DebtFREE-Revolution

I don’t make New Years’ resolutions anymore.  When I was younger, I used to…and they would break by March at the latest.  Of course, I made all the same ones everyone else does: lose weight, stop smoking, get in better financial shape…. but no more.  Around the personal finance blogosphere people are making their New Years’ resolutions.  Instead, I have a PLAN.

There’s a huge difference between having a plan and having a resolution.  There’s also a big difference between a goal and a plan.  At first glance, it doesn’t sound like much difference in definition among a resolution, a goal, and a plan.  But the devil is in the details…here it is all about connotation.

A New Years’ resolution is something that sounds good when you say it at the beginning of the year…and falls by the wayside as winter melts into spring and blooms into summer.

A goal is a dream you intend to realize, but so often lacks combats boots to march through the muck and mire that life loves to throw at you to test your mettle.

A plan is the five paragraph op-order that spells out everything needed to get it done!  The details have been worked out until they are buff.  The contingency scenarios have been thought of for when you get ambushed by life’s little examples of Murphy’s Law.  And if you end up being more successful than you initially figured..that’s in the plan also!

So I am not bothering with a New Years’ resolution anymore.  I prefer to make solid plans to get to that goal I dream about.  So, what’s the plan for 2008?  I’ve already mapped out the year ahead of us financially :)

I’ve got a slight case of blogger’s block (similar to writer’s block) so I thought it would be a good time to do a few announcements  and recaps :)  The first major announcement is that I stepped down from the M-Network this month.  M-Network is very active, and with me taking organic chemistry part 2 next semester I just can’t keep up.  It isn’t really fair to candidates waiting in the wings for me to occupy the place since the network is limited to 10 blogs.  I feel very sad to have to do this, and hope to rejoin as an active member again someday … when I am not taking the brain-draining chemistry classes.  Which might be a few years (or five…).  When I stepped down, my credit card debating buddy Patrick from Cash Money Life got the nod to join.

Speaking of credit card debates… I have been challenged once again!  Madison from My Dollar Plan is a self-described credit card “junkie” who loves her credit cards…and has HOW MANY???  Y’all will just have to hear it from the horse’s mouth because I cannot get my fingers to type that number.  We’re planning to start the debate on January 4th, 2008 so mark your calendars and be sure to be subscribed to both blog feeds (or by email) because this *will* get interesting LOL  Other bloggers are welcome to contribute both in the comments and on their own blogs, with the only rule being to keep it civil, because it is a friendly debate.

Finally, with the semester break and no holiday travel plans, I had the opportunity to participate in a couple of blog carnivals again.  Of course y’all just knew I’d have to contribute to my favorite, the Carnival of Debt Reduction.  I have absolutely no idea what mbhunter was going on about with the blue and orange bit…especially since my Steelers’ colors are black and gold.  For the record, the CoDR post (You CAN Get Out of Debt)  is now my most-commented post on this blog… and more comments still trickle in.  Also, my submission to the Carnival of Personal Finance was chosen as an editor’s pick over at the Digerati Life, I am honored, SVB!

Yesterday I took a look back at the previous year of getting my finances into order and working hard on debt reduction.  Today I want to look ahead, at the year coming up.  And WOW does it look good now!

First thing first will be to kill off the truck note in late March or early April.  There is simply no doubt in my mind, that note (auto loan) will die.  It’s all just a matter of which pay period will be its undoing

Once that truck note is dead, we will be debt free but the house!!!  Can I say that loud enough, or with any more possible enthusiasm??  The only debt left after spring will be our mortgage!  We will be earning interest instead of paying interest, and that will SOO rock!  I am seriously considering a small victory celebration when we hit that milestone…like going out to a fancy restaurant the very next month and having a dinner that costs the equivalent of the monthly truck note LOL  Well, maybe half the truck note…I’m not sure I can eat that much steak, shrimp, and crab legs.

After our little celebration is concluded, it will be back to business by stuffing the freed up money into our money market emergency fund.  At some point we will need to replace the heat/air unit for the house which will require new duct work.  I also want to have at least three months’ worth of expenses just sitting in that account on top of the CHA fund to catch any slack Murphy sends our way.  I figure we can accomplish this by August or September.

I’d like to pay my son’s private school tuition in one fell swoop, which has a 1 or 2% discount for doing so.  This year, like last year, I had to sign up for the monthly option since we still have debt that requires paying.  I’d also like to get a pharmacy school tuition fund going for me.

When the fall starts I intend to be at the investment  phase of Dave Ramsey’s “baby steps” and look forward to upping hubby’s TSP contributions to 15% of his income.  Then I can bump up my Roth IRA contribution above the paltry $50 a month I am doing now.  I know I will need to spend the summer learning more about investing, which I currently know so very little about.

I plan to finish up 2008 with a nice holiday: I might make some gifts (jewelry making is my hobby and what I did this year) and a nice family vacation.  No sleeping on mom’s futon in her basement; we will actually stay in a hotel room for once!  By December 2008, we will be out of debt except our house.  We will have a full emergency fund, a CHA fund, and tuition funds in the money market account.  We will  be saving up a good amount towards our retirements.  We will be able to do just about whatever we want for lodging, eating out, and gift buying.  We will be able to live and demonstrate financial peace to our families!

This next year looks very sweet indeed!

One year ago today I was in a totally different place financially!  For the full story, take a look at my story about how I found Dave Ramsey.  Most Ramsey fans I tell it to call it providence or “meant to be.”  That post has alredy been written, so today I am going to take a look at the turn-around in my financial picture…and what a difference a year makes!

Everyone’s financial life is subject to Murphy’s Law, and mine this past year has been no exception:

• At the end of last January, my heat broke at the start of a cold snap.  It was 21F outside, and maybe 22F inside when we woke up on a Saturday morning.  Repair bill was $1140 when it was all said and done!  I had just put $1000 in my savings account ans my baby beginner emergency fund, and the first Murphy visit was more than that!  I’d like to say my first time paying cash for a real emergency was a peaceful thing…but I was spazzed.  The upside to this was actually fixing that thing has saved me $30-100 per month in utility expenses.
• In May I thought I heard a squealing when I braked on the Pizza Taxi.  I wasn’t completely sure because not only is my hearing a little off, but every weekend I feel a need to prove to Clarksville that I have at least one blown speaker in that car LOL  When I took it in for a brake inspection the verdict was both rotors, both drums, both sets of discs, and both sets of shoes needed replaced!  That’s definitely a safety issue…so $538 to completely replace the brakes on all four wheels.  This time, I felt good as I just PAID it.  My son was there with me, and asked if we could afford that much.  It gave me a wonderful opportunity to explain the emergency fund concept to my teenager!
• Just this month, the Pizza Taxi died out on delivery with some form of electrical problem.  Total bill this time including the tow was $509, and provided hubby with proof our financial plan is working and working well.  This time I cash flowed the “emergency” (which was really more of an annoyance) and didn’t even touch the true emergency fund.

That was the bad news for this past year…now for the good:

• I paid off a personal line-of-credit loan at my credit union, $500 + a little interest.  This had been used for last fall’s tuition..or was it the spring semester before that…?
• I paid off the Pizza Taxi a month early, even though it was not a pizza taxi just yet.  Not having that car note helped rebuild the emergency fund after the heat breaking.
• I paid off Thanksgiving and Christmas that I had put on the Chase MasterCard with the tax return, before the 0% interest had expired.  Whew!  Dodged a bullet there…!
• I paid off American Express, even though they tried their darnedest to make that as difficult as possible.  I detail their dirty tricks in my “Three Paid Cards” post.
• I paid off the AAFES Star Card…just like that.  That one was impressive even to hubby!
• We’ve paid off at least $15,000 of hubby’s truck note.  We started the year off at least $7000 upside down in it…now we only have $7167.03 left to go, and we will be debt free but the house!
• Not only did I pay off the LOC from last year’s tuition, but I have paid for two semesters’ tuition plus textbooks of college for this year … CASH.

Holy cow, that is a serious turnaround in just one year’s time!!  Last year I was scared and worried and majorly stressed.  This year I am extremely optimistic about my financial future, and that peace of mind is hard to quantify in monetary terms … but to use the advertising slogan, it’s PRICELESS.

Dave Ramsey did a “giving hour” on Friday and one of his callers described something they call “elfing,” which is going out to eat and leaving a huge tip for the server.  I think this is a great idea (especially since I work for tips as a pizza delivery driver!) and we just got back from doing a little of it ourselves.

We had brunch at Waffle House :)  It’s definitely nothing fancy or high-class, and the place was pretty much dead in terms of busyness.  We both had big breakfasts and coffe with the bill totalling $18.58.  I placed $25.60 on the table, then hubby reached into his wallet and pulled out another $5 bill so we gave that waitress a $12.02 tip!  I had grabbed a napkin and wrote “Happy Holiday” on it with a smiley face.  As I was getting into the truck, I saw her waving to me from inside.

Most people don’t like to work on a holiday, and most of the waiting and delivery staff you see working a holiday is doing so because they need the money.  Today and tomorrow, find a not-fancy place that is open and eat a simple sit-down meal…and leave a big tip.  Or call and order pizza and give the driver a big tip.  Friday night a fellow handed me a $10 tip and it really brightened up my night at work.  I have no doubt that waitress at Waffle House had her day brightened by our tip.  Pass it around…give someone a reason to smile!

I participated in Lynnae’s 12 Days of Christmas, PF Bloggin’ Style, and promised everyone a wrap-up.  So here it is folks, with the proverbial red ribbon:

• 12 Frugal Things (to cut your budget)
• 11 Ways to Get Paid
• 10 Creative Ways to Destroy your cards (a personal favorite)
• 9 Financial Tips
• 8 Tips for Efficiency
• 7 Things when you’re swimming (in debt)
• 6 Streams of Income
• Five rules for snowflaking
• Four calling tips
• Three Paid Cards (credit cards!)
• Two ways to financial freedom
• and The best way to manage money

Enjoy the long holiday weekend!  I’ll be out in the Pizza Taxi tonight and tomorrow night, which pulled a five hour shift last night with no problems (HOORAY!) and trying to convince hubby to let me open my presents early.  LOL  I’ll probably get some ideas and post during the holiday, so if you’re at a computer take a peek.  Those of y’all who are travelling STAY SAFE and have an great time :)  And if you order pizza…tip the driver a little extra because it just might be me!

The past couple days I have been on this kick started by my father-in-law who insists people “need” to have credit to survive, and plonkee’s comment that I am “insistant.”  Plonkee asserts that not only am I insistant that *I* will get out of debt, but I am insistant that ANYONE can get out of debt if they really want to and really try.  As you can tell by the title…that is today’s post.

The first thing to getting out of debt is wanting to get out of debt.  It may sound strange until you consider how many people have given up on the notion. 

“You’ll always have a car note…” (auto loan payment)

“You’ll always have the house note…” (mortgage)

“You can’t survive without a credit card…”

Why make it easy for these money parasites to suck the cash right out of your bank account balance?  Get mad!  Get determined!  Say out loud: “I WILL get out of debt!”  Make a decision, make a plan (budget), then make it work for you!  This is where that whole “power of positive thinking” and “law of attraction” concepts come into play: in your mind.  Another corny but very true phrase that comes to mind is “If you can believe it you can achieve it.”

Folks, I hate to sound didactic here, but it’s just the truth: If I can do it then anyone can.  Many of y’all couldn’t even pay your necessities on what we bring home between hubby’s E-4 Army pay, my VA Disability, and my pizza delivery money.  That includes you PaidTwice, with your little snowflakes towards your debt…eventually they will roll up into a snowball…then an avalanche.  Just keep the faith.  That includes you Lynnae, even with your income problems right now because you know how to play good defense by making every dollar stretch.  The income will come back, and then your frugal skills will get the most out of it.  I’m picking on these two ladies because they particpated in my “If I were debt free” meme and both sound uncertain they can make it.  Get determined…get bullheaded if you must.  It’s working for me, and it will for you also!

If it’s good enough for these gals, then it’s good enough for everyone who reads my blog.  If you don’t like the Dave Ramsey way, then there are plenty other ways out there to get out of debt.  Personally, it doesn’t matter to me if you use the Dave Ramsey snowball or the interest-rate first snowball or something you dream up (and if it works then you can write a book about it also LOL).  The important thing is that people get out from under the stress of owing more than they make.  And Mom, if you read this…that means YOU too can get out of debt, even if you don’t think you are as stubborn as I am.

It’s all about the mindset folks, so let me hear y’all scream it in the comments.  So, who’s getting out of debt with me???

For many many years I have been called “stubborn” by my mother.  When she actually admires my bullheadedness and stubbornness, she will call it “determination.”  Just recently on a blogger board, plonkee called me “insistant,” saying I am insistant about getting out of debt and that anyone can get out of debt also if they truly want to.

So, what does this have to do with debt reduction?  Well, last night I came across an old thread I had posted over at MyTotalMoneyMakeover.com grumping about how hubby didn’t believe me when I told him in July that we would pay off the truck note in 12 months or less.  In that thread, I listed the truck note balance as of June 30th, 2007 as $17,645.03  If y’all take a look at my debt reduction chart (courtesy of No Credit Needed Network) you’ll see that balance is down to $7167.04.  That’s over a $10,000 difference in less than 6 months!  We are on schedule to pay that stupid truck note off in late March or early April 2008, about 3 months ahead of the time I promised hubby.

This makes me wonder: am I stubborn?  Determined? Bullheaded? Insistant? Or just crazy enough to have pulled this off against all odds and in spite of the naysayers (which for 8 months included hubby)?  And am I really pulling off “the impossible,” as the so-called conventional wisdom and mainstream media would say?

I know there’s quite a few more of y’all who are doing the same thing I am: Getting out of debt.  Do any of y’all feel this way?  Especially when confronted with the pervasive idea that you “need” credit to survive in this day and age?