For the past few years, I’ve been playing the denial game with my debt. I’ve been shoving it under the rug and pretending it doesn’t exist. I’ve been paying off my credit cards, then maxing them out. I’ve been ignoring my large medical bill that’s now in the scary hands of a collection agency. I’ve been defaulting on my school loans, putting them in forbearance, and trying not to think too hard that I have a five-figure debt I need to take care of.
I’ve mentioned before that I didn’t grow up in a home that valued money. It feels harsh to say that, but it’s honestly the truth. My dad gambled his paychecks away. My mom tried to support a family of four on a preschool teacher’s salary. I knew about things like bill collectors and evictions long before I should have known about them. I know what it’s like to stress about money, to wonder if your parents can afford groceries or rent or electricity. It’s a scary world and because of that, I was never taught how to use money effectively.
But I’m also 26 years old. I’m an adult and I can’t blame my parents for my money habits anymore. I have to own up to the fact that I never placed a priority on learning proper money management tactics, and that I’m in debt – major debt – and I have to change my money habits now. I have to take action now.
At the end of December, I read the book The Total Money Makeover by Dave Ramsey. I should start off by saying I don’t really like Dave Ramsey. There’s something about him that rubs me the wrong way, possibly because he seems to place being rich over anything else. I’m honestly not looking to become rich. Or a millionaire. Or even living completely debt-free. When thinking about my ideal money life, the key feeling I have is comfort. I want to be comfortable with my money. I want to handle it in a wise, controlled way. I want to be able to pay my bills, save money, and have a decent-sized disposable income to use on entertainment, travel, and shopping. And, of course, I want to be mostly debt-free.
(I say mostly, because I am perfectly fine with having a car loan for the time being. I am planning to trade my car in next year for a newer model + better car payment, so I know I’ll have a loan for a while.)
I’ll be honest: I didn’t learn a ton from Dave Ramsey’s book. I found his tone brash and condescending, and it was hard to relate to many of the personal stories that were scattered throughout the book. All that said, there were some key thoughts roaming through my head while I read the book.
First, I need to reevaluate my money habits and change the way I view money.
I don’t spend my money wisely. I make a budget and I don’t stick to it. I eat out way too often and spend money on way too many unnecessary things. I’m living paycheck to paycheck, even though there’s no reason why that should be the case. I have to completely change the way I think about money. I have to build a better budget and get super strict with my spending habits.
Second, I need to begin working towards an emergency savings account ASAP.
I’m not sure if you know how scary it is to have absolutely no savings. Because it’s terrifying. I have no safety net to fall back on if something happens in my life. If I need a car repair. Or I get sick or injured and have to visit the ER. Or, say, I shatter my iPhone screen and need a phone replacement. My ultimate goal is a $10,000 emergency savings fund, since Dave Ramsey cautions to have a fund that will pay for three to six months of expenses, erring on the side of six months if you’re single. For me, that would equal $10,000. I figure it will take me a long time to get to a five-figure emergency savings fund, since I won’t be working towards it as ferociously as my debts, but it’s an ultimate goal that I’ll be putting a lot of effort into.
And thirdly, I need to get serious about paying off my debts.
Like I mentioned at the beginning of this post, I have been in denial that I’m in debt. Probably because I’ve been in “normal” debt. Credit cards! Medical bills! School loans! This idea of “normal debt” is such a fallacy that we let ourselves believe in, because it’s just the way most Americans live. It doesn’t have to be this way and I don’t want it to be this way for me anymore. I want to get super serious and super focused on my debt. I want to put together a payment plan to get me out of debt and into a (mostly) debt-free lifestyle. It’s possible. It will just take commitment, dedication, and giving up some things for a few years. Like traveling. Monthly pedicures. Shopping. And even possibly delaying moving out on my own.
But this post is long enough as it is. I’ll be back on Wednesday to talk more about the nitty-gritty details of my debt and my goals to paying it off.
Okay, this post was filled with not fun money talk. How about something fun to ponder in the comments? Let’s say you won the lottery. Paying off debts and saving aside, what is the first frivolous thing you’d buy? For me, I think I’d buy a brand-new queen-sized bed. Right now, I have a full-sized bed on a frame from IKEA, but it’s not very sturdy and I covet my mom’s glorious queen-sized bed.