I made my last car payment on the minivan today.......early, I will add, so I saved on interest as well.
I had some unexpected money come my way and decided to do something responsible with it. I toyed with the idea of throwing it in the bank, but I know that I would dip into it, as it was money that I had not planned on.
I had some unexpected money come my way and decided to do something responsible with it. I toyed with the idea of throwing it in the bank, but I know that I would dip into it, as it was money that I had not planned on.
So, as soon as it was deposited into my checking account, I sent out a rather large payment and felt pretty giddy about it, even though it would have been divine to take a much needed, decadent vacation in a luxury hotel somewhere beautiful.
Instead, I am the official owner of the mama-pimp-van aka grocery getter....in all its minivan glory!
Now I am tackling the official "get out of debt plan" that I have attempted to do for the past 10 years!
I have a 3 year plan mapped out where I will double up on Chris's car payment now that I do not have one and the 4 years that he has left on his loan, will be paid off in 2 (or less) and when that loan is gone I will totally wipe out our obnoxious credit card debt.
We were a little bit irresponsible with credit cards and I am ready to be totally done with them! I really, truly want to be debt free, live simply and save money to pay cash for things......I have been doing this (as I am digging out of debt) and it does make you think about whether the purchase is impulsively unnecessary or completely legit.
I do have my moments of weakness (I am a girl that loves to shop) when I come across something cute, but I am not using our credit cards.
I find it to be fun and almost like a game to cut corners and save money on our utilities and monthly expenses.
- I recently realized that I was using a quarter of the amount of minutes that we pay for on my cell phone service. I decided to switch to prepaid and paid $100.00 for 1000 minutes where before I was paying $50.00 a month and using less than 80 minutes a month....I will be saving $500.00 over the next year and not have to worry about a bill!
- We switched from cable to satellite, have tons more channels and options (still have dvr and HD) and we are saving about $100 a month.
- I also cancelled my land line, it was comcast digital voice and it was horrible. Calls would drop and we wouldn't have service but when comcast came to service the problem, they kept telling us that there was no problem, yet we had no phone service......so that saves us another $45.oo each month.
- I paid the car insurance in full for this year and received a discount because of it.
So, if I come across as being cheap, I am simply living frugal as I am implementing my 3 year plan.....I just imagine how lovely it must be to be debt free.....
6 comments:
Good for you...after our Disney trip, we need to work towards this too. Have you read any "how to" books or did you just decide on a good way?
This could get long!
Dave Ramsey has a good and easy program to follow.....you can Google him and get alot of info.
Dave’s message is quite simple: avoid debt at all costs. His entire message revolves around escaping debt in all forms, including credit card debt, auto loans, and even home loans. If you can’t afford to buy it, you shouldn’t be buying it.
In order to provide a framework for getting started down this path, Dave offers a series of seven baby steps to follow:
1. Start a “beginner” emergency fund of $1,000
2. Start and complete a “debt snowball,” except for a house mortgage
3. Create a fully funded emergency fund equal to six months of salary
4. Invest 15% of your gross income in 401(k)s (up to the match), Roth IRAs, and then in mutual funds
5. Fund some portion of your child’s college education
6. Pay off the home mortgage
7. Build wealth by investing a significant amount of your income once you have no debt at all
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I am currently working on the "debt snowball"...
1. Make a list of all of the debts you have, with the debt with the lowest balance at the top of the list.
2. Allocate as much of your monthly budget as you can to debt elimination.
3. Make minimum payments on all of the debts except for the one at the top of the list, pay the absolute maximum amount you can on that debt until it’s gone.
**I am doing a modified version of this.
Good luck!!
Thanks...I think that's the guy my parents and sister have read. We have never been in any debt (except a mortgage) until recently. We've let it kind of get out of hand and before it gets way out of hand, I want to get a control on it.
Way to go Reanna!
Having a plan helps. As you know, just a taste of financial freedom is huge motivation.
Claire and I used John Commuta's plan which is similar to what you describe including the "snowball" effect.
Alan
Thanks Mr. Moody....I will look into John Commuta...one can never have too much info, right?!
Once I go back to work, we're going to actively tackle our "debt snowball", too. It really feels good to fight the debt!
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