Early this year, I decided I wanted to pay of my debt, an idea motivated by none other than moneyvangelist Dave Ramsey. Although I am not particularly fond of the man, I have to admit his debt payoff plan inspired some changes in the way I deal with finances. Technically speaking, you are supposed to start with your smallest debt and work your way up, but I really wanted to pay my car off first because it’s my biggest monthly bill. Or was, I should say, because as of today, my car is officially paid off, 18 months early! That’s $311 a month I can put toward something else. It wasn’t easy; I basically dedicated myself to finding extra jobs, working weekends and limiting my social life and I put every dollar possible toward my car. But it feels good to know that I managed to pay off over $7,000 in just over four months through good old-fashioned hard work.
I still have substantial debt, but I’ve decided that I’m OK with a certain level of debt…I don’t need to be 100% debt free to be at peace. It would be great, but I just don’t want to work weekends and cut all (non-free) leisure from my life for the next three to four years. Travel, vacations and new experiences are important to me, and these things tend to cost money. I’d just rather experience the joy travel brings me than whatever joy being 100% debt free would bring me. So I have reassessed my goals and settled on the following:
1.) Pay off my private student loans (Sallie Mae) by mid 2016.
2.) Don’t worry much about my Federal loans. Interest on these are low enough that I don’t feel like I’m being ripped off every month.
3.) Get my credit cards under 20% by the end of this year. I’m pretty close to this number, so this should be fairly easy.
4.) Avoid reckless spending in the form of mediocre meals, impulse purchases and things I don’t really need, etc. I don’t think I’m willing to give up ordering coffee a couple of times a month, but I do think there’s something to be said for well-considered purchases. If I’m going to go out for lunch or dinner, I want it to be a good, memorable meal…I don’t want to spend $20/$25 on a blah meal. Basically, I want to decrease wasteful spending as much as possible and be more mindful about where my money goes.
5.) Start seriously considering what I’d want to be doing with my life if money weren’t an issue. If I didn’t have bills to pay every month, what would my ideal life and career look like?