Friday, January 23, 2009

Slick Plastic Bondage

It feels great. Actually, it feels amazing. I have to take one more peek, just to make sure it’s real. It is. And I’m thrilled. I’m so proud of myself.

The neat column of zeros stare back at me like blank eyes off my Microsoft Excel spread sheet. I click back to my online banking page and note with satisfaction that the final payments are set up already to execute my final burden of credit debt in the next 14 days. Then the one row glaring out red numbers of credit card bondage that mar a page of otherwise satisfied debtors, will be reduced to impotent, tidy black zero eyes too.

Sweet.

I started 2008 off with seven credit cards; each with a hefty balance on them. A couple cards were completely maxed out. Unchecked spending during marriage, a drastic cut in income after separation and the tumultuous times following a divorce can do that to you.

Today, I paid off my sixth credit card. In two more weeks, I will have paid off all my cards. Given the unpredictable flux in my income over the past year, unexpected expenses, the inevitable holidays, birthdays and special occasions, and the temptation to supplant my actual ‘needs’ with more than the occasional ‘wants’, that’s a bit of a feat.

But then, I started my radical financial changes even before the media and stock markets indicated a needed shift in America’s spending habits. I didn’t have much say in the way the financial end of my co-household was ran pre-singledom, but it’s exclusively my decision now. I’m downright aggressive when I want something. And I want to be debt free, a.s.a.p. Sometimes just throwing money at the problem really IS the answer.

Credit cards are a magical thing. They appear to instantly give you hundreds, sometimes thousands of dollars worth of buying power you didn’t have to previously earn.
But that tricky interest rate and the deceptive minimum payments will do a serious hocus-pocus on your future income and lifestyle if you allow your account statements do a disappearing act after receiving them every month.

That’s why I set up bill-pay through my bank that offers on-line banking. No more trying to keep up on current postage. No more bouncing checks or wondering why money miraculously vanished from my account (after forgetting about writing a check). And no more hoping my account balance will be the same as the last time I called or received a statement when I’m planning a grocery shop or a big purchase.

I put all my accounts under a “favorites” category called Bills and created log in accounts with each of them. It was surprisingly easy. It's great to be able to check my bank account from a computer with Internet access anywhere in the country, even if I'm no where near my bank and don't have access to a phone to call them.

I also set up an Excel spreadsheet for keeping track of my credit card balances, and budgeting estimates for all my monthly expenditures (including gasoline, bills, grocery shops, entertainment, etc.) One row shows the average for the year, the one next to it shows how much I owe that month. That way I can see what my overall cost of living is at the end of a year (or season), but I also can compare my income that month to the cost of living for that month.

I created an interactive page set up to automatically adjust for the amount of money I make per month so I can decide which category of “extras” to pay towards when all the bills are covered. For about the last year, I’ve tackled my credit cards with the highest interest rates first, then going after the ones with the lowest balances, until I’ve whittled them down to nada.

I used to avoid the realities of money when I was married and (Mistakenly. Stupidly. Regrettably.) allowed my ex full rein in all money making decisions. But I find now that checking my slowly diminishing credit card balances, adjusting my budget, and queuing up future payments is not only fun, it’s highly addictive.

Seriously.

At the risk of sounding like a complete nerd, I sometimes check my bank account online and my household budget two or three times a day. My ex, who couldn’t get me near the computer to look at (then) mostly meaningless figures, and my best friend who knows numbers and I have had a tumultuous relationship all my life- would probably be stunned.

It turns out though, that I’m addicted to progress and change. And the progress towards a more financially stable me, and the change in how I view money as a possibility for greatness and not just a means to an end or a source of serious vexation- is nothing short of miraculous. Listen to me. I start talking money and suddenly three syllable words just roll off my tongue. Or fingers.

Plus, I've caught numerous errors that the credit card companies have made; corrected online stores that have over-charged me accidentally and noticed before getting the snail mail indication that my interest rate changed or they had new account policies.

Going from “ruefully naïve” to “functionally efficient” has taken about a year. A year of developing massive amounts of self-empowerment that I wouldn’t trade for all plastic in a Tupperware factory.

Anyway, after I hear the glorious words ‘Your balance is zero. There is no payment due at this time,” spoken by the ever efficient sounding automated woman’s voice from seven different customer service financial lenders- (I’m going to call them all just for the sake of fully enjoying a year’s effort reduced to repetitive instant gratification) I plan to celebrate. That woman, whoever she is, has no inkling that her pre-recorded words are for the first time, music to my ears.

A couple ridiculously old student loans from my early college days will take me another month or two to slash to smithereens, but then aside from my house mortgage, I will be 100% debt free.

Oh. Well. That is, after I pay the public library $32.78 in overdue library fees.

What a wonderful reality THAT will be.
Yay for me!

It’s been a long road with more than a few tough obstacles (like my stubbornness) to overcome. Learning to curb certain tendencies (like buying sale items I love in every available color), modifying my budget through the lean times and keeping my resolve during times of a little more excess.

But I’ve been getting excellent advice from incredibly smart and successful people and surrounding myself with moral bolstering literature that promise great things if I but ignore the consumer urge and dig deep for the clever and wealthy person I know I am truly becoming.

I subscribed to Smart Money magazine and Entrepreneur in 2007. I also started reading books about financial freedom, getting out of debt and staying out, and building wealth. The book titles read like a “Who’s who” list of some of the best financial advice books on the market.

“Rich Dad, Poor Dad” – Robert T. Klyosaki
“The Richest Man in Babylon” – George S. Clason
“The Laws of Money”- Suz Orman
“The Automatic Millionaire”- David Bach
“The Power of Less” – Leo Babauta


I have a list of other great books on money to check out, and I’ll share insights about them as I read them. It’s been pretty exciting though, to see my debt melt away. I’m sure I could have done this faster with just a little more self-control, but I recognize that I’m human with a few minor materialistic needs.

Like dropping $260 at Ambercromi & Fitch, $145 at Baker Shoes, and $198 at Barnes and Noble.

Okay. So maybe those *aren’t* in fact needs; but those adorable hoodies, dazzling stilettos and glossy paged books sure wanted to come home with me badly! At least I was excellent about staying away from my guilty pleasure stores most of the time, and being sensible about eating out only when I was making an event of it with people I care about.

And let’s be honest. Any plan ~for anything~ that doesn’t allow a person to enjoy life to some degree AND feel like their efforts are paying off, is never going to work.

Besides, I’ve had a wonderful year of good times and superb memories all while successfully hacking away at years of bad habits manifested in slick plastic bondage. (My credit cards of course!)

So- Watch closely, for after that amazing spectacle of sheer self-restraint, my next trick will be…

1 comment:

Marcus Haight said...

I HATE being in debt. I think a car payment and a residence payment can generally be considered given bills (even assuming that residence payment is a mortgage). So if you paid off your car or house, more power to you, but otherwise I don't consider those 'debt' in the normal sense. Credit cards however, are not just debt, they are DEBT. And I HATE having debt. I'm very happy for you that you've overcome such a difficult obstacle (I've been there - big time!). As far as going from 'financially naive' to 'self-sufficient' - again, kudos! You give very good advice to others who may wish to duplicate your efforts. You're the best!