Baby Step #2

I don't adhere to the Dave Ramsey plan, as I've mentioned before. I'm too much of a numbers girl, and the thought of paying off smaller debts without taking into consideration interest rates just bothers me too much. For many of the credit card debts, the lowest balances were the highest interest rates (due to several sizable balance transfers with low fixed rate offers). I understand his rationale, that it's more a psychological thing, and that if you're paying off debt quickly the difference in interest is nominal... but if you have a lot of debt, even a nominal difference in interest can make a big difference. 

So far I've really only focused on paying off credit card debt. In July 2008, we hit our highest outstanding balance - a total of $48,749.15.   Today, a little over a year later, we're down to owing $22,926.12.

But Dave Ramsey's Baby Steps program calls for paying off more than just credit cards. He recommends in Baby Step #2, which comes after building a small $1000 emergency fund, listing and paying off debts smallest to largest (except for the mortgage). While I'm not following this plan, I'd ultimately like to get to the same end point and be debt-free. Here's what we would have to pay to get there: 

1. Student Loan #1: $   1,101
2. Student Loan #2: $  1,328
3. Car Loan #1:  $  6,054
   
4. Credit Card #1: $  6,500
5. Car Loan #2:  $10,852
   
6. Credit Card #2:   $16,288
7. Student Loan #4: $24,548
8. Student Loan #3: $24,587
   
9. 2nd Mortgage:  $26,428  (DR says to include it if it's less than 1/2 your annual income)

TOTAL, not counting 1st Mortgage:  $117,686

That's a big number, and makes the amount we've paid off so far seem so measly. I guess, to be fair, we've also paid off quite a bit on each of those other items that isn't included in the total (on the two vehicles we're paying off about $8500/yr in principal, and we're paying about $3000/year in principal on the student loans).