Saving Up Instead of Credit

Making the minimum payments on credit cards is always the first priority of anyone with debt.  Obviously the penalities are not worth missing a payment unless is direly necessary (which I believe is rarely the case).  With paying down debt in the snowball format, I have changed my mindset to the minimum payment not being what is on the credit card statement, but rather what we have deemed minimum.

Therefore, even though the current credit card we are working on has a set minimum, we have added the amount from the last card we paid off to that minimum monthly.  This is essentially the basis of the snowball payments. 

But I think it can be tempting to look at the extra money and think of other things it could be used towards.  Right now we have a major purchase that we would rather make sooner than later.  We planned and saved for a couple of months, but now that the time is approaching when we want the item, we do not have enough money.  Putting it on a credit card is a 100% absolute no-no.  I would rather go without than use credit (which is a huge step in the right direction for me).

So since we do not want to touch that extra money added to the payments and we refuse to put the item on credit, I have decided to take all the extra money that I make (usually listed in the sidebar under "Current Month") and apply it to our savings instead of the credit cards.

Mentally, this decision was discouraging at first.  I thought that it was a failure to not put every last penny towards the credit cards.  But the reality is, life still goes on.  Even though I am going for the "gazelle-like" focus that Dave Ramsey so much harps on, there are still things that, while not a necessity, feel like a priority for my family. 

The big note here is to recognize that they are priorities and not necessities.  This distinction is very important as it turns the decision into one that is within my control.  I cannot play victim here.  I cannot gripe about the slowing down of the credit card payments during this time because I am choosing to use the extra money I make for something that matters to me. 

I am still considering this a win, because after looking at the charts my husband and I made, I feel very comfortable with the timeline that we are on.  After this major purchase, which will hopefully only take a month or two to gain, it is right back to credit.

We're making major progress and I feel like this is the right choice.

I Have Arrived

Much like many others, I grew up surrounded by the debt culture.  House payments were necessary.  Credit cards were normal.  Student loans were a must-have.

I remember in the early years of our marriage, still quite young and insanely ignorant, I looked at debt as a status symbol.  The backwards mentality the culture had drilled into me: 

"The more credit you have, the more successful you must be."

Platinum credit cards, two car payments, the biggest whooping mortgage you can pull off.  Any time we were approved for a credit limit, it made me thrilled.  I felt as though I had finally arrived.  I had credit.  Thousands and thousands of dollars of credit.  I felt rich.

The worst part is that my thinking wasn't even corrected by those around me, but encouraged and fueled.  If you could make your minimum payments on all your debt every month, then keep it rolling.  I didn't even look at all that debt as a lot.  It was normal.  In fact, it was well below normal, so in my mind, we had some work to do: build more debt!

Looking back, I cannot believe how insane it sounds.  I can't believe I ever fell for it.  I can't believe people all around me still are.

Things turned around for me one night, sitting at the computer one evening and the internet was incredibly slow.  So slow that my boredom left me perusing the bookshelf like it was the 90s.  I happened across my husband's stash of fiscally responsible books and Dave Ramsey's cover looked appealing so I started reading.

My life changed.

It wasn't overnight.  The ideas were planted and they made sense.  My eyes were open but my lifestyle remained the same.  I still felt normal.  I didn't want to feel broke.  Still in denial, it took me a couple of years of slow habit changes and occasional math problems to finally reach where I am at today. 

We are broke.  Not the can't-pay-our-monthly-bills kind of broke.  Not the we'll-lose-our-house-any-day kind of broke.  Blessing which I thank God for everyday.  But we are the we-owe-more-than-we're-worth broke. 

So I am officially living like a broke person and I have never felt more excited. 

Finally, I feel like I have arrived.

Making the Decision

We are all very familiar, and even jealous, of those stories seen in magazines, on blogs, and in many financial self-help books:

"We paid off our mortgage in only five years!"

"Bye-bye student loans in just three years!"

"We are debt-free and finally living life!"

And then the dreaded words at the end of each article:

"Anyone can do it if they choose to."

Ha! we think.  I wish.  Maybe in a dream world if everything were perfect but right now X, Y, and Z would surely stand in my way.

Well, I just don't believe that's true.  I do believe that anyone can do it and with that, I have chosen to be anyone.  This is the beginning of that journey, chock full of obstacles, to become debt-free.  After discussions of reality and hard facts with my husband, we have made the decisions and chosen the date.

We will be debt-free by Tuesday, January 10th, 2017.

That gives us three whole years to pay of everything from credit cards to student loans and even to be without a mortgage.  It sounds impossible, but we know it's not.  Will it be easy?  Definitely not. But we have chosen to make it a priority.  We have made the decision and now nothing can stop us.

As a stay-at-home mother, I want to play as big a role in this process as I can.  I have a few alternative income sources which, though small, can make a major impact.  I also love living frugally, though I have been lax lately in this department.  I used to keep a blog about frugal living called TheNorthForty which can still be viewed for resources, but this blog isn't going to solely focus on tips or tricks, but rather I will keep it as a journal for me to stay on track and keep my mind focused on the big goal ahead. 

I may share some techniques or recipes to help myself, and maybe even you, the reader, along the way.  I may also use this to own up to my problem areas as well as boast in my successes.  This is not really a blog about an entire family journey, but rather just my personal log for the ways in which I can contribute

If you are joining me on this journey, I truly hope that we can help one another along the way.  So pick your Tuesday and let's get debt-free!