Money Makeover: The Starting Line

That picture, my friends, is my credit card. And it has just been cut up! And it’s the only credit card I have! I said that one of my goals for this year is to manage my money better and start getting out of debt. And that’s exactly what I’m doing. I’ve found a lot of motivation from my good friend Carl, who recommended a book by Dave Ramsey called Total Money Makeover. I ordered the book right after he shared his story using credit card points, yes those measly points I’ve accrued for spending thousands of dollars.

I’m only 60 pages into Ramsey’s book, but it’s seriously inspirational!! His approach so far is really no nonsense. Look at yourself in the mirror and reevaluate where you stand. And be honest. I know I spend money that I don’t have. Shopping has become a way of me dealing with depression, stress, anxiety, etc. And there are much better ways. I can see how this plan alone can make me happy just to see that I’M DOING IT!! In fact, it felt GREAT just to cut up that credit card!

I was nervous about Ramsey’s book because I know he’s a preacher. I’m agnostic on a good day, so I didn’t know how I’d feel about it, but seriously, this book can be read by anyone. He doesn’t preach at all in this book. It’s written really well and broken up into sections and is written with a language that isn’t intimidating at all.

So I thought I’d track my progress with this journey here on the blog. I’m going to bare all! I won’t tell you my salary, but I will share what my debt is, how it’s going down and how my savings are going up. It lets me hold myself accountable a bit more if it’s all laid out there. So here are the starting numbers:

Checking account: $531.71

Saving account: $25.80 (that number is seriously embarrassing to write)

401K: $13,289.76

Credit Card Debt: $7,154.34

Student Loans: $13,318.94

See where the problem lies here? What I have and what I owe are REALLY far away from each other….well, aside from my 401K, but that money isn’t touchable for right now. So it’s time to turn things around and I’m making an oath to myself that these numbers will only get better from here. This is the worst case scenario.

I haven’t even gotten to the part in Ramsey’s book yet where you actually start the plan, but I knew right off the bat that I had to cut up my credit card and make some changes on how I spend my money. Changes I can think of right off the bat are making my own coffee at home (which I can do now since I have an espresso maker and coffee grinder!) instead of buying it every day, stop joy riding which I love to do when I’m bored, read the books on my shelves instead of buying new ones, and start bringing my lunch to work. These are all VERY doable things that are just going to require some discipline.

Anyone else trying to get in a better situation in 2012 financially? If so, think about joining me by picking up Ramsey’s book and posting your own goals!! It would be fun to make progress together!! If you decide to do this too, leave me a comment so I know to check your blog often πŸ™‚ See you again in a month for an update! And I promise an ACTUAL book review soon!

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19 Responses

  1. We have definitely been there before! Especially after moving cross-country a few times. I’m happy to say that as of a few years ago, the only debts we have now are Jason’s school loans (which are somewhere over 30 grand, eek! but that’s what you get for out of state tuition, boo) and our mortgage. No credit card debts, no car loans. It’s really nice. But yeah…once that student loan is paid off, I’ll be super happy!

  2. Oh, Chris! Why didn’t you tell me you were going to do this, we could’ve compared notes and plans, since I have some of the same hopes of boosting up my savings. We could buddy team this problem! *g* My goal is to build an emergency fund that’s two months of all our monthly expenses combined so if the unthinkable happens we’ll both have time to find new work (and my final goal is six months). This is all separate from a savings account which is not as bad as yours, but bad enough given the economy right now. We can do it! \o/

  3. WOW–just seeing that pic of your cut up credit card is pretty damn inspiring!!! I love that you’ve come up with some real concrete actions you can take immediately! You should keep track of how much those changes save you each day–I bet by the end of the month you’ll be astonished! πŸ˜€

    I think that once we get moved, we really need to sit down and seriously rethink our finances as well. It’s so scary thinking about having three kids to put through college, etc. So I usually try not to think about it, which of course is totally stupid and irresponsible. 😦

  4. Good luck Mr. Chris! Like Amanda said, we went through doing this not too long ago, so if you need any advice, I’ll be happy to help out if I can – believe me, no matter how hard money is for you, I guarantee I am immeasurably stupider πŸ™‚

  5. Don’t be embarassed! Your savings is three times as big as mine- because as soon as I stock some money in there, I have to empty it out for an unforseen emergency like the ac dying in the middle of summer, or my fridge going kaput when it’s full of food. I’ve got a ton of student debt, too, and we live four of us on one income. I keep thinking how much easier my life would be if I didn’t have to pay half the monthly income to debt- really have been trying to whittle that away.

  6. It sounds like you’re off to a great start so far, and only a few days into the year! I wish you the best of luck. With this attitude, I’m confident you’ll make wonderful progress in 2012.

  7. Another good book about getting control of hour debt is Not Buying It by Judith… something. I can’t remember her last name. But it’s a memoir about this couple who vow not to buy anything they don’t NEED (aposed to WANT).

  8. Amanda, Thanks for the encouragement!! It’s always nice to hear about someone who has been through it and been out the other side ok…you should check out his book!! It’ll help you with your other financial goals too!!

    Renay, I didn’t KNOW I was doing this until just a couple of nights ago :p But I’m SUPER excited now!! The first step in this is setting aside $1000 for an emergency fund. You build it up more later but they want you to start with that..so that’ll be my first step!

    Debi, And the great thing is I’m actually EXCITED about this πŸ˜€ I do much better with budgets than the way I’ve been spending my money. Once y’all move I HIGHLY recommend this book!! It’s very common sense, but it’s really awesome!

    Jase, As I told Amanda, it’s great to hear a success story!!! Y’all should totally try the book out for future goals like the kids πŸ™‚

    Jeane, I’m SO there with you!! And I don’t even have a mortgage or kids yet. I sound like I’m drinking the kool aid, but seriously! You should really try this book. It’s really simple, and common sense, but I can see how it’ll help a LOT.

    Memory, Cutting up that card was a great start, lol. I really do hope I make some good progress πŸ™‚ Thanks!

    Colin, Hey! Thanks for the book rec…sounds like one I could definitely benefit from!!

  9. Good for you Chris! This is awesome! I don’t have awful debt, but I do have some. I’d like to get rid of it by the time I am 30. That sounds doable!! I am right there with you with trying to save money (my savings account looks similar after Christmas!) I am trying to always bring my lunch, though I do still plan on eating breakfast out, because I leave to early to eat at home. I’m going to try and not buy anymore books until I read the 56 I posted on my blog. And I shouldn’t just buy stuff because I have a job!

  10. I also listen to this podcast sometimes called You Need a Budget. The program is supposed to be awesome.

  11. Hey Chris,

    I completely understand where you are coming from and I am joining you, though I will not post my progress as it is a somewhat Dutch custom (as well as the influence of coming from a Catholic environment) not to talk about the precise state of my money affairs. However, I will tell you that I have a large student loan (think 3-4 times your amount), currently no job, and no social security. I am making stringent changes right now. Cutting up my credit card isn’t one of them, as over here credit cards aren’t as generally accepted to pay and I only use it for amazon etc to buy gifts for friends (but I may need to cut it out). However, I am applying the other “simple” changes you listed. Honestly, I went grocery shopping today, and I usually buy lots of veggies, and a few sweets and I did not telling myself I need to prepare what I have at home now. I did succeed in buying only what I needed, but I did return from the shop mildly hyperventilating. I use shopping (even something as simply as buying two more pieces of fruit than I NEED) to deal with depression too. Blah.

    I hope you will succeed and I will continue to read your progress as I am sure it helps me. Sorry for the personal information overload, I just related so much to your post.

  12. Go Chris! πŸ˜€ I’m so proud of you for deciding to make a change & blogging about it. I don’t have an income (booo), but the only debt I have is student loans, which I’m allowed to defer since I’m too sick to work. If I end up being declared disabled by the government, the loans would disappear, which would be nice. But it’d be even nicer if I got my health back & could start working & pay them back! πŸ™‚

  13. (Also, I should point out the only reason I have no income but also no non-student debt is because of my parents. Thank God for them.)

  14. that picture is super inspiring! i use mint.com a lot and i’d highly recommend it for sticking to a budget. i categorize and have a budget for everything from book spending to groceries so i can HOLD myself to plans. i even planned ahead and saved for christmas this year so that i wasn’t dead broke by the end of it!

    however, this year, i too am severely needing to boost my savings. along with packing my lunch and not using my credit card much, I’ve started *only* taking out $100 for the whole month for spending on anything that i don’t really need. much like iris, i’m too nervous to post about that kind of stuff on my blog, but i’ll post here! πŸ˜€

  15. I can hardly begin to tell you how thrilled I am for you. But begin I will and will probably blather on for a long time.

    I am 43 and for 40 years of my life I was really bad about any form of self-discipline. I ran up thousands of dollars of credit card debt, often without Mary knowing I was doing so and certainly not for anything that was of any benefit to her. I had two good friends doing the Dave Ramsey plan and I often teased them, in a good-natured way, because they were so passionate about it. Then I went to see the man speak (thanks to the generosity of one of those friends) and went and immediately read his book afterwards. What FINALLY made the difference to me was seeing just how common sense this was, coupled with the kind of lifestyle Dave was advocating: one in which you don’t borrow money, you save money, you budget to give yourself “blow money”, and you practice generosity.

    When I realized that it was doable, and that it would also give me some much needed discipline I dived in.

    The short story is 2.5 years later we just paid off the last of our $34K of debt.

    Who knew that having a realistic and structured budget would actually lead to peace of mind and freedom from financial fear. And all the while we were able to still do nice things for ourselves, take care of needs as they arose, and were able to be generous in giving to the organizations and individuals that we care about.

    I’m so proud of you Chris and so thrilled for you. Though it doesn’t seem that way now, it won’t be that long before you’ll be debt free, and long before that time comes you’ll be much happier with your financial life.

  16. I know you can do anything you put your mind to it! now maybe you will also listen to little things like “no more xmas presents!”.. when I say it! give me a call a talk to me is a great gift! however… since you are thinking of buying a home I might not have cut up that credit card, but instead given it to mom to “take care of”… home expenses don’t wait for you to have a savings account!… anyway.. I do KNOW you will go above and beyond in this endeavor because that’s just what you are… and it’s one of the reasons this Mama loves you!!!

  17. You can do this Chris!! Just keep thinking of that house to motivate you.

  18. Lu, It is DEFINITELY doable for you to get rid of your debt by 30!!! You should totally try this plan! It’s fantastic!! Love your book idea too πŸ™‚ I hope you can stick to it!!! I think everyone should be debt free…we all deserve it, lol. Thanks for the podcast suggestion too!!!

    Iris, Hey my dear!! Don’t you dare apologize for being “personal” πŸ™‚ I was hoping this would be a post where we all could be open!! I feel you on the debt stress 😦 Know that you’re not alone, Iris. It was really hard for me to actually post my numbers here, lol. But I figured I had to to hold myself accountable. I know myself and that’s the only way I’d stick to it. But I definitely think that its not really normal to post those numbers, lol. So don’t feel bad about that either! I wish you all the luck in the world, Iris and you can always email me (chrisa511(at)gmail.com) if you need someone to talk about debt problems!!

    Eva, Thanks!! You STILL haven’t gotten approved for disability? That’s so sad 😦 I see so many people come into the hospital that really should NOT have disability and then there are people with legitimate issues like you that can’t get it 😦 I hope it comes soon! But like you, I’d like even more for you to be able to work!! Because I know how bad you want to. Glad the debt is low on your end though πŸ˜€

    Selena, Ooooh, thanks!! I didnt even know about mint.com!!! Great to know about! I plan on taking out $100 a month too for spending money…that’ll be for drinking, movies, books, etc…everything else is budgeted into it’s own envelopes! And I hope we can all continue to talk here about our progress πŸ˜€

    Carl, Oh Carl I CANNOT thank you enough!!!! This has been the most inspiring thing I’ve done in a long time. And lord knows you are SUCH an inspiration to me!! I still can’t get over how much debt y’all got paid off in that little bit of time!! You should be so proud of yourself Carl! I’m really liking the doable-ness of this project too! And I can see how it’ll actually make life so much more comfortable in the end! Can’t wait to post my NEXT update πŸ˜€

    Mama, Hey mama πŸ˜€ I’m really going to try hard this year to do this and yes, part of that will be cutting back on Christmas πŸ™‚ So expect your phone call!!! I should call you soon anyway!! We haven’t talked in awhile! I’m hoping to really not need to use credit cards for my new house, but if I have to take out a line of credit, I’ll get it paid with this plan!

    Jill, Hey you! Ooooh, guess what?? I made those morning glory muffins you posted about and they are SO good!!!! And yes, that house will be a huge motivator!

  19. Best wishes dear Chris. I keep having this discussion with Scott about how we are spending WAY too much money every month on the non-necessary. We both have student loans (and car loans, and a motorcycle note, and a mortgage, and…) but my ONE money goal this year is to pay off Scott’s school loan. I really want baby #2 next year but daycare alone is enough to make me want to throw up. But no way we can live on one income with our current lifestyle. Booooooo!

    Anyway, you can do it. Pay YOURSELF first. Just think about that beautiful house…and then worry about the books to fill it. πŸ˜‰

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