January 30, 2009

My New Austere Life

Moving to Albany has been great for many reasons- the history, the people, the nature. Pretty much everything has been positive in one way or another. Except for my credit rating. The move here was much more expensive than anticipated and I was unemployed for two months. Top that with an apartment that was too expensive for my salary and you find yourself with a recipe for a high credit balance. Though my financial situation is better I still belong to the "I want it now" generation. So out would come the credit card. I'm not proud of it. I'm sick of it and it's embarrassing. Yeah, the solution is to just not use it but I simply couldn't get myself to.

One day a few weeks ago I was goofing off on the Internet, as I am wont to do, when I stumbled upon a financial blog. One post was called snowballing debt or something like that. I was intrigued. It sounded dirty but it's not. Snowballing debt basically means you pay off your debts smallest to highest. It goes like this: list your various debts lowest balance to highest balance. You throw as much money as you can to the lowest balance, paying the minimum on the other cards until you pay off the lowest balance. You then move on to the next card and so on and so on. Then, stop using credit cards. Don't carry one, don't use one. The point is once you pay off a card you feel like you've finally accomplished something instead of treading the waters of credit card debt. And you finally start to feel like you're getting back in control.

I only used one of my two cards as it was but the balance was/is incredibly intimidating and very daunting. But in order to get it to shrink instead of grow I must pay off more than I use. And that means not using it at all. I cancelled my automatic payments on it and moved the payments to other cards. Now, neither card is being used and I plan to use my tax refund to pay off the smaller balance card that isn't being used anyway.

As soon as I removed my credit card from my wallet I felt like I was finally free. Like I was finally in charge of my money. Sheesh- I felt like I instantaneously lost five pounds. Mike thinks I need to carry the card for emergencies. I think I'll be okay. I'll carry the card when I'm travelling because that just makes sense. But that doesn't mean I'll be using it. It just means I'll have a safety net. I'll be so used to not using it that I won't reach for it when I don't need to.

I really like being able to see where all my money goes and that I will soon see tangible results to eliminating my debt. It will take years for my debt to finally shrink to something more manageable. But I finally feel like the albatross has been removed from my neck. I'm so excited.

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