Okay, so I thought I posted this here, but it was another group I’m in. Apologize off the bat for the length, but I got carried away with responses (that actually may be relevant to some of us) and some tips based on a year of making plenty of mistakes and finally figuring out what works…….
Also, can’t post my Excel spending tracking chart, but there’s a good descrip of it below:
First, on cards. I didn’t close my unpaid-off cards because I don’t want my credit score to drop (to save on my insurance premiums, etc). However, I don’t carry them. If you carry them, or even keep them, you always have a need to use them.
It’s scary to get rid of them when they’ve been a crutch for so long. But if you are truly serious about making a change in your life, you need to actually make the change. I was on the fence for a while – wanting to make a change and stop debting, but never doing it. I started telling people, “I can’t afford to [go to lunch, etc] this week. Can we go next week?” Or, in some cases, I flat out said that I didn’t have the money to do some expensive activity a friend proposed. And when I started dating my boyfriend, I told him about my situation.
As soon as I started admitting to others that I had a problem, I felt like I’d been freed from this horrible, dirty secret.
I also started watching Suze Orman every Saturday (well, recording it, and watching it later). I started watching Dave Ramsey every day. I started reading as many books as the library had to offer in the world of personal finance. Some were great. Some were eh. Some were a complete waste. But I started learning. And making changes.
Oh, and probably the most effective thing I did was to create an Excel sheet with a few columns (month, date, $ spent, overall category, smaller purpose, location, and deductible y/n). I wrote down EVERY single penny I spent in this Excel chart – from $57 at dinner to $.60 library fine. Wow. I started spending less. And I really knew what happened to my money and where my budget categories weren’t realistic (for example, my $20/mo for pets was actually $25 in real spending). I was also ashamed for the first two months at how much money I wasted. Money I didn’t have.
I also created a “debt watcher” chart. Made columns with the name of each debt and below that, the amount I started with. I listed out each pay date, and each pay date (I pay everything twice a month to reduce the avg daily balance), I write down the new debt amount. The farthest right column is a debt total. I can watch my total debt (which is a bit overwhelming) go down every time I make payments. I feel like a success because of this.
Despite a fency year, I paid off $4K. This next year, I plan to pay off $15K. That will still leave me with about $36K in a loan and a CC. It was much faster to get into this mess than to extricate myself from it. But I’m sick of it. I’m finally sick of it.
What will make you sick of it?
A couple good resources:
- Suze Orman – anything but esp “9 Steps to Financial Freedom” and “Women and Money”
- Mary Hunt – anything. Plus, she has a free daily e-newsletter and a (CHEAP – maybe $26/year?) subscription web site with great tools, including a debt repayment calculator that tracks your repayment plan and is the best one I’ve seen by far. http://www.debtproofliving.com/
- Dave Ramsey – Total Money Makeover
If you have weight problems too, it’s not surprising. You’re filling a void with money and food. Trust me. I am a Weight Watchers lifetime member – 3 years at goal and counting. Tracking what you eat AND what you spend every day is really successful.
People who get out of debt aren’t any smarter or more capable than the rest of us. They just mean it. Every day, they wake up with the intention to follow through.