Playing with snowballs in July

One of the key reasons I decided to start blogging again, particularly about dealing with my finances, is that I regularly find myself having a crisis of confidence. Am I'm making the right choices on my quest to get out of debt?

I've been listening, when I can, to the Dave Ramsey radio show. That helps keep me focused. It also is a good reminder that I am not alone in dealing with problems of too much debt. It also helps me realize that I don't have it so bad. I'm not on the verge of losing my house. I rent. I don't think there will be any need to file for bankruptcy. I don't have creditors or debt collectors hounding me. I don't have a car payment.

Fortunately, I have been able to pay my bills. But some months that is harder than others. I have finally realized that I cannot use credit cards at all, to pay for anything. But I confess that I have not destroyed the cards, except for one -- a Chase credit card that is charging obscene interest. I think I could get a better rate from a loan shark. The only way my rate could be any worse if is I was regularly late, or not paying at all, and even that would only raise my interest rate by 2 percent.

They obviously expect me to default on that account. I am awfully tempted to prove them correct out of spite and pay the creditors that look at my good payment history. Chase obviously doesn't care about that and seems determined to help me default.

As I said, I've been listening to Ramsey. In his system, what he advises it to take on the smallest debt first, rather than the account with the highest interest. He calls it working on the debt snowball, starting on the small debt, and building on that success. I can see the reasoning behind Ramsey's advice in that it would feel good to just get some of those monthly bills eliminated. I would take any positive reinforcement I could get right now.

But there are days, like today, when it feels like the snowball is working me. It's several days until pay day, the checking account is almost empty, the vehicle's fuel tank is almost empty, and some household supplies are empty, or on the verge of empty. In the not-too-distant past, I would have just used a gas station credit card and filled up the truck without thinking twice about it. I've done that recently enough ago that one of the gas cards I have still has a balance of almost $300 due to some work-related and personal trips I took in late spring and early summer. I just eliminated the debt on another gas card. This would be the second step in my debt snowball.

But it seems like if I keep doing the debt snowball approach, I will be at this forever. So I may revert to the approach I was using a couple of month ago, which was to tackle my two highest interest rate accounts by paying an amount that, if I could maintain it, would eliminate those two debts in about 3 years. I have another account that was converted to a loan, which will be paid off in about four and a half years. Those three accounts make up nearly half of my debt. Along with continuing minimum payments on the other accounts, that would mean I would have eliminated more than half of debt in about 4 years or so.

Even that seems like a long time. I have to remind myself that it took me 20 years to get this deep in debt. So, maybe that's not so bad.

But it sure doesn't feel good. At least not today.