Sunday, February 19, 2012

Debt Reduction

I love to see my "available balance" grow when looking at my credit accounts!  It gives me hope and makes me not want to use plastic for things anymore!

Honesty:  I am that girl.  I have debt and it is MAXED out!  And it has been maxed out for as long as I remember.  I would pay it down, then use it up again.  Debt has seriously been a revolving door with my wallet.  Whenever I would get a large amount of money (like tax refund or Christmas bonus), I would pay off something small or split it between two larger ones.  And within a couple months (sometimes less) I would have used that card again and run up the balance.

Where did this get me?  Living paycheck to paycheck just because of my debt payments!  I mean, how ridiculous!?  I made more than enough money to buy the things I needed/wanted (or save for the more expensive ones).  But because the majority of my paycheck (after the basics:  rent, utilities, gas, groceries) went to debt, I never had any money for fun.  Talk about ridiculous! 

"So why didn't you just budget?" you ask.  Oh, I did!  Honey, I could do up a budget that would BLOW YOUR MIND!!!  But I never had the will power to stick to it.  I hated being the person saying I can't go cause I can't afford it.  Or sitting there watching all my friends eat while I drink water.  I should have...but I didn't.

And now, as a 30+ married woman, I'm having to be responsible.  Something I should have done 5-10 years ago!  But I am loving this!  Because I've paid off two store credit cards (the ones with the ridiculously high interest rates) and I'm watching the available balance of two MasterCards and a loan slowly become bigger and bigger.  It is one of the best feelings in the world!!

How did I do it?  I made a conscious decision, along with my husband, that we were going to focus on debt reduction in 2012.   (We actually started last year, but we paid for our wedding so all extra money went to that for 8 months.)  We locked up our cards in the fireproof box.  The only plastic in our wallets are the debit cards.  They only time one of them has come out was when the black car broke down last month.  All extra money has gone towards debt and savings.  Whenever we've seen a big ticket item we wanted when we had extra money, we would discuss why and if we really needed it right this very moment.  And if we decided it could wait we put $100 in savings.  When I got my tax return I split it between my two smaller balanced cards and got them paid off.  This month I get three checks; the middle check will focus on debt and get another card almost paid off.   I've also taken from the "snowball effect" from Dave Ramsey's teachings.  Once you pay off one card, put that money toward the next card along with what you were already paying.  At the rate I'm going, provided there are no hiccups (aka, car issues), I will have the credit cards paid off before the end of the year and the loan will be paid off in 2013. 

And that thrills me to no end! :)

Happy Sunday, folks!

1 comment:

  1. That's so great! I really recommend his book The Total Money Makeover.
    And cut up all the credit cards but one. That way the only thing you can do on the accounts is pay them down!
    Of course, with Dave, Baby Step 1 is to save $1000. That way if an emergency arises there's no need for credit cards.
    Debt free is great!