The Truth Hurts

I want to start this post by just saying that the truth hurts. My husband and I have been living in denial for at least 5 years about our financial situation and it is worse than I ever imagined it to be. Is it impossible? No. However, I do feel as though it is going to take us so much longer than I ever expected it to.

For the past few days we have been working together to organize our debt so that we can create a budget and get cracking on this beginning in the new year. In doing so, I have learned (and quickly I must add) just how ignorant we were to our spending. For example, in the past month we have spent OVER $180 in Starbucks...no wonder they know me by name...I'm there 3-5 days a week and at $8 a pop - that quickly adds up. I also became aware of just how much credit card debt we have and to be honest, its embarrassing and disgusting. I don't see how we haven't had to file for bankruptcy. I also learned that it's time to start shopping around for new options for things like car insurance, cellphones, utilities, and so forth.

At this time I am just writing everything down on paper with bill name, due date, amount expected to pay or minimum payment, and if it is a debt, the payoff amount. Even though interest rates are important to be aware of I haven't been focusing heavily on these as I plan to use Dave Ramsey's "Debt Snowball" tactic to pay them off.

The Debt Snowball tactic only means that you pay off the smallest dollar amount debt first and pay the minimums on all others. Then once the lowest debt is paid off - you take the amount you were paying on it and apply it to the next smallest debt and so on until you are debt free. Handling your debts this way is supposed to allow for small success and to keep your momentum going - I see a lot of value in attacking our debt this way but I will update you if it does not work for us.

Please stay tuned as my next post will air out all of our debt laundry - I will come clean with how much we make per year, how much we are in debt, and what our plan of attack is. I know in my heart it will be the hardest post I will ever have to write because the truth hurts and I am ashamed to admit to myself just how bad it has gotten. I also know that the first step is admitting we have a problem...and Houston...WE HAVE A PROBLEM!