Tuesday, April 28, 2009

Saving for Something

If you are saving for something; do you tend to spend less?

Back in May 2005, we financed / leased two new automobiles. We were told to pay these off within 3 years (lease) and within 5 years (purchase). Soon after I found an article on doing snow ball payments. The idea was that within 7 1/2 years you could pay off all of your debts including your mortgage. We tightened our belt straps and started on our journey.

By applying 10% of our take home income per month to our shortest debt we paid off the lease portion on one car. Then we applied the extra 10% to our financed auto, plus the payment that we used to make to the lease company. By March 2007, we paid off our auto and rec. our title.

In most circles we would be considered debt free but I "still" consider a mortgage a debt. Our next step was to apply the 10%, lease payment and the car finance payment to the house.

May 2008 we needed to make another auto buying decision. The result was a used car and no financing.

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