Breathe in….breathe out….


Well today we took a leap…the first baby step in the “Total Money Makeover” is to build up a $1,000 emergency fund. We did that with the 401k money that all of a sudden had to be rolled over to a new IRA (which I don’t have) or cashed out. So we cashed it out and had the money for our starter emergency fund.

The second baby step is to start paying off debt by starting with your smallest debt and moving towards your largest. So we paid off our smallest debt this month, paying it off in 2weeks instead of the 5.5months it would have taken when we were paying our normal “minimum” payments.

So….today we took a big step. For me, at least, this was a very hard one. Like I said in my previous post I signed up for my credit cards my first week of college. Since then I have always seen them as a “safety net” if you will. Even knowing I have my $1,000 emergency fund doesn’t seem to help this fear. I still liked knowing that I had my trusty (SUPER high interest rate) card sitting in my wallet at all times. So, for instance, if I was at the grocery store and needed to put something on it, I could!!! Or, if I saw something I just HAD TO HAVE for my princess, it was there. I could always pay it off when the bill came in. Now granted I did not do the frivolous spending that often. More often than not the balance on my card was being steadily raised through the roof by my gas for my car, groceries, etc that are seen as necessities. However I always felt safer putting them on my card, so that the money in the bank was there if hubby needed it for gas, etc. It makes no sense really. In the last month I have not used my card once. Surprised?? So was I!!! Yes it took a lot of self control at times, when I would stand at the Walmart register and my fingers would graze it’s glossy front. I have the #s memorized, but just as the emergency fund $$$ became so easily available when we were ready to jump in with everything, my credit card company also helped me out. My old card expired 10/2011…..so I was sent a new card around the 1st of Oct, with a new expiration date and new security code that I had not yet had the time to memorize.

Anyway, hubby and I had talked about the fact that now we had our emergency fund set up we needed to shred the cards. I knew it was a necessary step. But it took me a month to actually do it. Yes it’s stupid that I had actually grown attached to something that is literally draining $$$ out of me every month…and, if I had allowed it to, would continue to do so for the rest of my life. So, we took charge. And today, we shredded our cards. Here is a picture of me shredding the one that was most difficult for me to do so (which also, ironically, we owe the most on, AND has the highest APR). In total we shredded 3 credit cards and 3 store cards (although the store cards were paid in full). I just got a little carried away 😛 I will admit….sitting here typing this out, my stomach feels a little uneasy. Basically because I feel like what I saw as my “security net” is gone. But I know this is what was best. Here is my picture of our great accomplishment today:

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6 Comments (+add yours?)

  1. Mystie ZomBeauty Taylor
    Nov 13, 2011 @ 23:37:56

    Congrats Missy, times are hard and I am right there with you. I wish we had prepared a safety net before stuff hit the fan.

    Reply

    • stepgirl
      Nov 14, 2011 @ 07:11:38

      It’s never too late!!! We started this when we realized we could no longer keep our heads above water. It’s soooo hard at times, but we can do it, and so can you!!

      Reply

  2. Justin
    Nov 14, 2011 @ 08:06:20

    Keep up the good work! Jenn and I have been working this plan for almost a year now and we need to step up our game thanks for the encouragment!! We did not shred and close our two paid off credit cards for almost 6 months if it makes you feel better. We just had them there just like you haha.

    Reply

    • stepgirl
      Nov 14, 2011 @ 08:58:45

      Justin- that’s great!!! I am so glad I could be of an encouragement. Unfortunately our cards are not yet paid off, but to help avoid the temptation of adding to what we already owe we went ahead and shredded them. It seems like a great program and we are really excited and motivated to get debt-free!! I hope you will check in periodically and let us know how you are doing as well!!!

      Reply

      • Justin
        Nov 14, 2011 @ 10:48:56

        Thanks. Luckily we only had small balances on the two credit cards. This was only becasue we had paid them off previouly when we refied our house …… Bad idea btw. So we now have two big debts, Home equity loan and Jenns school loans plus the house! I think this has been why we have been slacking latelty it gets difficult when you do not see things getting paid off but it will be worth it in the end. Let us know if you ever need encouragment or ideas to get past a diffucult time and keep up the good work!!

      • stepgirl
        Nov 14, 2011 @ 13:08:49

        Yeah we had contemplated doing debt consolidation through DebtFreeAmerica.com, as well as doing refinancing of our house. I am SOOOO glad we didn’t do either of these!!! We would have ended up paying more in the long run with the debt consolidation plus you have a notation on your credit for around a year after you start what they call “credit counseling”. I know we can do this and save the $$$ we would pay for someone else to do it.

        Thank you so much for the offer of advice and encouragement, I am sure there will be times when we feel our “monthly snowball” payments aren’t doing anywhere near as much as we wish. I can see where this is not an overnight easy thing to do. Although I love that they recommend starting at the lowest balances so you see more immediate results. Otherwise you would be ready to give up before you really get started!!! I hope you and Jenn can get back on board and really motivated to get your debt paid down!! You can do it!!

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