Monday, January 16, 2012

Goal #2 – Get out of debt

Right now I am carrying a lot of debt.  Part of the reason I’m still in debt is the relative instability of 2011.  Four jobs in one year with various periods of unemployment, mixed with the fact that I have yet to establish an emergency fund meant that I was unable to reduce my debts.  On a brighter note, they didn’t increase much, only by about 250$ total.

I don’t know why it freaks me out so much to put the total amount here, maybe because I talk to no one about my financials, not even my boyfriend, but here goes.  As of today, I owe 9562$ total between credit cards and a loan (it was just over 10 000$ at Christmas). 

Wow, it looks like a lot when I put it out there, which is the main reason I am doing this.  I want to make myself more accountable.

My goal is a two parter.  The first is to be debt free for 2013, with a medium term goal of being credit card debt free for July.  I picked July because that is when my BF and I are going to be moving in to a bigger apartment, and I’d like to have squeaky clean credit cards by then.  Even though we already live together, it feels more like a real beginning in July since it will be ‘our’ place, with room for everyone, and not my single gal apartment that we all just cram ourselves into.

I know that my situation does not seem major compared to most bloggers in the personal finance genre, but the main difference (at least from what I have seen) is that I have no formal education past high school, and therefore make significantly less  than a lot of PF bloggers.  I make about 32000$ per year, and this is relatively recent.  A year and a half ago I was making 23000$.  Last year I didn’t make much at all since I was unemployed for a big chunk.

Also, up until a few months ago, I had not lived with another person in about a decade, so I was making a very basic salary as well as paying all expenses by myself.  No matter how frugal you are, you get to a point that you can’t scrimp anymore.  I also grew up in a household on welfare, with no knowledge of credit etc., so I have been learning most stuff as I go.

The best thing about growing up poor is that your notion of what is essential is very different than a lot of people.  I never had a washer or dryer at home, never had a dishwasher or air conditioning, never had cable on a regular basis, and anything extra I wanted I had to figure out a way to pay for it myself.
So this year is the year I do it, so far since Christmas I have put 500$ towards my debt, and plan to keep throwing everything I can at it.

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