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Where to begin??

August 5th, 2007 at 06:59 pm

I am going to get out of debt. I really am. I've said it before, but now I feel that we have no choice or we're going to wind up owing a million dollars by the time we're 30 and never going to get our dream house.

I am 25 years old. My husband is 28. We probably owe somewhere in the range of $30,000 in loans and credit cards, not counting two car payments (both of those equal roughly $10,000 left, give or take) plus a mortgage (about $80,000 left). That's a lot of debt, being that together we bring in roughly $60,000 a year before taxes.

So where to start getting out of this messy situation? How did this happen? Im obviously far from a financial genuis. The one thing we have going for us is that we have never paid a bill late (ever) and we have no kids to support, unless you count our dog, which I do.

I've already made some steps that I feel are productive. I cut up *every single credit card*. I am going to cancel my Paypal account. I'm going to do it right now. Just a second........ Ok, Paypal won't let me saying that there is something that is outstanding. I know the last thing I bought on Paypal was a ton of books, and that was weeks ago. I really wanted to do this now while I was "in the mood" to do so, because I don't want to think about it any more. I just want to cancel it. I will come back to that later.

So in addition to getting rid of all credit cards, I have taken what some people have said is drastic and unimaginable in this day and age. I have taken the two check/debit cards from my two checking accounts and given them to a family member who I know will not give them back to me until hell freezes over, and even then he might keep them. I trust him enough to not give them back. I've been living like this for roughly a month now, and I have noticed that it changes a lot of things. First of all, when I go to the bank on a Friday, I have already planned out how much money I need for the week for food, gas, parking, etc. Once it's gone, it's gone. God forbid I actually go into a bank to withdrawl money, which I hate, hate, hate actually going into banks, so I haven't done that yet. There is little convinenves that I miss, such as paying at the pump for the gas and stuff, but it's not a huge deal or anything. It's put me more in touch with what I spend. For example, before I could walk into a Walgreens and have in mind that I was only going to buy toothpaste, but then see other little things that I "had" to have and purchased impulsively. Now, however, when I know I only have $30 for the week, I only buy the toothpaste. It's a good thing, but has taken some getting used to, and I do find times when I think "oh, if I only had my bank card on this Sunday I could go and purchase this overpriced crap that I don't need but it's on sale in the Sunday paper and I neeeeeed it!'

It's also helped a lot food shopping. Before I would just throw a bunch of stuff in the cart, go to the checkout late, swipe the debit card and be on my merry way, wondering who I spent $120 on food that's going to last us one week. Now I'll put something in the cart and say to myself "that's $5... now $8... oh, we don't really need this, we'll never eat it, I'll just put it back and spend the money on something that I know we'll eat for sure." So that's how it's been.

I really want to try to make a budget. I've had problems with this forever being that I work solely on commission and paychecks differ from month to month. I might make $200 less or more a week (sometimes as much as $400 les or more) some months. I try to earn as much as possible every month (I'm a work-a-holic, a good thing for someone who is commission-based) but just can't seem to get a budget down. I plan on sitting down and getting all our bills together and all our expnses and figuring out the MINIMUM that we need each month, and then the rest will go into paying off extra debt and making an emergency savings fund (which as of now is a whopping $200).

I just need a plan and stick to it. I have done that in the past, but as soon as I start doing good, I convince myself that we "deserve" something, usually a fairly big purchase. I keep repating to myself over and over "we don't need any more crap. We have enough stuff as it is. We just don't need it and don't have room for it and I'll only wish I had the $$$ later for something necessary or paying on an extra bill."

I've decided to take the credit cards one at a time. I'm going to pay off a little one first that we owe $500 or so on just to get that feeling of fablousness of paying off one. I'm hoping that will movative me to just keep plugging away. After that, I'll do the higher-interest credit cards from highest to lowest.

I'm excited. I'm really serious about this this time. I told my husband that we'll be eating cereal and Ramen noodles every day for the next few years, but it will be worth it.

By the way, I guess I should mention at some point that I handle all the bill paying, banking, etc. Obviously I haven't done a good job of it, but it's sort of the lesser of two evils. I'll get more into that another time.

12 Responses to “Where to begin??”

  1. Ima saver Says:
    1186344276

    Welcome, glad to see you taking charge of your life. You know you can do it and you will find living debt free is so much more fun!! I have never made more than minimum wage in my life, but I have always saved at least 10% of what I made. (my husband's salary too)
    I own my house free and clear and I guess you could consider me a millionaire, but you would never know it if you met me. I just quit buying stuff I didn't really need and I pay off my charge card monthly. It is a lot more fun to earn interest than it is to pay it. I have already made more than $14,000 in interest this year! That is fun!!

  2. frugalhousewife Says:
    1186346470

    Welcome! The little changes you are making will lead to bigger changes. Paying off a credit card to give you that feeling of success is a great place to start. I paid off two in the past month, and it made me want to work that much harder on the larger debts. I have started looking for any extra money I can find to get me closer to my goal.

  3. jdedit2001 Says:
    1186346685

    It sounds like you are really committed to making some changes. I like that you've switched to using cash instead of debit cards. That's something I might have to try. Best of luck to you. I know you can develop a plan that works for you and stick to it.

  4. LuckyRobin Says:
    1186348973

    It appears you have your head on straight now for where you want to go. Blogging helps so much to keep you on the right track, too. Welcome.

  5. Amber Says:
    1186353017

    Welcome,it seems like you are on the right track; simply cutting up the credits alone is a huge acomplishment. I decided a little over a year ago to get out of debt and with this site was able to. I did the debt snowball also, started with the smallest and worked my way up...good luck

  6. carol Says:
    1186373537

    Welcome. Making the firm decision to get out of debt always seems to be the hardest step. Congratulations on cutting up the credit cards and putting the debit cards away. You are already seeing what a difference that makes.

    Perhaps the best budget is the simple, direct one.
    For me, what has worked best is the cash envelope system.

    Perhaps the cash envelope system, or a variation of it would work, or at least be a good starting point. Please keep us posted.

  7. JanH Says:
    1186374553

    Welcome! Don't beat yourself up that you pay the bills and stuff. So do I. It's just that we are finding a system that works for us and learning to use it! Then we are both going to kick these debts to the curb. I will look forward to watching you win the battle while I am also in the fight!

  8. Broken Arrow Says:
    1186400934

    Welcome... anonymous. Big Grin

    Here's to hoping for a bright financial future for all of us. Smile

  9. Stein Says:
    1186411597

    Sounds like you are on the right track. If you are looking for a book to help, I suggest The Total Money Makeover by Dave Ramsey, or his website. He has helped us and he also advocates using cash to buy things, making a budget and paying off your little debts first to help motivate you. Good luck!

  10. nomorecredit Says:
    1186414720

    Thanks so much for the support everyone! I think this blogging thing and being a part of this community is going to really help me.

    Yes, I'm posting as Anonymous... just in the off chance anyone stubled accross this and realized it was ME. I'd be mortified if they really knew! ; )

  11. Amber Says:
    1186436666

    Amber isn't my real name either, so I know how you feel

  12. crazyliblady Says:
    1186861828

    Hi. Welcome to Saving Advice and congratulations on your decision to change your life. It is a big step to say you are going to do it. The hardest part I think is keeping your head on straight and not feeling bad when you get the bills in the mail and it seems like the balances don't go down. Stay positive and don't let it affect you. I would highly recommend getting one of Dave Ramsey's books or borrowing one at the library if you can't buy it. He has his "baby steps" posted at his website http://www.daveramsey.com. That was enough to get me started. You have already completely what Dave calls the "plastectomy" - or cutting up all credit cards. You are well on your way. Keep us posted on your progress.

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