The Writer Bee

Big moves in my Debt Free Journey this week! First off, I had already made hefty payments towards some of my credit cards with my bonus money which was paid out earlier this month, but today I got my mother-of-a-tax-refund deposited. Wahoo!

Now before any of you start to lecture me, I am well aware that getting a large tax refund is not a good goal. That I’m essentially providing the IRS with an interest-free loan. Yada, yada, yada. This year kind of caught me off-guard and I thought I had selected enough Federal exemptions to avoid a large refund, but apparently not. I have since corrected my exemptions and this should not be an issue next year.

Moving on.

Once these payments I’ve made clear, I’ll have wiped out 64% of my credit card debt in just 4 weeks! Of course the last 36% will take me another year, but so be it. Maybe it’ll take less if my budget continues to work and I can avoid getting smacked with some major expense this year…

Speaking of, let me just share for a moment how tough a “true” budget is! I must admit that, although I’ve sometimes thought I was on a budget before, I never have been. Not really. This budget that I’m on now is a REAL budget and it is taking some getting used to.

Thankfully, I listened to the “Cash Flow Planning” session of Dave Ramsey’s Financial Peace University. In it, Dave warns that your first time on a budget, the budget won’t work. “Stick with it,” he says. He goes on to say that you really need to give it 3 months before you’ll start to see it work. I can believe that. The last 3 weeks on this thing have been really crazy in terms of figuring out exactly how much I really do need to budget for items like food. But more than that, I’m learning that the key to this budget-thing is planning ahead. I had to sit down last week and think through all the weird, random stuff I have to pay for during the course of the year and plan out how much I need to budget monthly so that I’m not blindsided by this stuff (which is what has typically had me scrambling for my plastic in the past).

A good example for me is car servicing. It’s easy enough to budget gas - I have a pretty good handle on how much I spend on fuel, but when it comes to thinking of how many oil changes I need and what other possible service-related items may come up, I never previously thought about those. Now my car service “envelope” is getting $50/month for this item. That may seem like a lot, but, oil changes aside, I’m figuring on probably needing new tires this year. My car will also be needing its 50,000 mile service check-up sometime this summer. So, if I don’t put aside that $50/month now, I’ll be freaking out when I suddenly have to shell out a couple hundred bucks for tires or something else car-related that I didn’t offically plan for.

Point being that I’m quickly learning how important every single cent becomes when creating a full zero-balance budget…especially when you’re single and have cut up all of your cards! Probably the best thing about having done that is it’s forcing me to get creative in my spending. Nothing like going cold turkey!