Monday, August 23, 2010

Learning to believe what the numbers show

I'm beginning to notice a pattern. My mood falters and my confidence seems do wane at the end of the month. I start doubting my ability to stick to the plan I've laid out for getting out of debt.

Maybe it's because the money between paychecks has to stretch the longest at this time of the month.

I was actually ready to abandon my payoff plan in favor of a different payoff plan. Fortunately, in going through this process I have actually been learning to build a budget and crunch the financial numbers. So, I crunched some numbers on a new plan that would have had me attacking my highest interest rate debt. What I discovered was that although I would pay off the highest of those two balances a few months quicker than on the original debt snowball method, I would not pay off my total debt any faster. It would just change the order of which debts got paid first.

What I'm learning is that although the debt is owed to several creditors at varying interest rates, paying off the total debt amount is still the ultimate goal, and there is only a certain amount of money I can pay to tackle that goal. I've crunched the numbers several times and in several ways, but at my current income, I will only be able to pay this off so fast. I can't make it go away this year. I can't get rid of it all next year. It's going to take about 4 years, maybe a little more, depending on what life has in store between now and then. But, it's probably not going to be less. There just isn't much more I can cut out of my basic monthly living expenses. I think I can conquer the debt at my current income. Additional income would make it easier, and perhaps faster. Maybe I can improve that income at some point, but I'm not counting on that in the current economy.

It's not great. But it's good enough for now, and getting a little better all the time. I just can't afford to panic. I can't afford to lose faith in myself of the plan. Mostly, I can't afford to spend money that for the next several years needs to go toward paying off this debt that I spent 20-plus years accumulating.

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