We finally managed to pay off our last credit card. We haven’t been debt free since we sold our house about six years ago. Ever since then we have always had a balance on one or more of them. I wasn’t sure if paying off the credit card would really make that much of a difference to me. The minimum payment on it was so low that it didn’t really impact our monthly budget, so paying it off didn’t gain us that much additional cash flow month to month. I was doing it more for psychological reasons. I wanted to stop paying interest on trivial purchases from my past. I wanted to stop being a slave to the credit card companies, and I wanted to finally go back to owning my money.
I’ve been fortunate enough to see a pretty steady climb in my salary over the last few years, or at least that’s what it looked like on paper, but not the way it felt. Every time I made a little bit extra we used it to pay off the debt that we had accumulated over the years. I had borrowed against my future and was paying it back little by little. I didn’t realize at the time the kind of psychological drain this put on me. Whenever I spent money on anything other than necessities, I felt guilty. I knew that this money wasn’t really mine, that it belonged to my debtors and that at some point I would have to sacrifice some of these purchases in order to pay them back. All of this happened below the surface, but the tension was still real.
We’re not entirely debt free yet, we still have to pay off our car, which we plan on doing in the next month or so. But I can see the end. I can start to feel the weight lifted off my shoulders. I feel more in charge of my financial destiny and I don’t have the burden of knowing that someone else owns our money.
This is all part of my plan to overhaul our personal finances and whip them into shape over the next 10 weeks. My plan is to get all of our debt paid off, save a month’s worth of expenses in an emergency fund and start regular (if small) contributions to college savings for the kids and retirement savings for Amber and me. I’ve been living in a precarious financial situation for far too long and I’m tired of it. This is a process Amber and I have been working on for the last few years in little bursts, but it hasn’t felt real until recently.
If you’re working on your own financial fitness journey, keep at it, the rewards of being debt free and in charge of your financial destiny are great.
Below are some of the tools that we have found most useful, hopefully they can be of use to you as well.
- Dave Ramsey. His book The Total Money Makeover as well as his podcast, which is a great way to stay motivated.
- Mint gives you good tools for keep an eye on your finances. The budgeting tools aren’t awesome, but it’s great for keep an eye on transactions, balances and overall trends.
- Google Docs work great for collaborative budget spreadsheets. Here is a sample of the one we’ve been using to track our budget.