So please tell me that I am not the only one that struggles with this. What can I say, they trapped me. I had just turned 18 and discovered the beauty and magic of credit cards. Plus on top of that I had found out that I was pregnant, so everything was charged. Baby stuff, clothes, maternity clothes, lotions, blankets, lunch, everything went on my cards. And it's not to say that I didn't have any money, but the thought of keeping the money that I had and just making payments on a card was just an easier thought.
Now 3 years and 9 credit cards later, I have racked up about $3,600 in credit card debt. I've always had a hard time living within my means. If I see something, I can easily talk my way into finding a reason why I need it. My boyfriend is the exact opposite, he will not buy a things, and says needs to have an amount saved in the bank before he will buy anything. Oh the joy of having money.
So I desperately need to come up with a plan. At this rate, when get older, I will have so much debt, I will not be able to buy a house, get a car, or be able to pay for Truly's college! So while I am young I want to go ahead and pay off this debt. All of it! Especially since right now I am in school and live at home and don't have too many major bills. So I went out and bought as many interesting Finance and Budgeting and Money self help books I could find. After many days of highlighting and copying, I found that all these books and all these website pretty much said the same things, and it was all common sense really. Here's what I've learned:
1. Pay off balances with the highest APR first. You don't want to have to be paying just the interest for 5 years.
2. Pay more than the minimum balance on credit card payments. I know it may be tempting to just try and pay the minimum, but you will see your balance disappear a lot faster if you pay more.
3. Create a budget. Create a budget and live within your means. Make sure a good chunk is going towards your credit card payments. Make sure your budget is reasonable and adjust it to your life. If every weekend you have to go to Starbucks, just order a size down and don't grab the pastry, you'll find your wallet heavier and your waist slimmer.
4. Monitor your credit report. This is really essential because not only are you up-to-date on balances and APR's but you can see your credit score and just re-evaluate your situation. (Oh this was an eye-opener for me.)
5. Establish a savings account and build it. I found the reason why I used my credit cards so often was because it was an "emergency" or I didn't "have the funds" available. So I began putting money in my savings account so when there was an emergency, I would use my savings account debit card instead of a credit card.
6. And most importantly, DO NOT USE ANY MORE CARDS. Leave them at home, cut them up, just take them out of your wallet. This was hard for me because even though you would leave your credit cards, most store credit cards can pull up your account right there in the store. So I had to be really strict with myself here.
So there it is, my plan. I have already started a little bit and have not used a credit card in a little over 4 months. A big step for me. I learned that not only does credit card debt affect how I am living now, and take money away from me, it also will affect my future, and decide what I can not purchase and how I will live my life. It at least has done one positive things for me. Make me more money-savvy!