Friday, March 12, 2010


Paul and I have horrific credit. Until a month ago, we had a large debt owed to my parents and three maxed-out credit cards. It's a sad fact that, when we were young (by which I mean a year ago and before), we had an emergency or two, and then proceeded to treat our credit cards like free money on our honeymoon. In case you haven't guessed, this is a stupid, stupid idea, and will land you at the mercy of the Card Services department of whatever institution is issuing you a line of credit. They are generally nice people, I've found, but I still really don't want to talk to them.
However, about six months ago, I discovered the Dave Ramsey plan. I knew the plan wouldn't work for us in it's original form, given that we were living, literally, right at our means. There was zero extra money, and the Dave Ramsey plan really needs a tiny bit of extra money to get it going. However, tax season was looming, and, with me paying estimated taxes and the fact that tax law has really never been nicer to poor folk like us, I knew we could expect a good chunk of change, which would serve as the catalyst for The Great Debt Payoff.
Happily, I was right. We were able to pay my parents all but $500 that we owed them, and they were gracious enough to cancel the rest. With the extra money that would have once gone toward paying my parents, we payed off our smallest credit card and closed the account (I, for the record, do not care that closing a card hurts your credit. There's very little that could damage my credit and make it worse than it already is). The next card is relatively small as well, under $1000. We should have it paid off within the next three months. Following that, we move on to our biggest debt, a maxed-out BoA MasterCard that has been looming over us since our honeymoon. It's due to be paid in full by next May.
We are far from out of the woods, and I sincerely doubt that anyone will extend us credit for the next seven years, but I am taking comfort in the fact that we did something about our debt before we were buried beneath it, and that there is an end in sight.
The moral of this story, kids, is that credit cards are great for building up credit, which in turn is great for buying things like houses and cars. However, it's easy-peasy to see the plastic as free cash and just start throwing it around. Don't.

1 comment:

  1. I heard about financial peace university once I met my dh Rick. His parents managed to get out of a large amount of debt and are now living debt free thanks to the program. Before I met him I didn't really see anything wrong with charging things with my credit cards...until the bills started coming in. Thankfully my credit cards are paid off and we're working towards paying off our other debts. The feeling we get when we pay something off is much better than the that high you get from spending money you don't really have.

    Good luck! I hope the program works for you too! :)