My plan seems easy enough, almost too easy really. But, as most people know, it’s not. Trying to pay down debt and accrue a lump sum of money takes work, a plan, a budget, and a spouse who goes along with the plan! Actually, if it weren’t for my loving, cooperative (and handsome) spouse we wouldn’t even be thinking of purchasing anytime soon. For example, a year ago houses were so far out of our reach, over $500,000 for a fixer-upper, we never even brought up the topic.

However, this year has changed all that with the market completely deflating. For the first time ever out of my husband’s mouth came the words, “I think we should buy a house.” I nearly passed out. After reeling with this news, I agreed and we began establishing a plan.

Step one on our plan:

• Pay down debt

This is most important, especially since it affects step two, boost our credit scores.

One afternoon we gathered all the credit card bills (I’m quite organized and each has a file folder of its own) and began figuring out which ones we could pay off or pay down. We were in a good financial position; my husband brought in a new client and was making more monthly than in the past. We were able to pay off the smaller balances in full right away. The larger balances each received a large payment. Within a period of 6 months, repeating the process each time we had more income on any given month, we were able to pay off our revolving credit card balances.

Of course, this isn’t all of our debt. We still have a car payment that we make sure is paid on time each month and a line of credit, which we were able to haggle for a lower APR for a limited time. I also have a student loan which is almost out of default (yes, I’ll explain this later) that is paid monthly on time as well.

Debt Paid Off vs. Amount Due

So far, so good for step one of our plan. Now on to step two, raising credit scores in a short amount of time.