money money money money...MONEY!

...that was like the song, in case you missed that :)

OK. So. Half the point of this whole blog experiment, is for me to get a hold of my finances and destroy my debt. As previously noted, I've finally become serious about slaying this dragon as I have come to realize certain things.

1) I am spending as much on old debt monthly as I am on living expenses.

2) Once these are all paid off, I'll have an extra ~$600 a month to save/invest/blow on lots of candy and booze (the latter is probably not the best choice...most fun however)

3) If I EVER want to be able to start my own business (wedding/event planning) or eventually be a stay-at-home mom (I said EVENTUALLY!) it would be much easier for me to come up with the $700 a month for living expenses rather than the $1300 that it cost me to live each month now!

SOO...I started putting it all in the checking account and writing down where it goes. Having to use the debit card for one Diet Coke and then record it, makes you think twice.

I know there are tons of financial gurus that tell you to use the "envelope" system (put your budget for the month for groceries in an envelope and when its gone, its gone etc). I have discovered that if I use the "electric envelope" system on Mint.com and actually keep up with it, it helps me to see where everything is going. Plus, they email me with all of the finance charges that the credit cards slap me with and email me my apr, so it's right there in my face. This helps to keep me pissed off enough to decide that paying more on these cards is better than buying a new pair of shoes.

I am also singing the praises of ING Direct for their savings accounts. Now many people use them for long term savings because they offer a 1% interest on savings (!), but I have found that the ease to transfer money from my Chase account to my ING accounts PLUS the fact that it takes a few days to transfer it back to my checking (No "emergency" shopping trips!) has made it the perfect place for me to hide money from myself.

I currently have one account for paying off CC's and another for "house" related savings. The CC payment account is only $120 short of paying off my Express bill!! WHOOHOO!!

Bottom line is that, you CAN do this. I never believed the "every little bit counts" towards these huge CC balances, but by knowing where all of those "little bits" went, and by transferring a "little bit" at a time into an ING account, I can really see how it adds up!

Good luck to everyone who is trying to slay this dragon with me. We're totally St.George and can do this! Just takes some weapons!

Digging out

or: "How I am slowly getting myself out of debt"

I am just like the majority of Americans...well, only in the sense that I have personal debt. Not counting our mortgage I have just about $15000 of credit card debt. That includes 3 bank cards (one that has my car loan consolidated onto it...had to do it to get the house), one best buy card (laptop only, never used it again...and never will), one express card (dumb, i know), and a partridge in a pear tree.

I am attempting to use Dave Ramsey's Debt Snowball Method but I have been unsuccessful thus far. Why is that you may ask? Well after looking at my lifestyle and payment plans I have come to these conclusions

1) I was not angry enough at my debt. Yeah, yeah, I understood that just paying the minimum means you'll be paying forever blah, blah, blah...but I wasn't REALLY pissed off at the amount of money that I spend every month on crap I don't even have anymore...like the washer and dryer that my ex still has. After cutting back on spending and looking at my budget, I realized that I spend the same amount on my debt each month as I do on all of my other living expenses

WTF?!!?

2) I thought I was being responsible by using cash for purchases rather than my debit card. Yeah, it made purchases more "real", but there was one small problem. Since I get paid daily in cash (tips) from work, if that $ never makes it into my account, I never really know where it goes. I used to put all of the "big bills" in the account and keep 5's and 1's for random spending through the day. But this led to spending more each day. Not anymore. ALL cash goes into the bank and I use the debit card for EVERYTHING and...

3) I am using my check register RELIGIOUSLY! Might seem simple to some of yall, but I had gotten in the habit of using my phone to check balances or online checking...led to 2 NSF fees in a week...WTF!? again!

4) NO SPENDING IF IT ISN'T BUDGETED! Again, may sound simple, but for YEARS I have had a budget...and still managed to spend more than I had. I had to seriously stop spending. No new clothes (I have WAY too many...more on this in a later post), no quick trips to Target or Wal-Mart, or my personal demon, the Dollar Store. Now I honestly do have some budgeted for fun shopping/house stuff since we just moved in and do need some "stuff"...but not much...and it gets recorded.

5) I set up a .ING savings account. It lets me move money electronically from my checking account into a savings account that I set up just to pay off debt. Now, you can set it up to automatically deduct, but since I never know exactly how much I will make each week/month I prefer to do small transfers every few days of whatever I can spare. Less painful than transferring $100 at a time and at the end of each month, I am going to empty this account to pay down one CC.

6) We are setting up a joint checking/savings account for house expenses. One of my problems has always been that when I have extra $ to pay on a card, I am afraid that the next month I will come up short for bills. So starting this month I am putting enough to cover next month's mortgage (since that is obviously the most important bill!) in savings and then using what's left to pay down a card.

First on the chopping block, Express. It has the lowest balance ($537), therefore I can pay it off quickly then roll that payment into the next card...Best Buy. I'll see if I can make some type of graphic to keep up with my progress.

The hardest part of this is being in my 20's and not doing the things that my friends are doing in order to save $ and pay off debt. No fancy dinners out, no big nights out drinking, no expensive vacations, no shopping sprees. But in the long run (hopefully not that long...maybe I can do this in a year?) I will be debt free and able to fully love life!

Anyone out there with me who wants to share their progress and hold each other accountable?