I’ve always had this mentally that debt was normal. It was something everybody had and even the government was doing it. Why couldn’t I?
All I had to do was just keep making more money. As long as I had enough to pay my bills, I thought I should be fine. This mindset was always there and always held me back but not realizing it until later. Working at the bank did not help and only made it worse. To be a good sales person, I believed you have to believe in what you sell or people will not buy from you. It was easy to get a credit card, use a line of credit to pay off the credit card. Pay off the line of credit with a loan. Then finally consolidate the loans into an even bigger loan.
I liked manual cars and also liked them fast. I ended up trading cars in because it was too slow. My s2000 had a hole in the convertible top so I got a 370z. These moves cost thousands. My reason for it was, I’d rather have the car that I want instead of getting stuck with what I don’t truly want. The problem with that mentally is, it always changes. We always want something better.
Those actions helped create those loans that buried me even deeper. My epiphany came when I reached my life’s goal of making 100k a year. To me, when I created that goal, the amount should be enough. My mom, who was a nurse, was able to raise 3 boys and made less. Even though I made what I thought should be enough, I felt like I had nothing. I reached a goal, which I was not sure I could reach, since I am only a high school graduate.
To my realization, debt was eating me inside. It is very depressing when you feel that you should have money but you are completely buried in debt. I had to make a change. Enough was enough. It is time to be mature with my financial decisions. No more doing what feels good short term and feeling like crap long term.
The first thing that had to go was the sports car. To my defense, I was able to cover the monthly cost of the car from minecraft server donations but that came to an end. That gave me some breathing room but took a little bit of time to fully accept my decision.
I still felt like I was missing information to help me with my new way of thinking. I no longer wanted to be part of the rat race and wanted to debt free. I hunted for information and found youtube videos of Dave Ramsey and his baby steps. He is very extreme in his views but it helped me. Before, I have told others not to use their debit card because it was more secure to use credit card. In some ways it is true but visa is visa and for me there is a difference in my mindset when I buy using my credit card and when I buy using my debit. I tend to spend less with debit.
No more using credit cards. When I buy something, I know exactly how much I have left. It took a few months to get off credit. I had to pay my balances in full, which I always did anyways every month. But this time, no more borrowing. I would only use what I had.
I followed Dave Ramsey’s steps. One thousand was not enough for me to save. I wanted at least 1 month’s expenses. I tried paying off things with higher interest rates before but could not follow through. Now with the new approach of paying off the smallest to give you a boost in morale, is working for me. Our smallest thing to pay off was the phone. Even though it was 0% but it gave us motivation. Next we would pay off our dental credit card, furniture and for the first time in my life, a car.
I had to create a spreadsheet with all my transactions, categorized and dated so I can see where all our money is going and how much if we saved at the end of the month. We now have a little nest egg, still needing to pay off another car then we can focus home, retirement and so forth. We have chosen to use our current money to vacation to the Philippines even know we know it will set us back instead of using it to pay off some of the car. Our trip to the Philippines means more to us.
