What you are doing at the moment is fine, but i would say at least learn all of the kana and read through a decent grammar book just to get to grips with basic structures etc.
If you are like me and would just prefer a free source of grammar information there is also this site
Tae Kim's Japanese guide to Japanese grammar which i would definatly recommend reading through.
You will at some point definatly need to learn kanji, theres no way around it, but i didn't start learning it until i had learned kana and was a few weeks into grammar.
As for if what your doing is effective, well are you having fun and not getting bored?
If your not boring yourself to death by your methods then it's probably going to be effective for you and you should just stick to it and see what happens, thats the only way you will really know.