cutting up credit cards

Are you in debt? Are you struggling to pay the minimum on your credit cards every month? Are you struggling to make it paycheck to paycheck?

You are not alone. I admit I am one of those people who fits in all of the above categories.

But I’ve developed a personal challenge to change that. (Note: I am not a debt or financial counselor or advisor.)

Debt Free is Key to Simple Living

At the beginning of October, after some research and personal reflection I have begun my own personal journey to a life of Simple Living. I have come to realize that for me a major key to Simple Living is to be debt free.

Presently, I am nowhere near being debt free (Our Fall From Grace: American Over Consumer.) But I’ve made some much needed mental habit changes about myself and the way I view and spend money. I’ve have started reading Dave Ramsey’s book The Total Money Makeover: A Proven Plan for Financial Fitness and am slowly working on his first step, building an emergency fund of $1,000.

Yo-Yo Debting

I consider myself a yo-yo debtor. I pay off a substantial amount of debt monthly but then out of fear, as my bank account gets low I turn to those same credit cards I just paid down to get me through the month.

But this month I experienced a complete shock to my system – physical, mental and financial. When my last paycheck arrived at the first of October I put a significant amount of money towards paying down one of my credit cards. Then as the month wore on and my paycheck slowly disappeared and my bank account got smaller and smaller, I panicked. And in my panic I began using the credit card which I had just contributed to earlier in the month. I figured I had given myself a buffer and that I would only use a small amount to see me through until next payday.

I had no intention of using the entire buffer, just to help cover this and that to tide me over until my next paycheck. But I was shocked two days ago when I checked the statement on that credit card and to my horror realized I had not only consumed the entire buffer but then some.

After that awful realization I grabbed a pair of scissors and cut up every credit card I had in my possession. I left only my debit card and have since decided I will no longer carry my debit card with me anymore. For me, it is so easy to swipe that piece of plastic and completely underestimate how much I’ve really spent.

Paycheck to Paycheck

As of yet, I am not quite living paycheck to paycheck. But I am getting dangerously close. And the reality of it, combined with my staggering debt balance is beginning to cause me serious anxiety.

90 Day Financial Challenge

As a way to help myself get out of debt any way I can I have decided to create a small challenge to decrease my debt.

For the next 90 days I’m going to commit to the following:

  • Create a monthly budget: I have never made a budget before so this will be completely new.
  • Record every penny spent.
  • Ask myself, is this a “want” or a “need”?
  • Require a 30 day wait period: In the past if I wanted it I bought it, even on credit. If I still want said item in 30 days it will be proof it is a highly valuable want and I will created a savings plan to get it.
  • Only purchase necessities: (which from my paycheck is daycare, food, transportation costs, medications and doctor co-pays.) What is not a necessity is (clothes, books, music, movies and office supplies.) *I know, office supplies sounds a little ridiculous but I love buying new pens, notebooks, folders and filing systems.
  • No more shopping when bored: this applies to in person and online as well.
  • Keep a tally of how many days I can go without stepping foot inside a store: (i.e. grocery stores)
  • Go one week without spending any money on fast food.
  • Sell all my over indulged possessions: at a garage sale and in the classifieds of the newspapers: then put the money from those sales towards paying down my debt.

I’m going to print out these challenge statements, get them laminated and then carry them with me in my wallet.

My overall goal with this challenge is to break some bad spending habits and at the same time make a game out of it. I will document my progress monthly.

What is one of your bad money habits. Share it in the comments below.

9 comments on “3 Months to Better Financial Health”

  1. The desire to live a simpler life, to be debt-free, and to be more self-sufficient is my goal, as well, for the past decade. A few years ago I never thought it would be possible to be debt-free today, but I am. I took some radical changes.

    I like your website banner… about instinctual living… it’s intriguing and makes me want to know more!

    Best wishes!

    • Susan, thanks for your comment. It certainly is nice to know their are others out their pursuing a lift of simple living and freedom from debt.
      I bet you did have to make some “radical changes”. I’m making them slowly and I hope to show others that it is possible.
      Thanks for your interest in my banne ane “instinctual living” I have been hard at work on it. I’m working on giving “instinctual living” a definition – one close to Simple Living but more defined. It’s in the works 🙂

    • Thanks for the vote of approval, Melly!
      I am with you – there are no accidents! Things are provided for us at times when we need them – be them people, programs or blogs.
      I hope you find inspiration in my posts 🙂

  2. Congratulations on those goals–very attainable! I don’t have any bad spending habits any more, but it wasn’t by choice. I was forced into it. My husband and I are both self-employed (have been for many, many years), so neither of us gets a paycheck. We’d pay for what our businesses needed and then “play” with the rest. Even though we had cash, I’d still charge things on my credit card, etc. etc. etc.–I think you know what I mean! Then 5 years ago the bottom fell out of the economy. My income plummeted 45% (I make & sell handcrafted jewelry in a little retail shop in a historic downtown), and my cost of goods shot up as the gold and silver markets skyrocketed. My husband’s income dropped more slowly (he has a lawn service) but as his customers started to feel the pinch, they pared down their expenses and decided to mow their own lawns, so his income ended up about 40% down after a year or so. Plus gasoline, which he obviously relies on, shot up in price, too. We had just bought a new house, and were instantly upside-down in the mortgage. Credit card debt, a mortgage we could no longer afford, income barely more than half what it used to be–things got real tight real fast. Now a trip to McDonald’s with my son is a big deal treat, and any “wants” I have get saved for–a tiny bit at a time!–until I have the cash in hand. And you know what…it’s okay! Sorry to spill out my “life story in a nutshell”, but I want to encourage you that you can do it, and it’s NOT as hard as you think, especially since it’s YOUR choice and not because of your circumstances. Good luck!

    • Thank you for sharing your story! It inspires me to keep going, knowing that there are others who have been or are where I am.
      I know exactly what you went through prior to making this a choice…5 years ago I was nearly laid off from my job, the housing market tanked and we were unable to sell our house. (Which may have been a blessing in disguise.) We were just getting ready to close on a half a million dollar home – which we had to back out of. But I think it was all for the best 🙂

  3. Pingback: Preparing for My 30 Day Push Challenge | Canyon HowlsCanyon Howls
    • Thanks for the comment Christopher. Being even close to living paycheck to paycheck in an absolutely scary position to be in. I hope, like myself, you are working on solutions to get yourself out of that situation.

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