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."


  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!!!

  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.

  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.

  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.