Uncluttering my Finances

August 26, 2008 at 2:37 pm (clutter, finance, freedom, Life, Organizing)

I have been following a personal finance blog for about a year.  I often find myself nodding along with the advice that is offered, yet at the end of the month my own finances would be a mess.  I would try cutting back on lattes, fast food and spontaneous purchases and still be burdened at the end of the month, somehow overextending myself again.  I started balancing my checkbook for every debit, check and automatic billpay.  I tried to be noble and put 50.00 of every check into my savings and while I saved some money I was still short at the end of every month.  Just as I was thinking I would never get out of this cycle my favorite blog (www.thesimpledollar.com) wrote about the snowball method for paying bills down.  I had read about this method before and thought while it sounded nice I was doing just fine paying my bills.  I always paid on time, and I paid extra on some of the bills.


The current state of the housing market is what gave me a wake up call.  Homes in my area have really come down in price and I am an apartment dweller.  This is my market and my chance to own a home in a great area.  The problem: I have nothing saved and too many bills.  So I jumped in and started my “snowball”.  I found out where all of my money was going.  I was actually paying more than what I had could afford on many bills, then at the end of the month when I ran out of funds I would charge gas to a card.  The bad part is every time I used my credit card to pay for gas I had to pay interest on the purchase.  I think you can see my little cycle now…


I made a list of bills:  smallest to largest, had a column for amount owed, minimum due and amount paid.  I totaled the amount owed (this made me feel a little faint) and totaled the minimum due column.  I rounded my minimum due column up to the nearest hundred and I paid only the minimum for every bill EXCEPT the smallest bill.  The smallest bill I threw the remainder of the minimum due column.  I started this in the beginning of July and will have paid two bills off by the end of September.  I am working towards eliminating my debt by spring 2009.


Along with the snowball I am saving a portion of my paycheck every month to save for the ultimate goal of purchasing a home.  It is just a beginning and I know I have a long way to go, but I feel great knowing that I am one step closer to reaching my goals.





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