So, as I’ve made clear in the past, I’ve decided to take on my debt full-tilt using ideas from Dave Ramsey’s books and various financial blogs I read.
My budgeting earlier this year was skewed by irregular income for a couple of months, courtesy of leaving teaching, having unemployed time, then starting a new gig.
I’ve been chipping down at one debt in particular these past few months — it’s a credit card where one charge went just over the credit limit, blooming in fees and extra charges beyond what I could pay during my paycheck-to-paycheck living while teaching.
I made out like a bandit on my tax return this year, both on the federal and the two states I filed for. Other friends seem to have made a lot more, but I’ll take my $1200 and run, given that I owed last year.
That $1200 will get me current on that credit card — the first, often-unmentioned step of Dave Ramsey’s plan — and the remainder, along with my economic stimulus check of $600, will get me very close to the starter $1000 emergency fund. I went ahead and created myself an account and snowball plan at What’s the Cost. Luckily, my two highest interest debts (don’t even ask) are my smallest — the two credit cards. After that, my next biggest is a loan from my parents, but that’s zero interest. I think I’ll still go ahead and knock that out before I tackle my student loans, especially since there’s a real person on the other end of that debt.
Paidtwice wrote just this morning about how debt sucks because every windfall is already spoken for. I don’t resent using $1800 to pay down my debt, and I don’t even feel bad about not stimulating the economy with my $600 check. I find it satisfying, like she does. If I were free as a lark from debt and with a good emergency fund, I honestly don’t know what I’d spend the money on. I’d probably invest some and use the rest to plan a trip to Texas to visit T-dawg, my parents, and the sister (who’s growing up way too damn fast!). I’ve always lived paycheck-to-paycheck and fighting with debt, so that kind of windfall, with no real strings attached, is foreign to me. At tax time in two years, though, let’s see where I am.
I’ve been eagerly and repeatedly checking my bank account for my refund deposits. I want to get this ball rolling. 🙂