I never would have imagined that I would be able to go for a full year without using a credit card. This month marks the first year complete since I enrolled in a debt management plan. I have a way to go until I'm totally debt-free, but with budgeting and fiscal responsibility, I've now paid down 18% of my debt over the last twelve months.
Since September 2011, each month I've been paying just under half of my monthly salary to a debt management company (I'm more than happy to share the name of the company if anyone needs a recommendation). They reduced all of my interest rates significantly. The plan stipulates that I cannot apply for new credit cards or loans, and all but one of my previous credit cards were cancelled (the remaining one helps maintain my credit history). It means that I'm forced to spend only within my means. I won't deny that it's been a hardship as I have had very limited funds for hobbies and a social life. As a single guy, that's been an especially hard pill to swallow - and I am working out plans to increase my discretionary spending. Additionally, my budget was stretched thin during the summer when I didn't have the benefit of a "free" meal plan where I work. It forced me to cook - I mean actually cook, which is something I've avoided in the past as much as possible. Now that the academic year is underway again, I am incredibly thankful to have that meal plan again. I've also benefited in having a reliable car since January. I am consistently grateful for my gas- and money-saving Prius.
This fall semester I'll be taking a three-credit undergraduate course (free as a university employee) in accounting, which I imagine will help me understand and utilize better financial practices. If I enjoy that course, I'll likely continue in the graduate level certificate program in accounting - for a personal benefit and potentially a career benefit as well.
It makes me feel good whenever I look at a chart of my net worth on my financial software. To tangibly see that worth go up, up, up causes me to feel that my "personal" worth improves, too. In just over three years and probably sooner, I will not owe any money to credit card companies. When that day arrives and that final payment goes through, it will likely rank among the happiest moments in my life so far.
I mean, I'm not one to say I told you so, but I literally (not figuratively) told you so!! :)
ReplyDeleteI am very proud of you for (taking my advice) taking steps to get in better financial standing! Good job!
Thanks, Amanda! Your advice and recommendation to call and find out about this debt management plan has meant a heck of a lot to me. I went from feeling miserable to feeling empowered about finances. I'm indebted to you! But thankfully not in terms of money. :)
DeleteIt's now April, so I assume you're really that close to the finish line. Hehe! Having a financial software is good if you really want to control your budget. Anyhow, you should share with us how it is to be debt-free. If I were in your situation, everyone will feel my excitement too! :)
ReplyDeleteHi Allan, thanks for your comments! I certainly have a ways to go - the end of 2015, actually. But slow and steady wins the race, as they say. The important thing to me seems to be having a plan and sticking with it. I recently did turn things around to a positive net worth. And yes - I will be very vocal about my excitement when this credit card debt is completely gone! Thanks again!
DeleteIt's great to know that you're doing good with managing your finances. Yes, it's important to not rush things. It's better to reach the finish line slowly but surely than getting there quickly yet in an on-and-off manner. Good luck to you! Two more years and you'll be debt-free! :D
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