My New Stimulus Plan

I finally got my husband to agree to let me start paying off all of our bills early! I spent most of my day yesterday planning a budget and actually writing down 3 scenarios of how we can pay off our debts early.

We have 5 financed accounts (Mortgage, signature loan, 2 cars, and a student loan that I co-signed for someone on) that we pay on in addition to regular household bills (utilities, insurance, phone, etc). Thankfully, none of this is credit card debt! But, that's a ton to be paying on! Don't get me wrong, we don't have a problem paying our bills and we most certainly have not taken on more than we can handle (even if I were to quit my 2nd job) but we both have jobs that are not so much, economy proof. So I feel that the less we are actually obligated to the better off we would be if, God forbid, something should ever happen.

The first option I came up with is to pay a couple hundred dollars in addition to the obligated amount for each account. That would permit us to pay off everything slowly at one time, with the last payment being made in June of 2011.

The second option is to pay at least $1,000 in addition to the obligated payment on 1 account until it is paid off while maintaining the regular payments on the other 4 accounts. In this scenario, 4 out of the 5 accounts would be paid by November 2010 and the 5th account paid off in 2011.

The third option is to keep putting money in a savings account until the balance in the account is high enough to pay off one of the accounts. Then, build it back up again and start over. The appeal to this is that if one of us does loose a job during the course of this, then we would have the money to live on.

We ultimately opted for option #2, as option #1 is too hard to keep up with and option #3 is not far off from what we are doing now and we have not been successful. It is too easy to build that savings account up and use the money for a new TV or a new deck, etc. I plan to continue to save 100% of my income from my second job. Being that my husband is on commission, I based his income on the smallest check I have ever seen him bring home. Anything he brings home over that amount we can either save or use as 'fun money.'

Things are going to be tight until about November of this year which is when our first bill will be paid. When that particular bill is paid off we will have an additional $250 to toward our everyday living. A lot of people would say that I should take the $250 and put it towards one of the other accounts, but I am being realistic here. We spend a lot of money! And, while I am trying to do better, I know that if we don't give ourselves some leeway this will never work. We are in this for the long haul!

Wish us luck on our little journey! If we don't make it in the exact time frame I will be okay with that. Just making headway will be good for me!

By the way, for my research I used Bankrate.com and mint.com (although mint.com required too much information and work on my part so I quickly abandoned it!). Both are great sights.

If anyone has ever done this or has used any of these methods, please let me know how it was. Or, if you have any suggestions or advice I am all ears!