The Dave Ramsey's Debt "Snowball" Method

Christiandebtsolutions.org/debt-snowball

I attended the second series of financial workshops by the Richland County Public Library. "Budgeting and Saving" was presented last night by Newberry College Professor Paul Smith. After his seminar I decided to make one change.

I decided to go with the Dave Ramsey's Debt "Snowball" Method. I rearranged my payment plans so that I pay only the minimum on my two highest credit cards and all my extra money (part time jobs, unexpected money windfalls) are going to my largest credit balance. My highest should be paid off by December this year.

I've always heard about the "Snowball" method, but didn't like the fact I was only paying the minimum on my credit cards except the one with the highest balance. Psychology wise I could understand why the method works. It gives you the momentum to know you can do it, that you reached a goal, and can claim, "Yes I PAID off this card, now on to the NEXT".

Dave Ramsey's Debt Snowball Method: You start with your lowest balance and pay as much extra as you can over the minimum while on all your other balances you pay only the minimum. I made up the scenario below:

Credit Card                     Owe                      Min.                     Pay                Paid off after
Discover                            $340                     $20                        $40    8 1/2 months ($340/$40)
MasterCard                       $545                     $30                        $30
American Express             $620                     $35                        $35
Department Store              $980                     $50                        $50

After 8 1/2 Months
Credit Card                     Owe                      Min.                     Pay                Paid off after
Discover                           Paid                    
MasterCard                       $305                     $30                         $70    4 Months of paying $70
                                                                               $30 + $40(What you paid on Discover Card)

American Express             $340                     $35                        $35
Department Store              $580                     $50                        $50


After 12 1/2 Months
Credit Card                     Owe                      Min.                     Pay                Paid off after
Discover                           Paid                    
MasterCard                       Paid                    
American Express             $200                     $35                        $105   2 Months of paying $105
Department Store              $380                     $50                        $50

After a Year and 2 1/2 Months
Credit Card                     Owe                      Min.                     Pay                Paid off after
Discover                           Paid                    
MasterCard                       Paid                    
American Express             Paid                   
Department Store              $280                     $50                        $155            Almost 2 Months

Debt FREE after a Year and 4 Months!!!

You can then put that $155 you have been paying each month toward credit cards into your savings or Emergency fund so your credit cards won't be used as much or contribute more for Retirement. You can finally contribute to a 403b, Roth 403b, or Roth IRA with ValuTeachers if it is offered in your area. Go to ValuTeachers.com to learn more.

I would love to read your comments about the Dave Ramsey "Snowball" method.

Which One Are You: The Jeffersons or The Evans?

The NiA theatre group got the Financial workshop series "Growing Savers" started by singing, acting, screening a money webseries, and getting the audience involved to not be afraid to talk about moneY. Why the emphasis on the Y? Are you using your money and Movin' On Up like The Jeffersons or are you struggling like the Evans on Good Times?

The first of a five part series was held in Columbia, SC by the Richland County Public Library (RCPL). They wrote and received a grant that involved the NiA theatre group and bringing in three financial panelists.

Photo from www.blogs.wsj.com

Photo from www.tvtropes.org

The NiA group had the audience warmed up with the song Summer Time from the play Porgy and Bess, the TV show The Jeffersons "Movin' On Up" Theme song, and reminiscing about the TV show Good Times.

Hosted by WIS anchor  Judi Gatson.

                           Highlights:

• Don't Borrow from your IRA - Unless it is for Education or Homeownership. Not for hardship for being unemployed. 
• FICO Score - You need to know your Score. Being late one time after years of on time payment will ding your score.
• Identity Theft - Don't have your SSN on you (purse, wallet, etc). Most Military cards have taken SSN off, but not Medicare cards. It needs to change. Press charges, even if it is a family member stealing your identity.
• Just Do It - SAVE, even if it is $5 per month from your paycheck
• No payday loans - You need to get out of this circle. It's very hard when 85% of your income goes to your everyday expenses.

Congrats to the RCPL on writing and receiving this grant. It is of great service to the Richland County community.

Four more upcoming workshops:  Saving and Budgeting, Credit, Retirement, and Investing will be held at the Library October 10, 17, 20, and 24.

www.myRCPL.com for more info.

So which one are you? Are you money savvy by investing, saving, and/or growing a business like The Jeffersons or are you living pay check to pay check like the Evans on Good Times? I would love to hear from you. Comment below.

Rhonda W.

Financial Workshops at Your Public Library

I'll be attending a Financial Management Workshop offered by Richland County Public Library (RCPL) in Columbia, SC on Monday, October 1, 2012. Below is the description from the RCPL website. If you want to learn more about personal finance, retirement, investing, etc, check out your Local library and see what workshops they offer for FREE.

Money Matters in the African-American Community: Are We Throwing It Away?

Event Type: Community Awareness Age Group(s): Adults, 13 - 18, Programs for Adults Date: 10/1/2012 Start Time: 7:00 PM End Time: 8:30 PM Description:  This community forum will kick off our Growing Savers: Smart Money@RCPL grant initiative to help families make educated financial choices for long-term and day-to-day money matters. We will look at how pay day and title loans, lottery spending, cyclical behaviors, etc. adversely affect our community and why we are not doing more to save/invest and to become entrepreneurs. Library: Main Library    Directions to the Main Library Location: Lucy Hampton Bostick Auditorium