On Resolutions

We're officially half-way through the month of January, how is everyone doing with their resolutions? My last post touches base a little on one of mine, and that is being true to myself.  As is tradition (or so it seems) I also resolved to eating healthy and working out, neither of which I have done, tsk tsk.

I think my most important resolution this year is in paying off all non-student loan debt.  This resolution alone is the motive for moving back to Ohio.  Backstory: A lot of people are shocked that I quit the Dodgers job so quickly, but the truth was that at minimum wage, ($8 in California), I couldn't even afford my rent- let alone any other expenses, bills included.  So for the first three months in California, I lived on credit cards and racked up a lot of debt.  That deficit was hard to claw myself out of, even after I found a decent paying job- I was barely breaking even, still pleading with my parents for grocery money, and having an anxiety attack every month when I wrote a check out for nearly a thousand dollars in rent. So despite the friendships, despite the two-and-a-half block walk to the beach, despite the year-round sunny weather and even the steady paycheck, I decided the rational thing would be to move home. Otherwise, I would be playing the minimum payment game for a really long time.  I was one 'girls night out' away from living my own version of Confessions of a Shopaholic.

So here I am, in cold, blustery Ohio, living in the basement of my parents house, and working the weekends as a bartender.  It's not necessarily glamorous, but it's definitely living within my means right now.  While I am continuing with my job search for full-time work in Ohio, I've also devised a (preliminary) budget that allows me to move back to California- this time with sound financial responsibility.

I've always had a working budget, so to speak- but it only accounted for the minimum bills.  After those payments were made, anything was fair game- and I can't count on my fingers and toes how many times I wandered into Target and made mindless purchases, or went out to dinner with girlfriends and had too many bottles of sake with my sushi.  After stumbling upon Ashley's blog when she was the 20sb featured blogger in December, I found her secondary blog, A Story of Debt and found the motivation I needed to start making serious progress in paying down my debt.

Ashley links to financial planner Dave Ramsey and his guidelines, or the Seven Baby Steps. I encourage anyone who is struggling with debt to check him out, and I'll save you the nitty gritty details here.  The most important "walk-away" I got from perusing his website is eradicating debt using the Debt Snowball-- that is paying off the smallest debts first. Convention usually tells us to pay off the highest-interest debts, and yes that makes sense, but the debt snowball really plays on motivation.  How great does it feel when you accomplish a goal?  Pretty great, huh?  So with this method, paying off the smallest debt first helps you stay motivated and keep paying off the debt. 

Here is what my current debt snowball looks like:

1. Line of Credit (balance: $409.83)
2. Visa Credit Card (balance: $695.06)
3. Car Loan (balance: $5,258.24)
4. Visa Credit Card #2 (balance: $8,102.97)

It may be a little tongue-in-cheek to talk so openly and candidly about consumer debt, but if there's one thing I have learned, is that I am not alone. This keeps me accountable, and serves as a forum for discussion for any readers who find themselves in the same predicament.  Debt reduction is definitely a lengthy process, but I hope to share my story as the weeks continue.

Anyone else have a budget that works for them?