Friday, January 6, 2012

#11, 12 & 15: Let's Talk About Debt, Baby

Let's talk about debt, baby, let's talk about you and me...

Well, really about me. If you've been following along, you may have noticed that I have a whole section for finances on my Day Zero Project List and that a lot of it has to do with either spending less money or paying off more debt.

Money is something I've always had trouble with. I didn't really understand credit cards when I first got one, the day I left for college. I had no idea the kind of trouble I could get into, and eventually did get into. Now, I have even less excuses because I know exactly the kind of trouble I can get into, and yet I ended up using credit cards when I went back to school in fall 2008, mostly for day-to-day living expenses such as food and gas, but that adds up. Sure, I was working my butt off as a server at night, but that's not exactly steady pay, no health insurance and I still had to come up with rent money every month. So I ended school with some school loan debt, some credit card debt and a burning desire to pay it off so that I can use my money for better things. I also wanted a savings account that would be harder for me to get into and might actually have a chance to accumulate because it would be hard for me to touch it even for emergencies.

I thought that making my financial goals part of my Day Zero project might help me to do this.

11. Admit to my Mom how much credit card debt I have and ask if I can transfer it to her 0% interest card to pay it off
12. Pay off all credit card debt
15. Open an ING account and put $15 in it every paycheck

I felt that doing number 11 might help me with number 12. I really didn't want to do number 11. Not just because no one likes to hear their Mother scold them, especially for lessons we should have already learned, but because my parents already helped me out... the first time I got into credit card debt when I first went to college and racked up debt on things like ordering out for pizza, going to movies, and a bunch of other non-essentials. Obviously I'd learned my lesson and my new debt was from actual necessary expenditures, but I still didn't think it would be a pleasant conversation. Plus, I have my pride. I wanted to pay off my debt all by my grown-up self.

Of course, being grown-up doesn't always save me from being dumb. The credit cards I had racked up my new debt on were the same old credit cards that I had made late payments to and ended up with ridiculously high APRs and interest rates. So admitting my debt to my Mom and asking if I could transfer it to one of her cards that she never uses but occasionally offers 0% interest on transferred balances would be incredibly beneficial to me, since all of my cards have an interest rate of over 20%. Yikes! I may be dumb, but I'm not that dumb. I finally admitted to my mom how much in debt I still am and humbly asked for the use of her credit card. Which she generously granted.

I'm lucky that I have such a nice Mom, and I'm well aware of that. A lot of people don't have nice Moms like me. Of course, I have an awesome Dad too, but I didn't really talk about this with him because his name isn't on the credit card and I didn't really want two lectures. I'm sure I'll get it next time I see him though since he's the only one in my immediate family who reads my blog. Oops.

So now I've been working on #12. Pay off all credit card debt for awhile, but now I feel like I really might have a fighting chance to pay it off by the time my 1001 days are up for the Day Zero Project. And that makes me happy. I also feel like I've taken a big step towards being really grown up in asking for help when I needed it and not letting my pride or irritation at at well-deserved scolding in the way. (Well deserved because if I'd been smart I would've closed out all my old accounts and gotten new credit cards with low APRs.)

#15. Open an ING account was the easiest of my financial maneuvers. I got an offer in the mail for $75 deposited if I opened a savings account, and I said, Perfect! So I opened my savings account and set it up to automatically take out $15 every other Friday, on the days that I get my paycheck. Out of sight, out of mind, and I'm feeling pretty responsible! I want to eventually increase the amount heading towards that savings account, but that needs to wait until I've paid off my credit card debt.

I really feel like completing my Day Zero goals has helped me on that road though, and I can't wait till I can cross #12 off my list!

1 comment:

  1. Yay for paying off debt! That's been one of my big goals lately. Unfortunately I don't have a nice mom, so it's all up to me!

    Hubby barely knew what a savings account was before he met me, but since my mother had preached about them endlessly throughout my 20s, the second we joined accounts I put almost all of our wedding money in savings and add several hundred per month. Where hubby can't touch it, since he STILL doesn't know how to access the account.

    Good luck with your payments! The sooner you pay those things off, the sooner you can spend your money on something better. :)