The buck stopped here in December...

Last December, the reality of my precarious financial situation started to hit home, and I decided to get really serious about debt reduction. Dave Ramsey's book Your Total Money Makeover was probably the biggest motivator, even though I'd heard some of the concepts before in my start and stop attempts to get my money under control. I had already been living on a budget for three years, and I'd learned a little bit about how to create a fund for "periodic expenses" so that my cash flow was smoother. The big thing I needed to tackle was my consumer spending...debt.

I didn't develop a good relationship with money as a kid. My dad had plenty of it and was miserly, which has definitely relaxed as he's gotten older, and my mom went back and forth from plenty to paucity and spent a lot either way, and she's facing the fate of the grasshopper now. I am having to learn as I go and while it's hard right now, I'm just about 18 months from financial freedom and I will finally be able to hang up the baggage I carry about being "finanically irresponsible", which is what both my dad and my first husband consider to be the biggest character flaw a person can have.

I am tired of not being able to afford the things I need NOW because I'm paying off what I wanted months ago, plus interest. I decided to grow up and stop waiting for money to fall out of the sky and solve the problem myself. For the first 6 months of this year, we lived like paupers. I've since relaxed a little, because I know I've ingrained better decision making habits, and I'm not in danger of going off into compulsive consumer spending again. We still have a very strict budget, but I did up the amount of money I allot for "slush"...fun stuff like a movie once a month and candy at the ball field, etc., because while getting out of debt is really important to me and for my family, I also only get one shot at enjoying my kids' childhood with them, too.

I cut up all my credit cards on New Year's Day. I am paying off my debt using the snowball method, but I'm not following the Dave approach of working on the smallest debts first anymore...I did knock out a few small ones early on that way, but now I'm working on the highest interest debt first. I joined the No Credit Needed Network this month...check out this site if you want some inspiration and accountability!

I got my 7 and 8 year old sons on board by showing them our budget on the computer and explaining that if we made good choices for the next 2 years, we would go to Disney for Christmas in 2008. This has proven to be an effective incentive for them. Often when they start "wanting", I remind them that the choices we make today affect Disney in December, and that's all it takes to stop the whining and begging. They understand that there's only so much money to go around and that my job is to be sure that the big things are taken care of before the fun stuff can be considered. That's a heck of a lot more than I knew at 23!

My immediate goal is to get out of consumer debt. I'm just under $23K from that goal. I have a short term goal of selling my current house and being able to use some equity from the sale of my home to pay off a chunk of the debt. Once I've accomplished those two goals, the next steps are to begin putting my children's child support into savings for college and to build an emergency fund of 3-6 months income.

The hardest part of this journey is that it's so long! It's hard to maintain the focus day after day, and having like-minded travelers down this road really helps.