Here in Michigan, we have had so many foreclosures. We have had three here on the lake that sold for well below what they should have. That, in turn, gives me a low appraisal for refinancing with debt consolidation.

So, I am now going to Refinance at a 4.5% on a 15 year loan and pay off my debt on the side.

That way, I still have equity in my home, if needed.

I also crunched some numbers and I believe with a very agressive debt snowball plan, I can have my debt paid off in 20 months or less. I am going to apply all of my beach money, cleaning money and money I get from my husband to get that debt paid off.

Once I close on my loan, I will drain most of my accounts and put it towards debt, except for what I need to pay my taxes in September and a small emergency fund cushion.

I will still keep an extra checking account open and add a little to it here and there for X-mas and Vacations.

My husband and I have re-worked our yard and we will be having an extensive garden this year, with lots of canning, freezing and root cellaring to help with grocery costs.

I will post a different entry on all we are doing in these economic times to live within our means.

As you all can see by the debt in my column on the side, I own some money to credit card debt, a car loan and my son's college stuff.

Anyhow, I talked with my loan officer yesterday. The one that holds my mortgage. Right now I am sitting on a 6.75% fixed loan and have 26ish years left to pay off approximately $106,000. Along, with that, if I snowballed my credit cards, it would take 35 months to pay them off and I would have paid interest in the amount of $4,400.00

But, the problem is, that after the end of this year, I loose half of my income, which makes it very strapping for me to pay debt other than mortgage. So, my loan officer suggested a new mortgage.

Here is what I am getting after 2 hours on the phone. A new mortgage for $130,000, with a fixed rate of 4.5% on a 15 year loan and all of my debt paid off. I will be tying my taxes and insurance into that loan (I have always paid them on my own, but this way, I really don't have to worry about that).

Yes, it is a very agressive loan, because my payment is higher (of course). Right now, I pay $735/month and my new payment will be $995; a difference of $260.

But, for me, this makes it easier to concentrate on one payment and I can add any additional monies (my summer job, tax returns, etc.) to my mortgage. My goal is 12 years (when I turn 60) and be completely mortgage free.

As for my children. One has graduated from college and is on his own and my two youngest (14 and 17), both already have college accounts totalling around $18,000 each.

Also, without any extra debt, I will be able to save quite a bit before I loose half of my income at the end of the year. I am looking at somewhere between $8,000 to $12,000 by December, along with what I already have saved.

My Jeep should get better gas mileage now that I won't owe anything on it. LOL

My other housing bills (electric, gas, phone, internet and satellite) total around $300/month; Groceries and Entertaiment are controllable.

And, the restoration of my home (the Cottage) should all be finished by the end of this year.

So, yeah for me. Here is to being debt free, other than my mortgage.

It is scary to me, but I think I am making the right decision.