The Solution?

I mentioned in my introductory post that I am a bit of a shopaholic. I don't necessarily buy the finer things in life, but I buy a lot of little things. I love buying clothes for my kids and I love buying toys for my kids.

In May, I started researching different methods of paying off debt. The one I decided to adopt, for now, is the snowball method.

To explain about my debt, shown in my first entry, we have two Best Buy cards. Both have 0% interest on each purchase until an established deadline. The first deadline is approaching in December. If you don't know how these 18 months/no interest deals work, if you don't pay the entire amount off by the deadline, you are responsible for all interest accrued through that point. The thought of paying something down, having a $25.00 balance left, and then having $800.00 in interest added to that $25.00 balance just sickens me.

Currently, the minimum payment on one of the Best Buy cards is $33.00. I am paying $220.05 on this card. The minimum payment on the other Best Buy card is $27.00. I am paying $197.02. For all other credit cards, I'm paying the minimum payment. Based on these payments, the lesser debt will be paid off in April 2011, and by making a snowball payment (applying the $197.02 that was previously being used for the smaller card), both cards will be paid off by June 2011.

Following the same principals, and assuming I acquire no new credit card debt, our Target credit card will be paid off February 2012, the Ohio Health card will be paid off June 2012, and the Kemba card will be paid off October 2012.

These numbers do not take into account any potential raises (or pay cuts), any bonuses, tax returns, or other windfall that we may incur during that time.