My Debt Snowball: Rolling Along

So, even though I only started this blog a few weeks ago, I have been paying down my debt for about 5 months. I’m actually pretty proud to report how much progress I’ve made since my earlier post, which listed all of my debts. Before I started on Dave’s plan, I was just spreading out my money and making payments to everyone. AD (after Dave!), I have gotten myself rolling along on a big debt snowball. Here is where my credit cards stand:
Banana Republic – $0.00
American Express - $0.00
Nordstrom - $0.00
Citibank - $21,700

I know I still have a pretty high balance, but I’m so happy to have paid off almost $12,000.

I was pretty lucky in that a came into 2 small “windfalls” of money that I were outside of my salary and I was not counting on. First, I got a bonus from work in February, which came out to about $3000 after taxes. Then I found out I was owed quite a bit of overtime back pay for all the time I’ve spent traveling for work. After taxes, that came out to about $2500. So that means I have been able to find an extra $6500 to actually pay down debt in the past 5 months!

I’ve been trying to do a lot of extra work to use for debt repayment outside of my normal salary. I currently have a full time job, and THREE part time jobs (luckily, they are all quite flexible). I tutor high school students after work or on the weekends; I house sit for a few different friends who have pets; and I have a pretty sweet gig working at High School College Fairs every so often to talk about tests and pass out information. That last one is obviously pretty seasonal, but it pays $150 per gig for only about 2-3 hours of work. Only a few of those things make a nice size dent in my debt.

Now is where I start to get on a slightly different page than Mr. Ramsey. I still owe just over $4,000 on my car and, as I mentioned, I still owe $21,000 on my last credit card. (Plus, I have $19,000 in student loans). If I were strictly following the debt snowball plan, I would pay off my car, then student loans, then credit card, however the difference in interest rates has me wanting to pay off my credit card first. Here are the interest rates for each:

Car - ~6% (I can’t find the exact rate)
Credit card: 18.99% (Already tried to reduce the rate, no luck)
Student loans: 2% (No way am I going to pay this off before my credit cards)

I have actually excluded my student loan debt from this goal of being Debt Free by 30 since the interest is sooo low and I could always defer the payments if an emergency came up. My car is scheduled to be paid off the same month I’m hoping to end this project, so I thought I would just keep paying the regular monthly payment and funnel all the extra cash into the credit card payment.

How do I actually make a budget?

It has been really hard to stop just buying things when I “need” them and to really think about each purchase that I make. There have been times in the past where I knew that I was spending way too frivolously and that I was getting in debt (ahem, spur of the moment trip to Greece), but most of my spending really always felt pretty justified. “My jeans ripped so I really did need a new pair.” “I need a caramel macchiato from Starbucks if I am going to function at all today!” I knew I was making a decent, stable living, so it didn’t seem like I was being irresponsible by spending my money this way.

That is really the hardest habit to change right now. No new jeans. No Starbucks. And especially no trips to other side of the country so my boyfriend can watch his favorite football team play at home. I’m getting the hang of cutting out the spending I know is frivolous, but I still can’t seem to actual make a budget that includes everything. I have no idea what is realistic to budget for the things that change every month. My electric bill can be $40 or $70. If only drive to work and back, I really only need about $100 for gas every month. If I make a few trips over to see a friend or drive farther than normal for any reason, I could need $200 for gas. How do I account for things that just ‘pop up’ in the middle of the month? I just got invitations to two bridal showers and a bachelorette party dinner for this month. I didn’t account for buying gifts, but these are fairly good friends.

I know that having a budget is going to be key to really getting done with my debt snowball (baby step 2), but I just don’t feel like my spending at the end of the month is even close to my budget at the beginning. Dave says to spend every dollar at the beginning of the month on paper and on purpose. I’m trying, but so far I’m really struggling.

Does anyone have advice on what has worked for them?