Make that all of my credit card debt. The original wording
on that goal was way off!
When it comes to finances, and particularly spending money,
I think my main issue has always been that I don’t set proper goals or have appropriate
priorities. I always lived in the financial moment, so to speak. Cash became an
afterthought, as I never thought twice about using a credit card when I came up
short on a purchase. It almost felt like a second income to me. My patience
factor didn’t make it any easier. If I had to put off buying or doing
something, it felt like I was missing out (which in some cases actually ended
up being true). I think I also used shopping as somewhat of a comfort when I
was depressed or anxious, which in turn just made me even more depressed and
anxious once the bill came.
The good news is that I did have some good habits to work with,
and I knew I would be able to stick to a budget and save when I set my eyes on a
prize. For instance, I’ve used some sort of budget for as long as I can
remember. I’ve always kept track of how much I wanted or needed to pay toward
my bills each month, and I’ve been very good about writing down what I spend. I’m
never late paying my bills, and I always know the exact amount I have available
in my bank account. What I haven’t done, though, at least until recently, is
attempt to track my spending as a whole.
I would like to break out of the “paycheck to paycheck” mentality,
and stop living beyond my means, especially since I have the responsibility of
affording an apartment and its related bills again. I’ve finally hit my
breaking point, my rock bottom. I’m tired of wanting to go on vacation, and realizing
I wouldn’t have enough money to go anywhere without having to use a credit card
for at least some of it. I’m tired of feeling stressed out about money, and
wondering if I should spring for dinner this Saturday because if I do, next
week I might not have enough for gas or groceries. And more than anything, I’m
tired of having to make payments to credit cards at all. It makes me feel
trapped, overwhelmed, and tired. It feels like my freedom is limited to a
certain degree.
If I’m honest with myself, though, this is all my fault. I’ve
been blessed with good health, so I don’t struggle with medical bills. I have
been fortunate to hold a job with a stable company for over 11 years. It’s my
behavior that needs to change to make things right. Much like my weight loss
journey, I need to change my lifestyle, and set my priorities straight to
unlock myself from this mental and emotional prison.
Last year, I began making positive changes. For one, I
decided to start a savings account again. This time, instead of opening an
account with the same bank as my checking, I opened it with a separate bank
that has a much higher interest rate. I don’t expect to make much off the
interest, but I figured it couldn’t hurt to make a few extra cents each month.
My main reason for using a separate bank was really that I didn’t trust myself
yet. In the past, I’ve been too tempted to use what was in my savings and
seeing the amount grow on my dashboard and knowing it was so easy to transfer
just wasn’t working. I’ve also turned my savings amount into another bill,
which I make sure to pay first before I consider the amount I have left in my
budget after bills. So far, this has allowed me to save just over $1100.00 (with
a little help from my recent tax refund).
Another thing I did last year was list all of my bills in an
Excel spreadsheet. I included relevant information, such as:
Due date
Minimum payment due
Current total amount due
Amount I wanted to (or could) pay
Interest charges
Debt amount left after making my payment
I figured this would be a good start in understanding where
I’m at, and truly seeing where I had ended up financially. It has been. Sometimes
this spreadsheet has been depressing and overwhelming, which is especially true
when I consider my student loan. I’m not currently able to make a payment that
covers the full interest amount, so that balance actually goes up a little each
month. It has been good, though, because I get to see my credit card balances
go down and it feels like I’m making some kind of progress. Maybe not as much
as I would like to, but you have to start somewhere.
The most important thing I have started doing, though, is
tracking my “other” expenses. Everything from groceries to gas to a night out
on the town. Previously, the amount I had left over after bills was nothing
more than a meaningless figure. I never saved any of it, and once it was gone, I
found myself using one of my credit cards to cover whatever else I wanted,
continuing that frustrating and never-ending cycle. I have stopped using my
credit cards now, and so far, I’ve been able to handle life just fine without
them.
I’ve also started using the EveryDollar app on my Android
phone, which is Dave Ramsey’s app to track expenses down to the cent. You can
create your own categories, which has been very useful. For example, I can
assign a specific monthly budget amount to groceries, and do my best to stay
within that budget. It has really helped me to see where my money goes each
month and how quickly I can spend it if I’m not more mindful of my purchases. In
fact, being on this stricter budget has really helped me to question my overall
purchases. Do I really need this right now? And maybe I do. Or maybe I can put
off buying it because something else is more important at the moment. Maybe I
don’t really need it at all, which has happened a few times throughout this
process. I’ve found if I question myself in this way, it really makes me think
about what I truly need vs what I want, and I’ve ended up spending so much
less.
Basically, I’m on a modified version of the Dave Ramsey
plan, and I’m currently in Step 2. I will probably be in step 2, barring any major
income changes, until the end of 2019, at least when it comes to paying off the
credit cards. That student loan is still looking like Mt. Everest, but I’m
trying to have faith that it will crumble with time.
