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. :)

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