Baby Step One COMPLETE!

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!