By writing on this blog I'm already braking one of my cardinal rules - no writing on blogs without some plan to make money off of them. But I can't help it in this case. I need a place to write about what I'm doing and how I'm doing where I can retain a little bit of anonymity. I like business, I like talking about making money, and I want a way to catalogue where I've been and where I want to go, and this seems like the perfect place to do it. Plus, this blog's been around for years, so it's got to have at least a little bit of Google recognition.
What drove me to writing today was rereading a blog I subscribe to calle Learn Live Invest. It's a great little blog about a guy that spends a lot of time thinking about ways that he can make systems and his money work for him so he has to work less. He's invested in real estate, sports tickets, poker, blogging, and a few other things, and it's fascinating. I decided I kind of wanted to try to do the same thing. So here we are.
I'll tell you one thing though. Right now my main goal is eliminating my credit card debt. I've got several cards with several balances that today total $28,795.82. That's a lot of money! The plan is to get rid of it as soon as possible, which means I need to budget correctly and stop putting more money on the cards (which isn't too big a problem). So I'll be keeping track of that here on a monthly basis to see how quickly I can get that down to zero.
Also, to tell you a little bit about myself. I'm an entrepreneur at heart. If you read some of these old posts, you'll see I had grand dreams of taking over the real estate market and making tons and tons of money. Well, the real estate bubble burst and some pretty significant changes in my life have put that idea on hold.
I moved to Seattle about two years ago with my wife and immediately opened up my own law firm. For the past year and a half I've been doing everything I can to cultivate that, which included a lot of time learning about and implementing an internet marketing system. In my spare time I've been working on building some passive income through online marketing, though right now I'm only making about $20 a month (I'll be posting on this regularly too).
Bottom line, I want to talk about money, making money, putting money to good use, and business in general. And this seems like a pretty good place to do that.
Showing posts with label Credit Card Debt. Show all posts
Showing posts with label Credit Card Debt. Show all posts
October 1, 2010
November 24, 2008
Early Retirement | Debt Snowball Update
Right now early retirement is probably the last thing on anyone's mind. With the economy in the tank, automakers on the verge of bankruptcy, and winter nipping at our noses (I hate cold weather so I thought I'd drop that in!) there is no room to talk about early retirement right? Although it may appear as though the primary question of the day may be how to get out of debt, now is actually the perfect time, because there is never going to be an exactly right time to get your financial house in order.
Because of the state of the economy, however, you may need to turn your sites away from investing and creating passive income and focus on the things that are slightly less risky. And there is no better time than the present to start another debt snowball to help you on your way. If you remember, I discussed exactly what a debt snowball was in an earlier post (and my friend over at the daily dosh has done exactly the same thing).
If you are anything like me, you have probably strayed from your debt snowball for whatever reason (for me it was moving to a new city and starting my own business from scratch). Well, now is the perfect time to get back on that horse. It is really hard to retire early if you have a mountain of debt to pay down.
To started paying down your credit card debt, first find out the exact balance and interest rate you are paying on each card, find out the minimum payments on each, and find out what you can put toward credit card debt generally per month. After that you pay the minimums on every card you have but one, with the one you choose determined depending on your psyche. One way to pay down the debt is to put all the extra money toward the lowest balance and moving upward. This is nice because it allows you to actually see progress very quickly. The other method is to pay off the debt with the highest interest rate first. This actually save you more money in the long run (and is the best choice if you are strong willed).
As you pay off each credit card balance, you apply all of that payment (the excess plus the minimum you were paying) toward the next card in line. In no time you have eliminated credit card debt!
As for the update on me, I don't have much progress to report, sadly. I think I may have to make that a New Years Resolution. Starting a business is tough on the debt, though. But if you want to retire early sometimes you've got to go out and get that money on your own, you know.
Because of the state of the economy, however, you may need to turn your sites away from investing and creating passive income and focus on the things that are slightly less risky. And there is no better time than the present to start another debt snowball to help you on your way. If you remember, I discussed exactly what a debt snowball was in an earlier post (and my friend over at the daily dosh has done exactly the same thing).If you are anything like me, you have probably strayed from your debt snowball for whatever reason (for me it was moving to a new city and starting my own business from scratch). Well, now is the perfect time to get back on that horse. It is really hard to retire early if you have a mountain of debt to pay down.
To started paying down your credit card debt, first find out the exact balance and interest rate you are paying on each card, find out the minimum payments on each, and find out what you can put toward credit card debt generally per month. After that you pay the minimums on every card you have but one, with the one you choose determined depending on your psyche. One way to pay down the debt is to put all the extra money toward the lowest balance and moving upward. This is nice because it allows you to actually see progress very quickly. The other method is to pay off the debt with the highest interest rate first. This actually save you more money in the long run (and is the best choice if you are strong willed).
As you pay off each credit card balance, you apply all of that payment (the excess plus the minimum you were paying) toward the next card in line. In no time you have eliminated credit card debt!
As for the update on me, I don't have much progress to report, sadly. I think I may have to make that a New Years Resolution. Starting a business is tough on the debt, though. But if you want to retire early sometimes you've got to go out and get that money on your own, you know.
March 13, 2008
Personal Finance | Eliminating Credit Card Debt | Debt Snowball
Building Wealth - Personal Finance - The Debt Snowball
In my last post, I talked about debt snowballs and eliminating credit card debt. In this post, I want to outline my own personal debt snowball to provide not only an example of how to do it, but to provide you some motivation to do it yourself. It really doesn't take that long to put together, and once it's up and running, it's very easy to maintain. This post is all about building wealth and personal finance. Furthermore, if you are wondering how to be frugal, this is a great start.
Debt Snowball Spreadsheet
To keep yourself on task (and motivated to continue the project) the first thing I would do (after compiling all of your credit card debts) is put together a spreadsheet. I use google docs spreadsheet. It's free, it's easy to use, and you can access it from any computer.
Step 1 - Dates
In my spreadsheet, I have DATE up in the top left hand corner. Down the first column, in the next space I have "beginning balance", followed by a blank cell, followed by the rest of the months in the year. After that is a blank cell, followed by "current balance," followed by another blank cell, then "original owed," and finally "current owed."
Step 2 - Labels
Going across the top row I have each of the names of the credit cards/debts I have (6 total). Before getting to this step, though, first you need to list your debts in order, from smallest balance to biggest balance, from left to right. This is how you would enter the names of the debts into the spreadsheet in the first row (rows go across, columns go up and down). If you pay interest on your debts, leave two columns in between each of the debt descriptions.
In the next row, enter the current balance of each of your cards (it should correspond with the "beginning balance you entered earlier"). In the row right next to the balance, put the minimum payment, or just over the minimum payment, except in the first column. In that column, I want you to write in whatever it is you have determined you can pay, which hopefully is at least 3 times your minimum payment (for me, my minimum payment is $50 and I'm paying $650 - put in the most you can comfortably put toward it).
After the balance row, under the row you actually entered your current balance enter "payment." In the row right next to that put "interest." It is in these columns that you'll document your monthly payment as well as the interest that has accrued on your debt. This should keep your credit balance up to date.
Step 3 - Formulas for Calculating Progress
Next, go down to the current balance row and in the payment column enter the formula so your monthly payments will be subtracted from your balance but your interest will be added in. In Google docs it looks something like this: B2-SUM(B4:B14)+SUM(C4:C14). The letters and numbers refer to the cells you want to add up.
Almost done. The next step is to define your original balance. Do that in the cell right next to the one labled "original owed." That formula looks like this: SUM(B2+E2+H2+K2+N2+Q2). This will add up all the original balances.
Finally, determine what your current total balance is (you don't have to do these two steps, but I think it really helps to see that balance shrinking so rapidly). That formula looks like this: SUM(B16+E16+H16+K16+N16+Q16). Once this is complete, all you have to do is fill in the corresponding cells every month and the math will be done for you.
Remember though, that when the first debt is paid off, you roll all that money over into paying off your next debt. By the end you should be making a huge monthly payment toward that big balance (mine will be over $1000 in the end).
My personal debt snowball
Finally, to give you an idea of where I currently stand, and to make updates worthwhile, I'm going to give you my current debt standing. As I said before I have 6 outstanding balances originally totalling $30,693.11. The current balance is $28,667.96. My original balances are as follows: $3,197.41; $4,516.20; $5,819.77; $7,110.55; $8,564.00; and $1,485.18 (interest free). On those balances I pay $650; $100; $100; $120; $80; $135.93. If you add all that up, I should be completely debt free in 2 1/2 years. At that time all this money can be put someplace much more valuable!
Hope everyone learned a little from this. I plan on updating it from time to time to let you know my progress.
Personal Finance Debt Snowball Credit Card Debt
In my last post, I talked about debt snowballs and eliminating credit card debt. In this post, I want to outline my own personal debt snowball to provide not only an example of how to do it, but to provide you some motivation to do it yourself. It really doesn't take that long to put together, and once it's up and running, it's very easy to maintain. This post is all about building wealth and personal finance. Furthermore, if you are wondering how to be frugal, this is a great start.
Debt Snowball Spreadsheet
To keep yourself on task (and motivated to continue the project) the first thing I would do (after compiling all of your credit card debts) is put together a spreadsheet. I use google docs spreadsheet. It's free, it's easy to use, and you can access it from any computer.
Step 1 - Dates
In my spreadsheet, I have DATE up in the top left hand corner. Down the first column, in the next space I have "beginning balance", followed by a blank cell, followed by the rest of the months in the year. After that is a blank cell, followed by "current balance," followed by another blank cell, then "original owed," and finally "current owed."
Step 2 - Labels
Going across the top row I have each of the names of the credit cards/debts I have (6 total). Before getting to this step, though, first you need to list your debts in order, from smallest balance to biggest balance, from left to right. This is how you would enter the names of the debts into the spreadsheet in the first row (rows go across, columns go up and down). If you pay interest on your debts, leave two columns in between each of the debt descriptions.
In the next row, enter the current balance of each of your cards (it should correspond with the "beginning balance you entered earlier"). In the row right next to the balance, put the minimum payment, or just over the minimum payment, except in the first column. In that column, I want you to write in whatever it is you have determined you can pay, which hopefully is at least 3 times your minimum payment (for me, my minimum payment is $50 and I'm paying $650 - put in the most you can comfortably put toward it).
After the balance row, under the row you actually entered your current balance enter "payment." In the row right next to that put "interest." It is in these columns that you'll document your monthly payment as well as the interest that has accrued on your debt. This should keep your credit balance up to date.
Step 3 - Formulas for Calculating Progress
Next, go down to the current balance row and in the payment column enter the formula so your monthly payments will be subtracted from your balance but your interest will be added in. In Google docs it looks something like this: B2-SUM(B4:B14)+SUM(C4:C14). The letters and numbers refer to the cells you want to add up.
Almost done. The next step is to define your original balance. Do that in the cell right next to the one labled "original owed." That formula looks like this: SUM(B2+E2+H2+K2+N2+Q2). This will add up all the original balances.
Finally, determine what your current total balance is (you don't have to do these two steps, but I think it really helps to see that balance shrinking so rapidly). That formula looks like this: SUM(B16+E16+H16+K16+N16+Q16). Once this is complete, all you have to do is fill in the corresponding cells every month and the math will be done for you.
Remember though, that when the first debt is paid off, you roll all that money over into paying off your next debt. By the end you should be making a huge monthly payment toward that big balance (mine will be over $1000 in the end).
My personal debt snowball
Finally, to give you an idea of where I currently stand, and to make updates worthwhile, I'm going to give you my current debt standing. As I said before I have 6 outstanding balances originally totalling $30,693.11. The current balance is $28,667.96. My original balances are as follows: $3,197.41; $4,516.20; $5,819.77; $7,110.55; $8,564.00; and $1,485.18 (interest free). On those balances I pay $650; $100; $100; $120; $80; $135.93. If you add all that up, I should be completely debt free in 2 1/2 years. At that time all this money can be put someplace much more valuable!
Hope everyone learned a little from this. I plan on updating it from time to time to let you know my progress.
Personal Finance Debt Snowball Credit Card Debt
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