I'm FREE!!!!

This morning is the morning I’ve been waiting for, working for, dreaming of for the last year and a half.

No - there’s no new job, ring, house, niece, nephew or cat.

But I WAS greeted with this lovely sight after making my internet rounds this morning:


That’s right! After 6-months of unemployment and over a year and a half of carrying a nasty balance on my two very high interest rate credit cards - I’M OFFICIALLY DEBT FREE!!! (Or at least bad debt free as I’ll be working to pay off “the big one” for years to come.)

I’m the kind of person who likes to work on a project, and see immediate results. I have a check list on my stickies that controls my life - I live to be able to check things off that list - to see immediate action and immediate results.

Of course, attempting to pay off thousands of dollars in credit card debt is not an instant gratification deal. At first I got frustrated - almost gave up - because even though I was brown bagging it to lunch and learning to enjoy window shopping, my credit card bill ate up my $100 payments like a little kid clearing broccoli from his dinner plate - there was SOMETHING gone, but no one could tell quite what.

But almost exactly a year later I have paid off every last penny. I feel a weight lifted from my shoulders - and it’s not just from the monetary freedom. I almost feel as if by paying off the last of my debts, I have finally put the stressful time of unemployment, my car accident, and the huge transition of moving solo to a brand new city behind me. I have paid my debt in full, and there is nothing left to haunt me from that stressful and trying time. I can start anew.

Now I have tons of plans for the future. Like HAVING A SAVINGS and finally tithing the full 10%. But none of my plans involve spending any extra money, or picking up those nasty credit cards again. In fact - I pretty much plan to stick to the same plan I’ve been on for this past year - just with a little extra cash to put towards much worthier investments. Here’s just a a few of my suggestions:

Budget for your expenses - and enjoyment - then sick to it!
I’ve heard time and time again from friends who will only budget for what they NEED (rent, food, utilities, gas) but feel guilty building in room in their budget for enjoyment. But just because you’re broke, doesn’t mean you shouldn’t enjoy life! In fact, you’re more likely to spend MORE money on “fun things” if you don’t budget for it. I have a budget for all the necessities, but I also built in a budget for entertainment, eating out, and my Disneyland pass. This way, I knew when it was okay to relax and enjoy myself - and when the budget ran tight, I stopped.

Pay Cash for EVERYTHING -or-
Use your credit card like a debit card - but be careful!
This is something that I’m split on, because I’ve done it both ways. For a while, I was using my credit card like a debit card - spending only the cash that I had in my checking account, and nothing more. It helped me earn up useful points (see more on that below) but it also got me into trouble. When I wasn’t scared about emptying my account, I didn’t analyze my purchases, and sometimes ran WAY over what I should have spent. It was also hard to track how much money I was putting towards my credit card debt - because I was transferring “regular expenses” to the credit card every pay check as well.

I eventually went back over to the old fashioned debit card / cash option, and now I pay for EVERYTHING out of my checking account. I switched over my automated payments to my debit card (with google reminders set to tell me when it’ll be taken out) and watch my mint.com account like a hawk to ensure I don’t stumble into overdraft. In fact, it’s worked pretty handy because I’m SO scared of going over, that I never even come close - helping me reign in my spending even more.

Put a little into savings, and the rest on to debt management
My savings is minuscule, but every month without fail I made sure something got deposited into my savings account to keep me afloat. However, once I fed my savings account, and made sure that the rest of my expenses would be covered - I dumped the rest onto my credit card. I realize this was a risky play, but as long as I knew that there was some money in savings to cover an emergency, and enough cash to cover me my money was doing little good just sitting in a checking account. Yes, it was nerve racking to see my checking balance low more often than not - but the comfort of seeing my credit card dip lower was better. In fact, if it wasn’t for a couple of major cash payments I made on my card in the last couple of months, I’d probably still be fighting the debt monster.

Use your points to pay finance fees
Obviously, one of the worst parts of credit card debt is the finance fees, they can eat you alive. However, even with the thousands of dollars of credit card debt, my total finance fees came under $100. How did I do this? Points, my friend. Since I was lucky enough to have a credit card with an amazing points system, I was able to cash in the thousands of points (from thousands of dollars) into cash - or rather statement credits that almost completely wiped out my finance fees.

Knowing I’ve finally conquered my credit card debt, and only for $100 worse, I feel like I can do anything! Well - anything that is, except for shopping. I think I’ll hold off on that for just a bit more.