have a plan

Living unconsciously (that is, without an explicit plan or road map) can be an okay thing.  Throughout my undergraduate career I drifted a lot, studying what was interesting and picking up a few accidental degrees.  I did what I felt like doing, and didn't think overly much about where I was going or what came next.

By and large, this worked out just fine; I've got a fantastic husband, several bachelor's degrees, a heck of a lot of experience performing on stage, and a wonderful circle of friends.

The downside is that the hakuna matata approach was applied to my finances as well.  I got a credit card, and then signed up for another one when I was at a conference and they were offering a spiffy-looking duffel bag if you filled out an application.  My parents continued to support me for a few years into college, and I generally spent everything I had.  Oh, my upbringing led me to be generally frugal and I didn't spend lavishly or anything, but I didn't really think about saving and didn't worry too much about carrying credit balances.  I lived beyond my poor-college-student means.  But I'd pay it later.  No worries!

Fortunately I went to an exceptionally inexpensive university, so my debt is a microdrop in the bucket compared to those who had to finance, say, law school.   However, debt is still debt, and it's still an albatross around one's neck.  Making a good salary but seeing such a large portion of it going to fund my past self is rather dissatisfying.  Think about what I could be doing with that money now!  I could be making our emergency fund so comfy that we really don't have to worry about it.  I could be saving up for trips overseas.  I could be throwing awesome parties for my friends.

Now I have a plan. 

My plan, as I've written about before, has several steps.  Fundamentally, it's the snowball method.
  1. Stop putting anything on credit cards.  No really.  Even if you're going to pay it off right away.  You got yourself in this situation, so you obviously cannot be trusted.  Put down the plastic.  Credit balance only gets to shrink from here on out.  
  2. Prioritize debts to pay off.  I chose the smallest-balance-first method because it provides small victories sooner in the process, though as it turned out in my case highest-interest-first would have resulted in the same prioritization.  
  3. Budget a total amount of monthly cash for debt repayment.  For me, this is around 40% of my income, and that seems to be sustainable in my current life situation. 
  4. Make minimum payments on all but the highest priority debt.  Throw the remainder at that high-priority albatross.  
  5. When one debt gets paid off, throw a party!  Your snowball is now bigger.  All the money that was going to the debt you're now free of can now be assigned to the second-highest-priority debt. 
  6. Throw snowflakes at the process when you can, but don't go overboard.  Even if it's for a good cause (getting out of debt), violating the master equation isn't very nice.
  7. Rinse, repeat.
If you're a total nerd like me, a complicated spreadsheet can help, because it forces you to put all your numbers in one place (no hiding!).  It's also fun because you can adjust your monthly debt budget and it'll show you both how much sooner you'll achieve debt freedom and how much less interest you'll wind up paying.  Admitting you have a problem really is the first step.  Look at that total number.  Now look at how much interest you'll pay just for the privilege of owing money.  Notice that it sucks.  Now make a plan!

Bonus points if you can stay out of debt after achieving freedom.  But that's a future mission, and is beyond the scope of my project right now.  

At this rate, I'll be completely debt-free in December of 2013.  Sooner, if I can scrape together more snowflakes.  Here's to freedom!

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