Working Towards Financial Freedom

This month, I made the final payment on my three-year-old debt consolidation loan. And today, I used the remaining tax return money to pay off the balance of the home improvement line of credit that we used to replace several of our hundred-year-old windows. Later this year, I will make the final payment on another home improvement loan that we used to replace our gutters. The monthly income that will be freed by paying off these debts is over $650.

I am now able to double the amount that I deposit into my savings account each month. And I plan to roll over the additional monthly funds to help pay down credit card debt, Dave Ramsey style.

I already set aside a pretty substantial amount of money each month to pay credit card debt. I am using the snowball method, in which I make the minimum payment on the cards with the highest balances, putting all the extra funds towards quickly paying off the lower balances. The infusion of newly freed cash into my snowball will nearly double the speed at which I will be able to pay down debt.

Additionally, if an emergency arises, such as a trip to the emergency room or a car repair, there is enough money in my savings account to cover the immediate expense. Should this occur, at the next pay cycle, I can make minimum credit card payments for one month, freeing the “extra” cash to replenish my reduced savings account. No longer will unexpected expenses send me into a worried funk for days on end.

Reaching this point in our debt reduction is a milestone that I have been looking forward to for a long, long time. And though we have not yet achieved total financial freedom, we are one significant step further down that road.

Leave a Reply

Your email address will not be published. Required fields are marked *