2012 Goal 2: Cash-only and no credit card debt
Over the past year I’ve been reading a few books on personal finance–many of which have been by Dave Ramsey. Dave Ramsey seems to be by far the most comprehensive in this subject and he seems to genuinely care about getting people to change their lifestyles and become debt free. Many of today’s problems–from individuals to governments–have to do with overspending. As Dave Ramsey puts it, being broke is the norm nowadays so we need to be weird and start acting our wage. So this year I am going to attack personal finance with “gazelle intensity”.
I have never been a big spender but I have definitely made my fair share of impulse buys–all facilitated by friendly credit card companies. I’ll see something I want and figure I’ll pay it off at the end of the month and then some unexpected but necessary expense will come along that impedes me from paying it all off at the end of the month. So I’ve decided to stop kidding myself and quit using credit cards. I’ve moved from using my wallet to using Dave Ramsey’s envelope system (seen in picture) and I have only transferred over necessary documents and my debit card. I’ll be using cash as much as possible but since this is the twenty-first century, I’ll have the debit card ready just in case. I’ve also signed up to Dave’s Total Money Makeover website to guide me through the baby steps. It will most definitely take some getting used to since I’m addicted to technology and convenience.
I don’t have too much credit card debt but I do want to see it gone as fast as possible. I have other debts like student loans and a car loan but those will understandably extend beyond 2012. I’ll periodically post about my progress towards this goal and discuss the experience of adapting to this new system.
Tomorrow I will discuss my plans for reading one literature book a month.