Financial Peace University

Tonight we did it. We cut up our credit cards. Ouch. It was only two but that didn’t make it any easier. I couldn’t look at anyone as my husband and I started snipping away. I was worried that they would see that I was struggling with the numerous “But what if?” statements I still had running through my mind as we cut them up. It’s done now though and I don’t want to look back.

The legacy I pass down to my children in terms of fiscal responsibility will not be one of debt and living paycheck to paycheck, the one we’ve been living until now. I will never own another credit card in my lifetime. Period.

With our student loans, mortgage, and those two credit cards we have a staggering amount of debt. I think we have about 1/3 of what the entire class total is. It will be many, many years before I can happily shout “We are debt free!”. It’s almost too daunting a task to even think about. Thank God with the Debt Snowball plan of paying off debt we’ll have a couple of small victories in the next few months to keep us motivated to keep going. It’s going to be hard and I’ll need it.

The Debt Snowball plan requires you list all your debts smallest to largest. Making minimum payments on all the rest you attack the smallest one first with as much money as you can throw at it. Once debt #1 is paid off you dedicate it’s minimum monthly payment to debt #2 and start hitting it until it’s paid off. Each time you pay off a debt the amount of money you have to dedicate to the next one continues to grow.

We also made a deposit into our Emergency Fund (Baby Step 1) and started using Dave’s envelope system for several of our monthly expenses; Food, Restaurants, Entertainment, Transportation, Clothing and Blow Money. I have to say that it has been an enlightening experience for us. Paying with cash really is harder. It’s harder to hand it over and watch it disappear. I almost want to hoard it. I like the idea of those green filled, bulging envelopes. We are being much more careful about our purchasing choices. This system really forces you too.

It’s been a roller coaster week. I’m drained.  I’m glad next week we’ll be taking on a tamer topic, credit reports and collection practices. It should be interesting. I’m hoping to arm myself with some tools for taking those incoming phone calls that I’ve been avoiding.