Tuesday, March 9, 2010

Reality has set in

I started doing Financial Peace University, Dave Ramsey's class, through my church. It's been okay so far...nothing revolutionary, but some good ideas and discussion with other people. There are a few other single people, and one of my friends who is a teacher, so it's nice to talk with her. Also, I think down the line I will get a lot out of it, since he'll cover investing and retirement, which I know nothing about. Last week was about money and relationships. I told my friend Ana that we should have ditched the class and gone out to try to meet guys. But I digress.

One of the assignments was to do a "quickie" budget, listing your monthly expenses. In one column you had to list how much was left to payoff any debts. I listed my student loans, my car, and of course the dreaded credit card debt. Adding up that column was super depressing. I never think of my student loans as "real" debt. But they are.

Granted, I don't regret taking out loans. I wouldn't have been able to go to college otherwise, and though I went to a private school that costed more, I had a great experience and met many of my best friends there. So I don't feel about it the way I feel about my credit card debt, which consists mostly of Starbucks and Marshall's.

BUT, the reality is that until those are paid off, I will have debt hanging over me. Dragging me down. I was imagining how nice it would be to get to do what I want with that extra money. Save it. Put something in a retirement account. Actually go shopping again at some point.

So, obviously credit card debt takes top priority. Then a $1,000 emergency fund to start. Then paying off the car aggressively. Then the student loans. Then three-to-six months expenses in my savings. Then a house down payment.

I think I should change the name of my blog to "Debt Free by 30." Or "Oh My Word, I Have More Debt Than I Thought."

4 comments:

  1. It really is scary when you actually add the numbers up, but it becomes kinda fun trying to make them go down to nothing!!!

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  2. I can't wait to take Dave's class, but I'm waiting until hubs and I can take it together. Otherwise, what w/be the point? Would love to read future posts on your thoughts and experiences of your own in that class.

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  3. Dave Ramsey knows his ish. However I don't follow his investing advice at all. He says to find a good mutual fund with a good 10year track record and let it ride. Which is generally good advice, but I'm more hands on then he would advise.

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  4. Dave Ramsey has some good advice, but sometimes it is wise to move some steps around. Like in this housing market, I would look at getting a down payment in order after you get the CC done. While paying down the student loan is important, I wouldn't put off buying a house during a good buyers market off. You could end up costing yourself thousands of dollars both in cost of the house and interest rate if you follow his logic to a T and wait.

    You shouldn't buy a house till you get out from under the CC's, but depending on the market you should analyze decisions and directions often.

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