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This article is part four of a series I’m writing explaining exactly how my family and I paid off over $90,000 of consumer debt in less than two years.

By April 2004 my family and I were 4 months into our commitment to pay off all of our non-mortgage consumer debt.

We had trimmed our monthly utility bills, cut back on our entertainment expenses, and created a workable budget.

By squeezing extra cash out of our budget and selling off $16,000 in stock I had purchased through my company’s employee stock purchase program, we had already paid off nearly $26,000 in debt.

Our monthly household ”take home” pay at this point was approaching $5,500 a month of which $2,500 was going directly to pay off debt.

Debt Reduction Tools of the Trade:

My Checkbook Registry Spreadsheet:

In the previous article in this series, I mentioned how important Dave Ramsey’s written monthly budget forms were in helping us prepare and tweak our monthly cash flow.  We were effectively spending our monthly income on paper before we ever spent a dime!

To help compliment our monthly written budget I created a simple Excel based checkbook registry to keep track of account balances in my checking and savings accounts. 

Neither my wife nor myself had been a superstar when it came to keeping our checkbook registry balanced.  Manually writing our transactions in our check book registry was an easy, but monotonous task.  On more than one occasion we neglected to updated our checkbook registry resulting in numerous overdraft charges from our bank!

At $34 a pop, the last thing we wanted to do when we were spending out of control was to accrue additional overdraft charges!

Creating the checkbook spreadsheet in Excel made the process of balancing our savings and checking accounts very easy and I am happy to report none of my accounts have been off by a single penny over the last 6 years!

These spreadsheets also allowed me to back track our finances and put together these “before and after debt tables” you see at the beginning and end of each of these articles in my family’s debt free success story.

It’s amazing how reassuring it is to know exactly how much money you have in your bank accounts and how much money you are going to spend each month (from our written budgets).

My Debt Snowball Calculator Program:

Perhaps the most motivational debt reduction tool I created while my family and I were repaying our debt was my debt snowball calculator program.  Designed to be as simple as possible while still allowing plenty of flexibility, the debt snowball program is able to project when your actual “debt free” date is going to be.

Call me a DORK , but I enjoyed running various scenarios through my debt repayment calculator to determine how quickly my family and I could be debt free.

It was through this debt snowball calculator program that I began experimenting with how “extra” payments above and beyond our monthly “snowball” payments could really speed up the time that we would become debt free. Now, if only I could come up with some extra cash…Oh wait!  I know…

Time to Sell My Motorcycle:

One of the first credit lines my family and I paid off as part of our debt snowball was the loan for the motorcycle I had purchased only one year before. I’ve written in the past about how dumb I was to purchase a brand new $8,600 “high performance” motorcycle when I had never even ridden a motorcycle before (I just had to have one because “all” my friends had one too).

The motorcycle was a year old now and based on used prices in my area, I figured I shouldn’t have any problem selling the motorcycle for around $6,000. Now that my family and I were on a path to get out of debt, I was excited about the prospect of selling off my motorcycle and applying the proceeds to our family’s debt.

Based on my debt snowball calculator, selling my motorcycle was going to shave almost three months off our projected debt free day!

I’ve written numerous articles on selling used cars on Craigslist and getting the best price when selling your used car and adapted many of those techniques to selling my motorcycle.

I placed a classified ad on Craigslistand also posted it for sale on several online motorcycle discussion boards. After several phone and email conversations a gentleman from New Jersey drove up the East Coast to Quincy, MA (where we were living at the time) and gave me my $6,000 asking price for the motorcycle!

It was now the end of June, 2004 and the momentum in our debt snowball was building. The proceeds from selling my motorcycle along with the extra $2,000-2,500 per month we were squeezing out of our budget enabled us to pay off the next debt on our list (Student Loan #2)! Six months into paying off our debt we had reduced our total balances from $90,415 to $53,678!

Selling Off Some Other Personal Items:

Encouraged by the sale of my motorcycle, I began looking for other items around the house that I could sell to keep our debt snowball rolling. 

Over the next month I sold the following items on eBay:

• An electric guitar: $400
• An electric guitar amplifier: $475
• Comic Books: $130
• Miscellaneous Musical Equipment (effects pedals, cables, etc.): $100

All proceeds from selling this “junk” went directly to paying off more of our debt!  In the past I probably would have taken this additional $1,105 and blown it on electronic equipment or wasted it some other way, but not any longer!  My family and I had a plan, we were going to be debt free (except our mortgage)!

It was now time to move on to the next debt in my family’s debt snowball’s cross hairs, the $13,000 remaining on our USAA Credit Card…

Check back tomorrow for the continuation of my family’s debt reduction story!

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