Tuesday, July 22, 2008

Why it works for us

As I mentioned, I was really resistant to the whole Dave process. A big thing for me to get used to was the debt snowball approach. Logically, I thought you should always pay the one with the highest interest rate first. I was very skeptical of the new approach, but caved in. Tim's credit card wasn't very big, so paying that off didn't really convince me of much. It wasn't until we were approaching our car pay off that it really 'hit me'. This rocked!

The very first month I was able to put a big ol' ZERO in the line item for the car payment was great. It finally clicked with me. Debt is a very emotional thing. It felt so wonderful to have a debt that we could cross off the list. It's almost hard to explain how liberating that felt. It was also very assuring to know that if we had an emergency, we had an "extra" $300 in our monthly budget we could tap in to. It really makes us more flexible in our monthly budgeting, which is almost as great as the emotional high from crossing off an item.

Attacking the smallest debt first also eliminates the possibility of forgetting. Yes, I have forgotten bills in the past. I'm sure a lot of people do. So, every time we pay off a debt, it's one less due date to forget. One less thing to write on the calendar. One less check to write. Okay, we rarely actually write checks any more, but it's the same affect. Writing a check each month is a constant reminder of that debt, so not only did it feel liberating to pay off the debt but it also took one more item off my guilt list for the month.

Like I said in my previous post, we don't really follow the snowball the way it is designed... but we go after the debt with the same gazelle-like enthusiasm. Beware, though... It's addicting!

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