Babysteps.

I've been paying attention to Dave Ramsey, and I'm taking a personal finance class this quarter. Now, the quarter has been going on only two days, so I haven't really learned any valuable nuggets of personal finance information from the course as of yet, but I'm looking forward to what it'll teach and hoping it'll give me some great info to help me get things back in order.

As far as Dave Ramsey goes, i've been listening to him using an app on my iPhone. He's got some good advice, and it makes a lot of sense. I've been trying to pick up what I can, and think I've now got an even better idea of what needs fixed with my finances.

For example, I'm trying to focus really heavily on saving money. This is for obvious reasons, I need to have a safety cushion and be able to save for the future. But now I'm realizing that the debts I have are a toxic asset that need to be eliminated as soon as possible. This is because most of them are acruing interest rates that are at least 10 times the interest that my savings account is earning me. This means for every dollar I save, I may acrue an extra 2 pennies. But for every dollar of my debt, I'm paying an extra 15 to 30 pennies (depending on the debt). So in order for more of my money to be able to work for me, this needs to be eliminated as soon as possible.

Ideally, I'd have enough in savings to cover one year of income so that if I lost my job, I'd be ok. But that's not gonna happen for a while. I'm saving 10% of my income each week, starting at the beginning of the year (After my cancer scare and the depletion of my savings, and the subsequent lapse in responsible spending that followed while I dealt with that, I wasn't in a position to start saving again until after the holidays. I couldn't even afford Christmas presents for anyone.....), but at $14.00-hour at my day job, if I work 40 hours each week, my pay after taxes is only around $22,880-year. 10% of that is $2,288 saved in a year. It would take me 10 years, not counting interest earned on the savings account, to generate a full years salary by just setting aside 10% of each paycheck. That's not going to do me any favors, especially when I'm paying so much interest for these small debts.

So for now, the savings account would be more of an interest earning account to help increase my financial health, and provide me with an emergency fund. I have a $500 credit card that is maxed out with Chase bank, and it's an a 29.99% APR. If I make the minimum payments each month, it'll take me years to pay that off, and cost me a ton of money. I've had this card maxed out for years, and keep making the minimum payments each month, but keep jacking the balance back up when it's got a little wiggle room again. So I'm perpetually in debt, and have been paying chase 29.99% interest on a $500 debt for at least the last 6 years. That's rediculous, assenine, and a massive waste of my money over the last 6 years. That stops this year. In fact, that stops next week.

My very generous uncle Rick gave me a $500 gift to use to pay off that card. I did that in November. But then, I needed new brakes. My savings was already depleted from my cancer scare, so the brakes went on the credit card. I had that card paid off for a grand total of 3 days.  But next week, I plan on bringing the balance of that card back down to Zero.....and keeping it there.

If I were to follow the advice of Dave Ramsey, I'd close the card and cut it up. I'm not comfortable doing that yet, but am not likely to use it for anything other than emergencies. This is because I have virtually nothing in savings. I'll be working to build that back up, and will have stopped paying chase $0.30 on the dollar as of next week, which will free up that line of credit to be used for emergencies until I get a cash emergency fund in place. When that happens, the credit card gets closed.

Meanwhile, I'll have the money I was channeling into my Chase card available to apply to my NTB Citi card from the new tires I got last February. This is a $600 debt that I'm paying 28.99% on, so this is another toxic asset. Uncle Rick gave me $300 for this card in November, but I needed it for bills, so I'll be putting $300 on that card next week, which will cut the balance in 1/2. The next step will be to snowball the payments to that card so it can be gone a.s.a.p. This may include paying it off once and for all with my tax return, which I plan to file as soon as I get my W2's. Either way, my credit cards should be gone by summer, and that's a big sigh of relief to me. This will mean that more of the money I'm bringing in will be working toward my future, and not the bottom line of a bottom feeding credit card company.

So with my own credit card debts eliminated by summer, it'll be time to snowball my other debts, while resting on an emergency credit line that I hope to never use, and building a savings. Step one is finally back in action, and I do not intend to derail it again. I'm still picking up the pieces from the cancer scare's damage to my finances, and I will not allow that to happen again.

So now what? It's clear that this is going to be a lifelong practice from now on, but in order for my 5 year goal to come to fruition, I'm gonna need to make my money work for me. Step 2 addresses income streams that I'm trying to institute, but perhaps 3 would be diversifaction of assets. I need to figure out how to make the money I bring in work for me in a way that will exponentially increase my income, so I'm planning on using a portion of my tax return to invest. I'm starting small, and am going to do research to determine the best place to invest, but I am willing to risk a small portion of that money to see if I can turn that risk into a profit. It's a gamble, but then again so is everything. So I guess step 3 will be me figuring out how to best make my income work for me.

To Chase and Citi, you'll be an annoying footnote to me in no time. My advice to anyone considering a line of credit......unless it's absolutely vital, don't do it. Find another option. I've been a slave to these fucking cards for way too long, and I'm greatful to get the chance to get them behind me so I can snowball the remaining debts I have.

2017, here I come.