Setting goals for myself is nothing new, but holding myself accountable for them is. To that point, I’ve been working hard to pay off 100% of my student loans from my BFA and the credit card debt that I racked up while unemployed last year. I feel like talking about debt is so taboo in our culture. I find that taboo inhibiting to my success of becoming a debt free individual and wife. I need to hold myself accountable. Making the process public on this blog is how I will do it. If I fail, I’ll feel like such a doody head. I’ll expect all my followers to talk shit about me too.
For the month of September, I will only spend money on my basic needs. The rest of my money will go to my credit card bills. My ultimate goal is to pay off $40,000 (student loans and credit card combined), but for September, I want to pay off $1,400.
I found out about the “Spending Fast” a year ago while anxiously googling “how to get out of debt”. I stumbled upon Anna Newell Jones’s website And Then We Saved, and I was inspired by her story. I was excited/terrified to give it a try, but I couldn’t. At the time, I was in the beginning stages of planning a wedding, and I was being pimped out by a temp agency that gave me 60% of what they charged my firm, so there was no wiggle room for saving. Now my wedding is over, I have a big girl job, and I’m ready to blow through my debt and start saving that money and investing in myself.
Meet the bad guys who got me through some trying times and are now biting my ass. Ignore Macy’s. She got into the mix when I bought a dress for my honeymoon. None of them are currently living in my wallet.
Guide To A Spending Fast
And Then We Saved as a 15 step How-to guide that outlines the spending fast. Below are the steps and my responses.
1. List Your Debts and Their Interest Rates
I use a mint.com account for a single location to keep track of my bazillion different accounts. Rather than anxiously fiddling around with a spreadsheet (which I do monthly anyway for personal budget and forecasting), mint.com let me set a goal and then plug in the different interest rates for each credit card. As Anna advises on her website, I’ve tackled the highest interest rate card first. I used a balance transfer from another card with a very low rate. That’s a tricky thing to do though, so more on that decision later.
2. Ask Your Creditors For a Lower Interest Rate
This I have not done.
3. Picture The Life You Dream of Living.
The money I spend on my debt keeps me from investing in my future. I would rather be putting money into my emergency fund, house fund, vacation fund, and retirement fund. My dream life would be to never work again, write novels, live in a cabin in the woods, and never get mistaken for Ted Kaczynski.
4. Make The Commitment To Be Done With Debt Once And For All
Yep. On board with that one. But I will admit that I am not giving up the credit cards. Eventually my husband and I want to buy a house, and I want to have a stellar credit score to get a low interest rate mortgage. Once this is over, I’ll be using my credit card responsibly on everyday purchases, paying the balance every month, and racking up points and cash back.
5. If You’re Partnered, Try To Get Them To Do The Spending Fast With You
My husband is a student, so he’s exempt. He’ll just have to deal with me not being able to go out on the weekends during the September Spending fast. Starting in October, I’ll free up some of my budget on a Spending Diet, though.
6. Set A Time-Frame For Your Spending Fast.
And Then We Saved recommends a year-long fast. I will be fasting in September, then transitioning to a diet for the remainder of the year. Depending on any changes in my income, I will re-evaluate my options for 2015.
7. Make A Public Declaration Of Your Desire To Be Debt Free
Here it is.
8. Create A “Wants and Needs” List
My needs are rent (utilities are included), cell phone, gym membership, Charlie Card, Netflix account, monthly transfer to my savings account, and groceries.
My wants are clothes, makeup, shoes, restaurants, etc.
9. Spend Money on the “Needs” side of the list only
In Mint, I have a budget set for groceries, but I consistently soar over that amount every month. When I was unemployed in New York, I had Food Stamps. Every month I’d get money loaded onto the card, and when it was gone, it was gone. Rather than relying on using my debit card or cash for groceries and risking going over, I have an American Express Reloadable Pre-paid Card which I will use in the same way as I did my EBT Card. My budget is $200.
10. Think About What You Can Buy Rather Than What You Can’t.
I love food. I hate shopping for food, but I will now embrace it. I will share my budget cooking and lunch packing on my Wednesday Food posts.
11. Become Immersed In A Community of Like Minded People.
Working on it.
12. Attack Your Debts
My immediate goal is to tackle the evil credit cards with their double-digit interest rates. Next, I’ll move onto the subsidized student loans. As And Then We Saved recommends, I’ve targeted the highest interest rate card first. I’ve started out by using balance transfers with promotional 0% APR’s from other accounts to pay off the bulk of the balance, but whatever surplus I have from the end of September will go to obliterating the balance completely.
13 and 14. Be Committed To The Process And Continue With The Spending Fast Until You Reach Your End Date
15. Be Proud Of Yourself For What You Accomplish Big Or Small
I am currently using 43% of all the credit that I have available to me. When I reach 30%, 20%, 10%, and 0%, I will buy myself a bottle of Andre to bust open in the street. $3,114.12 stands between me and that 30% goal, so it will most likely be New Years Eve when I do that.