I am now doing Dave Ramsey's Total Money Makeover. I am happy to report that I have completed Baby Step One! I have $1,000 in my Emergency Fund! I have also completely paid off one of my credit cards as of today and cut it up along with another one! I still have one un-cut card. I haven't used it (or any credit card) in 3 months. I know I should just cut up this last one too, but there's a part of me that is really scared to do it. I have two credit cards that I'm still paying on and I'll have one of them paid off in March! I am so excited about this. For so long I could not see the light at the end of the tunnel and thought I would have debt forever! It still isn't a pretty picture though. I have:
$2,864 in credit card debt
$12,170 for my car
$73,828 in student loans.
$88,683 TOTAL
That is a lot of debt for someone who is only 24. I first heard about Dave Ramsey from Elaine on October 24. I checked out one of his books from the library just a few days later (More Than Enough) and since then I've paid $690 towards credit cards and my car and also put an additional $510 in my emergency fund. I am going to continue to work like crazy and save like crazy so that way I am not working on Baby Step Two: Start Your Debt Snowball for the rest of my life! It's going to be a little harder once we move in February because rent will go up for me, and once classes start because I will need to make sure I have enough time to study, which will cut in to time at Cafe Monet. But I am confident that I can do it!
I just skimmed the last blog that I wrote and at the time I was worried that in order to pay for school and move out I would have to put money on a credit card and/or take out another loan. I was wrong! Luckily, my roommate Brandon is a mechanic and is going to do my car tune-up for me and just charge me for whatever fluids he has to refill, which will save me about $450! I have already paid for part of my tuition and have it in my budget to keep making payments on it, so I don't have to take out any loans. I also already bought my books. By the time we move out I will have almost $700 set aside just for moving costs, which isn't as much as I would have liked, but I am still really proud of myself for doing all of this without using my credit cards at all or taking out more loans! Just two months ago I used to not think twice about taking out loans. I was going to take out a loan for school plus an extra $1,000 to pay for moving. WHY? If I can't afford it then I shouldn't do it or buy it! Now that I have my emergency fund in place I should never have to use a credit card again or take out another loan (except maybe to buy a house). Never will I take out a loan to by a car, or furniture, or to send my kids to college.
Dave tells me that I should sell my car. Anything that I'm making payments on that I can't pay off in the next 18-20 months, get rid of it! It's just a car he says. If my finances stay exactly the same then it's going to take me 32 more months to pay off my car (which is actually 22 months ahead of my scheduled date!). Still, while I know that selling my car and buying a clunker to drive until I'm out of debt will actually help to get me out of debt earlier, I still can't bring myself to do it. I've had this car not quite a year and a half and I know that if I take care of it then it will last me practically forever. I used to drive a clunker and it's really nice having a reliable car and not having to wonder if I'll need to use that emergency fund of mine to get my brakes fixed for the third time. I am hoping that my finances don't stay exactly the same for the next 32 months. I'd really like a raise or a new job making more money. We'll see how it goes!
Wednesday, December 15, 2010
Tuesday, October 26, 2010
21st Century Adult
My life is nothing like what it was the last time I posted a blog on here. I started that nanny job in July 2009 and hated it. I quit/was let go two weeks later. I loved back to Austin to resume living with my parents and working at Cafe Monet. I also started dating Ross as soon as I moved back. I unofficially moved in with him in about September/October and officially started paying rent there in January. I was working at Cafe Monet as well as being Roman's nanny and also a chauffeur for some kids until March, when I got a job as a receptionist at a law firm in downtown Austin. The new job was a real blessing because I was at my breaking point working so much and still making so little. I started running March and completed my first 10k in May and then started training for a half-marathon. I got up to 12.1 miles before getting injured and having to throw in the towel for this race. I still plan to do more races in the future. I have decided to go back to ACC to get my paralegal certificate starting in January. This is not ultimately what I want to do with my life, but it's a good starting point for now. I will be able to bring up my GPA and make some good money and then one day I think I'd like to go back to school to be a dietitian. I am still working part time at Cafe Monet but that will stop once I start school in January. Ross and I have been together for almost a year and 4 months. We're ready to get our own place now and have started to really plan and budget for it. This is where I am now.
I am so very ready for Ross and I to take the next step together and I am also ready to not have so many roommates. I am very anxious for us to get our own place so I can have my own space and Ross is willing to do whatever he can to make this happen quicker so I will be happier. I've started reading Dave Ramsey's book More Than Enough: The Ten Keys to Changing your Financial Destiny, and unfortunately it's made me start thinking smarter. Ross and I set a move out date for February 1st but that is not a smart, realistic goal for us. I have a lot of debt at the moment ($74,000 in student loans and $3,500 in credit cards). I have an expensive car tune-up that's just around the corner, plus paying for school and Christmas. These are all things that I can afford but paying for them will not allow me to save for moving out unless I put some of it on my credit card or take out another small student loan ($1,000-$2,000). That amount seems really small and insignificant compared to the large sum that I already owe but it really is in my best interest to stop living on credit and just start living within my means. Unfortunately, this will significantly push back our move-out date but I know that it's really the right thing to do. I will feel so much better about myself having paid for these things with cash rather than credit. It is also a good idea for me to have a good amount of savings before Ross and I move out. It's going to be tight for me financially once we move out so I need to have a cushion to fall back on so I don't have to use my credit cards as cushion any more. I'd really like to cut them up (all of them).
Ross and I sat down over the weekend and looked at my budget and all of my debt and we both got really overwhelmed. To only be 24 years old and already have so much debt seems unreal and completely unfair. I feel like I got tricked in to it somehow. I knew that taking out loans would mean I'd have to pay them back later but it was so incredibly easy for me to get the loans and I didn't realize how much I'd borrowed until it was too late. And the interest is outrageous!! After looking at all of this, the two of us were just at a loss for what to do. I am so glad that we talked about it together because I think it really brought us closer together in a way. Ross even said, "This isn't just your debt, this is our debt" even though he has no credit cards, no loans, no debt at all. I don't want him to be responsible for my debt but it made me feel so much better to know that he's there for me and supporting me and that we're in this together. I was really feeling quite lost, helpless, desperate, trapped, etc. until I talked to Elaine the next afternoon and she told me about Dave Ramsey and his Financial Peace University. I talked about it with Ross and I think it's something that we're going to do together. Before we take that step though, I went to the library and checked out his More Than Enough book and started reading it. I also put myself on the waiting list for his The Total Money Makeover: A Proven Plan for Financial Fitness. I think it would be very beneficial for Ross and I to take his 13 week class together but I honestly can't spare the money for it right now without putting it on my credit card. Rather than being impulsive like I usually am I decided to try and learn what I can from him by reading his other books and start making some changes now. I am very optimistic about our financial future now and I no longer feel trapped and like I'll never be able to have a life. I am also excitedly anxious to start investing my money!!
I am so very ready for Ross and I to take the next step together and I am also ready to not have so many roommates. I am very anxious for us to get our own place so I can have my own space and Ross is willing to do whatever he can to make this happen quicker so I will be happier. I've started reading Dave Ramsey's book More Than Enough: The Ten Keys to Changing your Financial Destiny, and unfortunately it's made me start thinking smarter. Ross and I set a move out date for February 1st but that is not a smart, realistic goal for us. I have a lot of debt at the moment ($74,000 in student loans and $3,500 in credit cards). I have an expensive car tune-up that's just around the corner, plus paying for school and Christmas. These are all things that I can afford but paying for them will not allow me to save for moving out unless I put some of it on my credit card or take out another small student loan ($1,000-$2,000). That amount seems really small and insignificant compared to the large sum that I already owe but it really is in my best interest to stop living on credit and just start living within my means. Unfortunately, this will significantly push back our move-out date but I know that it's really the right thing to do. I will feel so much better about myself having paid for these things with cash rather than credit. It is also a good idea for me to have a good amount of savings before Ross and I move out. It's going to be tight for me financially once we move out so I need to have a cushion to fall back on so I don't have to use my credit cards as cushion any more. I'd really like to cut them up (all of them).
Ross and I sat down over the weekend and looked at my budget and all of my debt and we both got really overwhelmed. To only be 24 years old and already have so much debt seems unreal and completely unfair. I feel like I got tricked in to it somehow. I knew that taking out loans would mean I'd have to pay them back later but it was so incredibly easy for me to get the loans and I didn't realize how much I'd borrowed until it was too late. And the interest is outrageous!! After looking at all of this, the two of us were just at a loss for what to do. I am so glad that we talked about it together because I think it really brought us closer together in a way. Ross even said, "This isn't just your debt, this is our debt" even though he has no credit cards, no loans, no debt at all. I don't want him to be responsible for my debt but it made me feel so much better to know that he's there for me and supporting me and that we're in this together. I was really feeling quite lost, helpless, desperate, trapped, etc. until I talked to Elaine the next afternoon and she told me about Dave Ramsey and his Financial Peace University. I talked about it with Ross and I think it's something that we're going to do together. Before we take that step though, I went to the library and checked out his More Than Enough book and started reading it. I also put myself on the waiting list for his The Total Money Makeover: A Proven Plan for Financial Fitness. I think it would be very beneficial for Ross and I to take his 13 week class together but I honestly can't spare the money for it right now without putting it on my credit card. Rather than being impulsive like I usually am I decided to try and learn what I can from him by reading his other books and start making some changes now. I am very optimistic about our financial future now and I no longer feel trapped and like I'll never be able to have a life. I am also excitedly anxious to start investing my money!!
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