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Friday, October 2, 2015

Personal Finance Inspires Me

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” – William Arthur Ward

I love this quote!  I consider myself an optimist but when it comes to finances however I am also a realist!  First let me say...I am not a Financial Blogger nor do I consider myself a financial guru.  I am just a person who is very much inspired to break my bond with credit card debt.  I am just like so many others - I have a few credit cards and if I allowed it to happen - I could be in serious trouble.  Let's face it - it is so easy to buy today and pay later...and because of that...many of us make those payments each and every month to someone else instead of having that money in our checking/savings account or emergency fund account!

I am just a normal person who is on a quest to become debt free within the next three months.  I am reminded daily that it is baby steps.  I can not expect to shell out a large sum of money (to the tune of $20K to pay off all my credit card bills) - so I have to remind myself to stay committed and focused to achieve my goal of being debt free!
(source unknown)

My goal of Financial Freedom as a goal motivates me in  my quest to become debt free so it inspires me to look at it as a daily challenge.

The first thing that I did on my road to financial freedom was create a spreadsheet that shows each credit card, due date, balance due, my monthly payment - and this is important - the current interest rate.  I update this spreadsheet each and every month and when I do - I get excited when I see the balance due going down...down...down!

I also schedule all my payments the first day of the month for each and every account (using my spreadsheet as my reference) so I do not have to worry about it during the month.  One other thing that I do is always pay more than is due.  Have you ever seen those little notes on your bills where it shows you how long it will take you to pay off your balance if you only pay the minimum?  THAT to me is SCARY -
we could be talking years to pay off if only paying the minimum amount.  Just remember - you do not have to pay an enormous amount over the minimum amount due...even if it is only $ are making progress....

There are two schools of thought on paying off your credit cards.  Dave Ramsey advises us to use the snowball other off the smallest credit card first then the next and so on and so on.  Why do this?  Well - it is exciting to pay off that credit is a thrill to know that you have accomplished that small step toward Financial Freedom and it will pump you up to keep up the good work!

Suze Orman suggests that we pay off the highest interest rate card first.  This is simple reasoning - pay off the highest interest rate card and you will save more $$.

Both Dave and Suze have very valid points on how best to off credit card debt.  I use a bit of both.

I am going to share with you my journey to financial works for me but it may not be for everyone.  As noted - I pay a set amount on each card per month...$100 per card.  This is always over the minimum due amount so I am consistently paying a bit more.  Once I then pay off one card...I take that extra $100 that I would normally have paid on the now paid off card...and apply it to another card.  This is a form of the snowball process by Dave Ramsey.  I also have a small inherited IRA that I am required to take a distribution from each year.  I took that amount and paid off another credit card.  All in all - I have now freed up $700 a month that I can use to pay off one of the high interest rate cards in October.  Again - this is what works for me but it may not work for you.  The one thing that I can say is that it is so rewarding to see those credit card balances become a big whopping ~zero~.

My goal and my dream is to be in control of my money...and not let my money control me.  To take control my money inspires me!

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