I have been reading a lot of personal finance blogs over the last few months and one that I consistently follow is Yes, I Am Cheap. The author writes anonymously but she’s relateable, funny, and chock full of information so it’s a double winning blog for me.
This week Yes I Am Cheap ran an article called Get Out of Debt in 2012: How Much Do You Owe? She writes about looking your debt square in the face and making a plan to get out from under it, something that I have learned from her blog. Though it is scary (eek! look at how many digits that number has!) it’s always best to begin somewhere and know where you are when you begin.
I have followed Yes I Am Cheap‘s example for a few months now and have been diligently tracking all my debts and tracking my payments. I keep it all in a handy dandy Google Doc and even made a graph to see my progress visually. If you don’t already do this, I highly recommend it. Here’s what Yes, I Am Cheap has to say about it in an excerpt from Get Out of Debt in 2012: How Much Do You Owe? and you can read the entire article here.
“Since getting out of debt is so simple, why aren’t we better at it? This part really IS simple. It’s because we
don’t have a plan, or a roadmap for getting to where we want to be. I’ll use an analogy from my boss: it’s like drive to California from the East Coast without a GPS. You know that if you drive west long enough you’ll get there eventually, but it would probably be easier and quicker to get there with a GPS.
This is your GPS…
If you’re a long-time reader (love you), you might follow my monthly posts (usually on the first or second of the month) where I spell out my debt, how it was impacted and how I made some extra money during the month. This is the cornerstone of my blog, because it’s also the cornerstone of my debt reduction plan. If you’ve never really sat down and look at all of your debt in one place, you may need to prepare yourself. Your first task is to gather all of your debts and put the totals together somewhere.
I used to compartmentalize my debt. I owed student loans this much on this loan, this much on that loan, oh and this much on the other loan. I owed Macy’s this much every month. I owed the MBNA MasterCard that much per month. It wasn’t until I really sat down and wrote down my how much I actually owed each of my creditors and what my minimum monthly payment for each of them was that it really hit me. I was in some deep shit and the money that I threw at my debt every month was never going to plug the hole. Seeing all of your debt in one together in one place gives you real and lasting perspective. It’s like a having ice cold water tossed in your face in the middle of winter.”
Do you track your debts and your progress in paying them off? If so, how do you track them? Leave a comment below. I would love to hear your experience!
Thanks for your nice words. I'm excited that you'll be following this crazy little experiment with me.
I'm glad that you're tracking your debt. It makes things so much easier when you can actually look at the numbers all together. It's kind of scary at first, but it gets so much better and easier at some point.
Hope you have fun with this!