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I think the breaking point was when, for a variety of reasons, I was unable to pay my tithe (to the church) for three months last fall. As I was agonizing over this (yes, it is just that important to me), I ran across a book I’d bought some time ago, Dave Ramsey’s Total Money Makeover. I saw Dave Ramsey present at a faith-based conference in 2008. The thing that appealed to me about the plan he proposes is that it includes contributions to church. So, I began reading the book and making a plan to get it together. In fact, I boldly proclaimed that I was starting Operation G.I.T (Get It Together) in 2010.
So, I spent January praying that the end of the month (and therefore, payday) would come quickly (I had a 6 week period between my December and January’s pay dates) and putting a plan together. I created a realistic budget and faced the facts about my debt.
For the record, I am starting this journey with a personal/consumer debt of $34,986.96. This total includes a few outstanding medical bills and $400 that I borrowed from my dad. This total does not include student loans or my mortgage.
Ramsey proposes the debt snowball method of paying off debts. I ordered my debts from the least amount to the greatest. These range from $9.02 (a medical bill) – $9363.31 (a debt consolidation loan). For February, my debt snowball goal was to pay off the three medical bills and one credit card, for a total of $287.28. According to the debt snowball plan, I should be able to take this money and put towards the next bill on my debt snowball list.
By the time I got paid at the end of January, I was ready to implement my plan for February. On that day in January (January 29th), I cut up my credit cards. (For the record, I kept two cards to cover work related travel costs, but I removed them from my wallet.). It was an emotional act for me – letting go of the credit cards was letting go of my safety net and ultimately, my freedom to do what I wanted when I wanted to do it. But I am definitely glad I did – I shed a few tears, but I also understand that it was my first step to financial freedom. My mind was made up.
I didn't realize that I would have to wait until early March to really see how things worked out in February, so stay tuned for the February update.
Cheers,
Tracy
