The Debt Diet Challenge Week #2: Our Participants Weigh In

Erin

I’ve made it to week 3 of the Debt Diet plan and so far I like what we’ve been able to accomplish. I’ve successfully refinanced both of our cars and have been able to drop the APRs for both of them down to 4% or less—an accomplishment that I’m extremely excited about! I’ve also looked into changing our auto insurance and have found a rate that will cost us $30 less a month. So, over the last three weeks, I’ve managed to save us $200 a month—that’s $200 more to throw at debt or put into our savings account.

One of the struggles I still face is getting our lower balance retail cards paid off. We are notorious for signing long-term 0% interest finance deals and have some low balances to pay off on these cards. I feel like getting these cards paid off over the next 6 months will help to boost my self-esteem but the Debt Diet recommends paying off those debts that carry the highest interest rate. This is a huge change in the way I think and I’m still not comfortable with it. I like the feeling of getting debt paid off and will feel like we’re accomplishing things more quickly if we get those piddly, no interest debts paid off in the next 6 months. Since our higher interest debt is due to be paid off in the next year, what is the true risk of getting the no interest debt paid off first so I can start tackling the high interest debt? Is it better to pay lower interest or is it better to feel like you’re making progress? I’ll be asking Jean this question when I talk to her later this week to find out her take on it.

What I do find great about this experience has been having an outsider help to hold us accountable to our plan. Holding each other accountable hasn’t worked for us in the past, so I would highly recommend finding a friend outside of your marriage or family who you have to report to on a weekly basis; someone who will challenge you when you spend money you shouldn’t and help praise you when you spend money the way you should.

Till then I’m,