payment. For the purpose of this, I am referring only to debt accumulated through borrowing (including a car, but excluding out home), not monthly bills for services.

With that said and the credit cards paid off a few years back, I had taken aim at my four student loans. One student loan (Keybank) was paid off earlier this year. I then used the Snowball Method and applied everything that was being paid on that first student loan toward my second student loan, on top of my regular monthly payments.

To recap, this is where I was in May:

National Education – $1,500

Car Payment – $6,800

Sallie Mae – $12,200

Discover/Citibank Student Loan – $23,000

Well, last month I’m very glad to say that the National Education is now paid off too. This was accomplished by taking the roughly $300 ($150 each paycheck) and applying it on top of my monthly payment of $75 to National Education.

Four months later, my debt now looks like this:

Car Payment – $4,833

Sallie Mae – $11,878

Discover/CitiBank Student Loan – $21,379

Now, all that money (the $300 originally from Keybank then to National Ed, on top of the $75 from National Ed normally) will get applied on top of my usual monthly car payment of $325. That’s $700 a month, roughly toward my car payment. By my estimation, I should have my car paid off by late winter/early Spring, leaving me only with two student loans to worry about each month.

It may no look like a lot on paper (or screen, as it were), but the feeling to know there is one less in that stack every month is invigorating. Knowing that within a few months that can be down to two is rejuvenating.

Even if I get down to the two and only continue my regularly monthly payments, that frees up at least $700 a month for our family. Money that can be put aside and saved, or even put toward a new home someday as our family grows (not growing yet, just for the record. But we hope to someday).

And I’ll be very happy and proud to know that through saving, determination and hard work, I was able to earn it for us and to teach my son and any other children we may have that it IS possible to live within one’s means. That you can get by without credit cards, without a big television, or the latest technology, and still live full, enjoyable lives.  We can still be one big, happy family and we can also be debt-free (or close to it) at the same time.