I was gchatting with a friend (that's google chat for those of you who aren't google IMers) and she was comparing a hard decision I was making to buying a new shirt. How when you like two and can't decide, you often choose neither, or you get home and you wish you'd gotten the other one.
This is a friend who I can usually relate to on nearly every level. But when she wrote this, I couldn't imagine what she meant. Then I realized why. I didn't remember buying a new shirt and getting it home. Because I haven't. In. So. LONG! Here it is, nearly May 1, 2010 and my last purchase of a new peice of clothing for myself was in 2008!!! Now I know that I was pregnant 9 months of that time, and broke most of the rest of the time, but really? So are most of the rest of the world and they are running all over in their new shirts! 2008? Do I even still get to count as being a girl?
When I shared that with her she said, "That's why your debt snowball rolls on and mine got caught in a ditch somewhere".
Have I really become so frugal that I don't buy a new shirt for over a year? Is that even allowed?
The debt snowball is something that I learned from Dave Ramsey. You line up all your debts in order of balance, ignoring all interest rates, smallest to largest. You list out your minimum payments on each. Then you pay off the smallest debt first. Once that's gone you use that payment plus the minumum payment to pay off the next smallest, then you are paying number 3 lowest with 3 minimum payments. This allows you to free up some monthly cash for all these little things and your "snowball" builds momentum. You feel powerful by getting stuff paid off and you are more likely to stick with it. You get out of the mentality that now you have this "free" money to play with when you pay something off, you use it to pay something else off.
Somehow we got out of Lawrence's period of unemployment last year with no additional debt. Our snowball stalled, but it didn't melt. And April 30 has been the day we have been looking ahead to for about 6 months, it's the day we'll start to get back on track.
HEY! That's today.
I think it's important for us to take snapshots of where we are so we can see progress. (Maybe that's why I posted the before and after for my shred). Sometimes it's hard to see because you don't "get" anything for paying off debt. That is the whole idea. To use your money to think ahead and not back. To save for things rather than pay off things. And by the way, you do get something. Freedom. From debt.
Last year I posted that we had decreased our debt in one year by $28K. From Jan 08-Jan 09. That wasn't all cash out, that was selling of a car, and getting realistic about what we NEED vs what we WANT. I'm happy to report that in 2009 we paid off an additional 12K. Not as exciting as the year before...but hey, there was less to sell, less to get rid of, etc and that is a total of 40K in two years. WOW. It feels good to know we are still headed in the right direction a little at a time. If you know my debt story, you know that for me this all started when I read "The Total Money Makeover" and then Lawrence read it. And then we had one, a total money makeover that is. We thought that because we didn't have all kinds of credit card debt, that we didn't have debt. But when we looked at our nice cars and our nice house we thought, when did over 300K in debt become "no debt"? And we are totally normal for our generation. This is normal. Except THIS IS NOT NORMAL! This paying off debt is no fun, and it's not normal, but as Dave says,
"If you live like no one else, later you can live like no one else".
I'm pretty sure he'd want me to get a new shirt on occassion though, so this weekend, I might just have to do that! You know, since we are getting back on track and all.