New Year's Resolutions - Living Debt Free

Okay, for those of you with debt, number one, YOU ARE NOT ALONE. I don't know many people today who aren't fighting to pay off some sort of loan. With costs going up and pay raises tanking, it is getting relatively more expensive every year just to maintain the status quo. Let us not even get started on the lousy job market. I know someone with a college degree who was recently incredibly happy to get a job paying barely more than minimum wage.  Now they only have to work two jobs instead of three.

My coworker recently told me that she read a study about what recent graduates are hoping to achieve. Her generation wanted to achieve home ownership and a family. My generation? They just want to get out of debt.

I've been obsessing over this for a few years, but until recently I didn't give myself any tools to deal with it. It is hard to know what to do unless you have a complete picture. So for the last six months or so, I've been tracking our total debt by month I highly highly recommend doing this if you have debt, for two reasons.  (1) it lets you know that you are making progress and (2) motivation to pay things off faster, because you can see the results. You also cannot ignore it in the hopes it will go away. Trust me, it won't go away unless you make it go away.

Here is my graph. The leftmost point in the original loan amount, and the points then on are total at approximately the first of each month. I removed the actual amounts to protect our privacy, but let me give you some inkling - we have law school loans, my undergrad loans, a house, some credit card debt, and some medical payments. At our current rate, it will take us about 20 more years to pay this nonsense off.

Here's the good news - if I can pay an extra $20 on each of those accounts every month, I estimate I can knock two years off that total.

Well, the new year is coming up and what better time to make resolutions? Our number one expense outside of monthly bills is food. And there are always impulse buys. Like that fabric I just HAVE to have. You crafty people will empathize with me.

My goals starting next month are:

(1) Cut food spending by 20%. This should be easy to do if I pack us lunches for work every day.

(2) No crafty purchases, except to finish a current project (thread, backing fabric, etc). I have enough UFO's to keep me going for years. When I run out of fabric, we'll discuss altering this scheme.

The end game here is to become debt free in five years (ambitious, yes?), quit my job, go back to school for my PhD, and raise a couple of genius monsters. I'll be using this blog to hold myself accountable, so expect periodic and boring updates.

So I guess what I'm saying is: Don't be discouraged, keep plugging away at it, and track your progress! If my lovely readers are interested, I will turn this into a Living Debt Free Support Group linky party every month.