Kyungmi picked up an amazing bonus from work today. Six months ago, i would've bolted for the nearest music store or eBay listing for Tablet PC's and snagged a few expensive toys - but now, after five months of working our Debt Snowball patiently, diligently, and intensely, my first thought was actually to use the windfall to knock out the second-to-last debt and take a huge bite out of the last remaining one, the home equity loan that threatened to become a new member of the family with its own bedroom! Now how's that for a change of heart? i'm re-reading the first article i wrote at the start of this financial fight for freedom, and i'm almost chuckling at the memory of the fear that swept over me when i realized just how big the financial hole was at the time:
I just finished the very first step of Dave's plan: writing out my first monthly budget. Even though all my finances are recorded in Quicken, this was still a very painful, brain-numbing exercise. Bad news is that the debt i tried so hard to ignore actually is turning out to be a much bigger troll under the bridge than i had realized...
...and now, fast forward to today, when i called the loan officer to pay off the balance early on our back windows' installation (real physical windows, not the blue-screen-of-death kind - last time we will EVER finance home improvements, btw!!) - what a pleasant surprise to learn that instead of the stated remaining balance of $5,805.85, the early payoff amount was actually only $3,274.27! i guess the larger amount was the balance if i kept paying minimum amounts for the remainder of the loan's life for the next 5 years or so, with the smaller amount reflecting the immediate savings sans accrued interest. Once i heard that, i fired up my Nuvi GPS and drove straight to their office to hand them a check and be done with this once and for all. The lady at the desk smiled as she printed out the payoff receipt and said, "If there's anything that we can do to help you finance something in the future - " "NO, NO, NO, NO, NO!!!" i laughed, shaking my head and throwing up my hands in defense. "We're just about to start attacking our last big debt and plan to be completely debt free!! NO MORE DEBTS FOR US!!" The lady did a double-take. i must've sounded like a cult zealot! "Gee...that sounds like a good idea...", she said wistfully. By the time this month is up, i hope to have put a mighty blow to the troll under our fiscal bridge - close to half of that monster will be hacked away right off the bat! With no other little debts diluting our financial muscle, we'll be able to throw everything we have to whittle that beast down fairly quickly. Incidentally, one of the most amazing things about this debt snowball has been seeing how money that once was so scarce is now virtually pouring in from all directions! Learning to set up a monthly budget has helped us put a tight reign on every single dollar that comes in, Instead of having money flow through our fingers like loose sand. i might be overly optimistic, but perhaps in another 5 or 6 months (?) we might actually be done with ALL of our debts (except the house)...wow, i can almost smell that day coming!
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