Tuesday, December 29, 2009

I Quit My Credit Cards...And Not Looking Back

In October I knew I had gone too far into debt with my credit cards. I had the classic signs; carrying a balance, struggling to pay off the debt, and struggling to not reach for my card at every possible opportunity.

I was addicted to credit. And I had to quit it before it decided to quit me.

My plan was to keep my cards out of reach and out of sight. So I started by sealing every credit card I own in an envelope. I kept it in my purse for 1 week. ..Just in case I needed them..

After that, the envelope went into the freezer (after a failed attempt to give it to someone-who threw it in a cupboard, like that'll stop me!), where it has been ever since. I took a giant leap of faith and made the first big step in my life to financial freedom.

I would love to tell you how much the debt was, but I will just say it was about 4 months worth of not caring how much or what I put on my cards. The hardest part was figuring out how I was going to pay off the debt, while still being able to eat and put gas in my car. My game plan was to cut off all excess spending-no mall, no pedis, no extracurricular 'activities' with friends-not until this debt was paid. I gave myself until the end of December; 3 months. I would use all of my 'extra' income from my side jobs to pay for food and gas and then every other penny I earned would go towards this irresponsible debt I had accumulated

I won't lie-I was scared. I had come to rely on having the money available when I needed it. All of a sudden I had to plan on when I could spend the little money I would have to make sure I managed it correctly. It was difficult at first. The first time I went grocery shopping I start shaking when I took out $100 cash and just 'gave it away'. I went home and started crying, thinking I was poor and would never feel the comfort of cash flow ever again. Once I recovered, I realized that it wasn't that bad. I had my first success; buying groceries for under $100! Usually I didn't care if I put a few extra things in my cart, but now I had a goal to ALWAYS be under $100 when I buy groceries and since then I've succeeded every time (without going more often!).

My next challenge was that first craving to spend. Those who love their plastic know what I'm talking about; going to the mall, getting an iced coffee and buying anything that you love! It took me until the end of November for it to get really bad. I mean, really, really bad. I was afraid to go into any store by myself because I thought I would buy excessive amounts of things I didn't need. The urge was strong! And I made smart decisions to avoid spending-I started reading to take my mind off things, I would go to the gym, or just stay home and bake (it was that time of year too!). I brought a 'chaperone' to the grocery store or anywhere else I went. And he knew that I was not allowed to buy things I didn't need-he made me stick to it! Looking back, I'm proud that I was able to avoid spending all my cash on crap I didn't want or need. But I also realized that it sucks when I can't just do what I think feels so right and normal..But it was only for a few months, and then I could have a 'mall budget'.

When I was alone and very tempted, I reminded myself of my goal. I reminded myself that I won't be starved of shopping forever, just until I corrected my finances and learned to manage my money better. For someone who was never taught the essential money management skills needed, this was going to be a learning experience.

In November I started reading a book called Young, Fabulous & Broke by Suze Orman. I will tell you right now that you need to read this book. 'Nuff said.

The book helped me to stay focused on my goal, and to look beyond this goal to reach others that I had in mind. Ditching my credit cards was the first step, this book helped me to decide what, when and where the others would fall into place. ..I would go further into detail, but this is an entirely separate post.

Another trick I used to manage the money I did have for expenses was the envelope system. I labeled an envelope for each expense; groceries, gas, going out. When I put cash in, or took cash out, I wrote it down. That way once I put my budgeted amount in, I could use any extra money for the going out envelope. Once all of that money was gone, I was done spending for the month. It is a system I will use in the future-it works and it helps me visualize my money leaving my pocket and going into someone else's.

Even though my balance is paid off, I still have frozen credit cards. I don't know if I'll ever unfreeze them, but I do know that if I do, I will have rules for me to follow with them. A few that I know I'll enforce are; don't carry my card on me all the time, have limits on what I can use the card for (no mall trips) and make sure that I can pay for everything I put on my plastic.

It seems like October was forever ago, but now when I check my account balances online, I smile because I know that a few months ago, I was dreading the numbers I saw, and now I can't wait to see my numbers grow in a [positive] way.

I rewarded myself for reaching my goal by spending ONLY money given to me for Christmas at the mall. I found I had a hard time spending all of it. :)

Wednesday, December 23, 2009

Back and Ready to Write

Ok-6 months is a long time to take an unexpected hiatus from my blog. I would say I have excuses, like being too busy, getting distracted, or having something better to do..But honestly, I think I just decided one week I didn't want to write anything and left it at that.

So what happened all summer and fall while I was away?? I went to Chicago, I did 4 months of personal training and now I'm rockin' healthy (I mean...hot?), I discovered I love being a part of planning weddings, I changed my viewpoint on credit cards, saving vs. spending and got my money on track, I started two more very part-time jobs, I hosted Thanksgiving at my house and most recently, I have been sick on and off all fall. When I wasn't sick, I was exhausted. ...Needless to say I've been busy!

So here we are the day before Christmas Eve and I'm at work. And it's slow; slow = boring. But at the end of the day I get to go for my monthly massage, go to the gym, buy groceries for Christmas and wait while inches of snow falls from the sky while I'm cozied up in my house!

I think since this is more of a 'Hey, welcome back' post I'm going to celebrate it with a 'what I've learned' for the Year's End. If you don't care to listen to how wise I've become this year, then you can leave now. Thanks for stopping by! :)

First, reflecting on an entire year is a total chore! Think back to last January, do you know anything you learned last January? I'm sure you learned something, but do you remember that it was in January? Did you use it at all throughout the year? Probably not, so most of this will probably occur this summer or fall.. But I'll do my best!

So this year I went to Savannah with my Mom. We had so much fun! Throughout the rest of the year I had a lot of personal bonding moments with her, this mostly stemmed from the difficult year she had; her husband had 3 surgeries, one including a massive heart attack. But at Thanksgiving I realized that even though my Mom may not be perfect and send me gift packages and have great fashion style, she's still my Mom and we are so much alike. For the first time in my life, I'm happy that my mom and I are close and have so many of the same personality traits and qualities about us. I can't wait for the next Mother Daughter Trip!

At the beginning of this year I was very organized-One of the things I did was start tracking my student loans. Every quarter I calculated out how much principal vs. interest I paid and I figured out how long it will take me to pay off my loans. The $52,000 debt I started with at the beginning of the year is now under $48,500. Because of the increases in payments I made, and a little help from finaid.org, I will have all of my students loans paid off in about 6.5 years. That will be a total of 8 years to pay off a massive amount of debt that I HATE having to pay each month. For those of you who have less than this in debt to pay-consider yourselves lucky and pay as much as you can each month!

Speaking of Money, right around the time I ditched my blog I also started to carry a balance on my credit card...I KNOW!! It's awful! By October I had decided to take away all of my credit cards. After a failed attempt to have my boyfriend hide them from me (he put them in the cupboard...right in front of me), I decided to freeze them. Now, I can proudly say that after 3 months of being dead broke, and only having 2 withdrawal breakdowns, I have my debt paid off. I also have a wonderfully growing savings account for my new car because of my new sense of financial responsibility. As far as ever getting rights to those cards back....maabye when I travel, and they go right back in the freezer!

One of my biggest accomplishments for me this year is repairing and building my relationship with my sister. We don't get along because I disagree with so many decisions she made in the last 5 years. Because of that, and her great ability to be so stubborn, we were not even conversing for about 10 months-We didn't decide not to talk to each other, it was just we both knew it wouldn't end well if we did... But in July I discovered she had set a wedding date, to take place in Oregon, and I had a sudden fear that she might not want me there...Luckily, my fear was just paranoia, but it also showed me that my actions would have been responsible for it, had that happened. So conversing commenced and now we hold happy conversations, after her attempting to plan her wedding on her own, she took my offer of help to be her wedding planner and VOILA! Not only am I invited to the wedding, but without me there couldn't be a (fabulous) wedding! I sent tons of gifts and goodies to her family for Christmas and I can't wait to get out there next summer and give her a giant hug! I can be difficult when I disagree on something, but I'm glad that I will always have my sisters to put up with it! :)

I spent a third of my year with a personal trainer. The reason: my pants weren't fitting and I was seeing a small, but noticeable, tiny muffin top....uck! So instead of torturing myself by starvation, or thinking that I'm perfect the way I am, I enlisted for someone else to tell me what I need to do to keep my body healthy, happy and clean. It wasn't a complete torture fest, but I learned alot about muscle and its uncanny ability to burn calories and fat..and while I saw a large reduction in the waist over the 4 month period, I did not see much of a reduction in my hips and thighs...I was born with them and they are wonderful and it just takes the best pants to make others feel that way as well. :) Not to mention I lost 25% of what body fat I had and love how my clothes fit me, gained 6 pounds and no longer weigh myself. EVER. Exercise and Diet is the only way to lose weight (inches)and to feel great. I learned to accept the way my body chooses to be-when its slim and healthy.

So I have more jobs now..I'm babysitting for two families-this job I did for the extra money, it is still for the extra money. The other job is being a Speech Coach for a local high school Speech Team. I was in Discussion when I was in school and did very well. I miss it still and decided if I can find someone to hire me than I would do it. So far it has been a lot of fun! I mostly decided to take on these jobs, obviously for extra money, but also because I discovered there aren't alot of students that want to take private music lessons this year. I'm sure its more of a cost-saving measure, but it put a hamper on my budget so I had to accommodate to that. Side jobs are a great way to make some extra money!

This fall I also auditioned for a community band-of course, I am waay out of shape and didn't get into the band, but I did get on the sub-list....hopefully next year I can try again. I did notice that my right arm is still responding negatively to my clarinet. It's just more patience and work to be done before I'm 'healed'..

Merry Christmas Everyone!