It’s amazing. I spent all of last year trying to get out of consumer debt. I was successful. But all of a sudden, I am back in credit card debt. I’m nearly $1500 in the whole. I estimate it’s probably going to take me until the end of the year to pay it off again – assuming I don’t add to the debt.
What sucks is that it took nearly two weeks for me to accumulate all of this debt. I had a couple of yearly expenses that were totally expected, but simply not planned for. Also, I have been wasting money eating out pretty much EVERY DAY. This is ridiculous. Well, I get paid in a couple of days, and I’m ready to turn over a new leaf (again!).
So, I’m going to create a budget and stick to it! My goal is to limit my spending to a certain amount per day. I realize how two weeks of spending is going to cost me nearly six months of paying back interest, which means that I need a budget and I need one now. I also have to do a better job of keeping a little bit extra in reserve. Part of the problem is that I don’t have an emergency fund. Not even a starter emergency fund that Dave Ramsey teaches. So, every time I need to spend money I don’t have, I use the credit card.
The other problem is that I’m saving too aggressively. So, I definitely need to cut back on the amount of money I’m saving. That means I need to cut back on the amount of money I’m putting in my dividend portfolio. Say it isn’t so.
I will definitely be contributing “some” money on a monthly basis but probably less than I’m contributing now. But, I need a budget.
So, here are some money lessons for my readers.
- Don’t buy a house unless you have cash reserves – part of the reason why I’m in debt is because of house expenses that occurred, which I didn’t have any cash reserves to take care of. It’s better if you have an emergency fund before you buy a house so you can handle unexpected expenses. For example, my refrigerator isn’t working. I’m going to have to either get it fixed or have it replaced. Either way, it’s going to cost me money I don’t have.
- Create a budget and stick to it. I listen to Dave Ramsey all the time, but I rarely follow his approach to the letter. I probably need to. My excuse is that his class isn’t in my area, but I also haven’t found the need to order his home study program. I definitely think what he teaches has merit. I just need to find the discipline to follow the approach. But first, I need a budget.
So, I know you’re thinking that an easy solution is for me to cut back on the amount of money I’m saving. My problem is that I have limited income and I’m trying to do A LOT with this limited income. I’m trying to pay all my bills, save for retirement, invest supposed play money (which doesn’t seem like I can afford anyway) all on my very limited budget. Something has got to give. Right now, I’ve determined that something to be eating out every day. I’m going to learn how to cook and try buying groceries for two weeks to see how that works – right after I fix my fridge. I also need to create a plan to get rid of this $1500 in credit card debt. So, yes, I need a budget.
If you have any suggestions or resources, by all means let me know. I will still keep posting and definitely still keep adding to my dividend portfolio. I’m just not sure how much I can do until I clear up this debt.
Ouch, Sounds like the kind of times my wife and I had when we were first starting to get out of debt. Seems like every time we got $1000 in the bank for emergencies, a 2-3000 emergency would come up. Get that budget setup and just keep with it, you will eventually pull ahead if you are true to yourself and the budget.
As for tools, we found that the free everydollar budget that Dave Ramsey worked well for us. Plus we set up the emergency fund in another bank in town so we had to physically go in to make a deposit and withdrawal. We hyped the deposits up as grand adventures and having to drive to the money made it easier to resist the temptation of pulling it out the moment we thought of it.
Don’t know if that will work for you, but figured I would offer the advice.
Appreciate the advice Jd. I really just had a rough (and expensive) couple of weeks that just messed with my psyche and resolve a bit. I’m definitely committed to progressing forward with my goals. I’ve been meaning to try Dave Ramsey. I listen to him regularly on my podcast (haven’t in a week or so) but wanted to give the class a try. I know he has the home base study program, but wanted to the live interaction with other like minded folks. Thanks for the comment and the advice.