Milestones this week!
So, yesterday, just for the fun of it, I decided to check out my credit score. It went up again! Happy Dance! I looked at my debt ratio. In December, it was 88%. Yesterday, it was down to 74%! In only a few months. I can't tell you how stoked that made me.
And I paid off the Litter Robot account! I got it in February and it is May and the thing is already paid off.
And lastly, because this is a big deal - I'm under $20k left on my debt!
I want to thank everyone who has helped me behind the scenes. Not for giving me money, but for cheering me on. There are the people in the Financial Awareness for Everyone group - who answers the hard questions you have about finance. And I mean the HARD questions.
I also want to thank my friend and my accountability partner Anita. She has been a rock solid sounding board and cheerleader. I talk to her nearly every day even though we are thousands of miles apart.
So, how am I doing this? First, I'm honest with myself and how I'm looking at money. I had no clue about money. It wasn't one of those things we talked about in my family. I'm trying to change that with my son, but it's hard. I mean, how much can I really teach him until he starts earning his own money? I mean, we opened his checking account last year, and he hasn't touched the money in there at all, even though I handed him his debit card. And he took a class in school about money and credit, so he's learned the book definitions of them and some practical applications. I guess I will just have to teach him from afar after his moves to his dad's.
Second, I have a plan of attack for this debt. First, I built myself a cushion of $1000. That's my cushion account, for unexpected expenses. If I spend money out of it, I have to replace that money before I pay down any additional debt beyond my minimum payments. It's in a separate account so I have to consciously take it out of that account and spend it. No more blind spending.
Then I put my debt accounts in order - from the smallest dollar amount to the highest. I created a running total on my bill spreadsheet for each account and for the debt in general. I print out my paystub every 2 weeks and I plan how I'm going to spend it. I have a separate grocery and gas account. I put money in my cushion fund to help it grow bigger. I make all my minimum payments.
Then if I have anything left over, I pay down whatever debt I'm working on. Like today, that was the Litter Robot account. Now, today, I had some left over after I paid off the account. So, I started paying off bills scheduled for next pay period. Anything left over after that goes to the next bill.
I use every dollar in my checking account. I might leave a couple for Stash Your Cash, but it's pretty close to the penny. Whenever I get a bill in, I plan which paycheck that money is going to come from. Yesterday I got a few bills that didn't have due dates until June. They didn't need to be paid this pay period. I could pay them with my 5/29 paycheck. I know when each of my recurring subscription payments are due and those are on my bill spreadsheet. You have to know where your money is going to go before you spend it. This helps prevent overspending.
Third - I'm honest about where the money is going. Yes, I know I said that before, but it is important. Be honest with yourself and be honest with your partner. Granted, I'm doing this alone. But I have a great accountability partner who talks me off the ledge from buying too much yarn. Or asks how I'm going to pay for another expensive toy *coughLitterRobotcough* *coughKirbycough* Do I really need it? Yes, to both, by the way. Best investments I ever made. She also celebrates the wins with me. And listens/reads when I complain about the setbacks.
Fourth, I figure out where the money has to come from in order to pay off my debt. I knit and crochet and I sell my creations. I also am selling off parts of my Mom's Longaberger collection (she's downsizing and I get to keep the money), a friend's Precious Moment's collection (the money goes to her), my Precious Moment's collection and stuff around the house I no longer want or need. Every dollar (that I get to keep) goes towards my debt. $1 here, $2 there, $10 there. It all adds up and I've been able to make additional payments on debts because of it.
So that's my system. And I have a prize in mind. Reward system, if you will. Once all my debt is paid off, minus the mortgage because that's another step, I'm buying myself a new car. I've wanted one for the past couple years, but couldn't see how I could afford it with all this debt to pay off. So, my reward is a shiny new Subaru.
That's all for tonight. Talk to you later!
So, yesterday, just for the fun of it, I decided to check out my credit score. It went up again! Happy Dance! I looked at my debt ratio. In December, it was 88%. Yesterday, it was down to 74%! In only a few months. I can't tell you how stoked that made me.
And I paid off the Litter Robot account! I got it in February and it is May and the thing is already paid off.
And lastly, because this is a big deal - I'm under $20k left on my debt!
I want to thank everyone who has helped me behind the scenes. Not for giving me money, but for cheering me on. There are the people in the Financial Awareness for Everyone group - who answers the hard questions you have about finance. And I mean the HARD questions.
I also want to thank my friend and my accountability partner Anita. She has been a rock solid sounding board and cheerleader. I talk to her nearly every day even though we are thousands of miles apart.
So, how am I doing this? First, I'm honest with myself and how I'm looking at money. I had no clue about money. It wasn't one of those things we talked about in my family. I'm trying to change that with my son, but it's hard. I mean, how much can I really teach him until he starts earning his own money? I mean, we opened his checking account last year, and he hasn't touched the money in there at all, even though I handed him his debit card. And he took a class in school about money and credit, so he's learned the book definitions of them and some practical applications. I guess I will just have to teach him from afar after his moves to his dad's.
Second, I have a plan of attack for this debt. First, I built myself a cushion of $1000. That's my cushion account, for unexpected expenses. If I spend money out of it, I have to replace that money before I pay down any additional debt beyond my minimum payments. It's in a separate account so I have to consciously take it out of that account and spend it. No more blind spending.
Then I put my debt accounts in order - from the smallest dollar amount to the highest. I created a running total on my bill spreadsheet for each account and for the debt in general. I print out my paystub every 2 weeks and I plan how I'm going to spend it. I have a separate grocery and gas account. I put money in my cushion fund to help it grow bigger. I make all my minimum payments.
Then if I have anything left over, I pay down whatever debt I'm working on. Like today, that was the Litter Robot account. Now, today, I had some left over after I paid off the account. So, I started paying off bills scheduled for next pay period. Anything left over after that goes to the next bill.
I use every dollar in my checking account. I might leave a couple for Stash Your Cash, but it's pretty close to the penny. Whenever I get a bill in, I plan which paycheck that money is going to come from. Yesterday I got a few bills that didn't have due dates until June. They didn't need to be paid this pay period. I could pay them with my 5/29 paycheck. I know when each of my recurring subscription payments are due and those are on my bill spreadsheet. You have to know where your money is going to go before you spend it. This helps prevent overspending.
Third - I'm honest about where the money is going. Yes, I know I said that before, but it is important. Be honest with yourself and be honest with your partner. Granted, I'm doing this alone. But I have a great accountability partner who talks me off the ledge from buying too much yarn. Or asks how I'm going to pay for another expensive toy *coughLitterRobotcough* *coughKirbycough* Do I really need it? Yes, to both, by the way. Best investments I ever made. She also celebrates the wins with me. And listens/reads when I complain about the setbacks.
Fourth, I figure out where the money has to come from in order to pay off my debt. I knit and crochet and I sell my creations. I also am selling off parts of my Mom's Longaberger collection (she's downsizing and I get to keep the money), a friend's Precious Moment's collection (the money goes to her), my Precious Moment's collection and stuff around the house I no longer want or need. Every dollar (that I get to keep) goes towards my debt. $1 here, $2 there, $10 there. It all adds up and I've been able to make additional payments on debts because of it.
So that's my system. And I have a prize in mind. Reward system, if you will. Once all my debt is paid off, minus the mortgage because that's another step, I'm buying myself a new car. I've wanted one for the past couple years, but couldn't see how I could afford it with all this debt to pay off. So, my reward is a shiny new Subaru.
That's all for tonight. Talk to you later!
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