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.
Where to begin??
August 5th, 2007 at 06:59 pm
August 5th, 2007 at 09:04 pm 1186344276
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!!
August 5th, 2007 at 09:41 pm 1186346470
August 5th, 2007 at 09:44 pm 1186346685
August 5th, 2007 at 10:22 pm 1186348973
August 5th, 2007 at 11:30 pm 1186353017
August 6th, 2007 at 05:12 am 1186373537
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.
August 6th, 2007 at 05:29 am 1186374553
August 6th, 2007 at 12:48 pm 1186400934
Here's to hoping for a bright financial future for all of us.
August 6th, 2007 at 03:46 pm 1186411597
August 6th, 2007 at 04:38 pm 1186414720
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! ; )
August 6th, 2007 at 10:44 pm 1186436666
August 11th, 2007 at 08:50 pm 1186861828