A “spending fast”? Really? Why would you do such a thing?
Lets Go Back…
In December 2010, I saw a story on 9 news about a woman who did a self-imposed, 1 year “spending fast”. Anna Newell Jones (And Then She Saved) decided to do this experiment and start a blog about it . Turns out, she was able to pay off $18,000 worth of debt in 1 year. (You can also check out some other blogs/articles/how-to’s of others who have been doing it for years: “spending fast”: Other Resources)
This got me thinking…
I have a ridiculous amount of student loan debt and I had always thought it would just be there forever, so what’s the point of being aggressive? Thinking about the debt puts a knot in my stomach and the more I think about how much debt I have, the bigger the knot gets. Drastic times call for drastic measures.
Here’s the breakdown: In December 2010 I owed
- Private Loan: $33,123.70
- Original principle : $41,744.24
- Consolidated Fed Loan: $29,910.98
- Original principle : $30,977.68
Looking back at the original principle amounts for each loan, I had made some progress on my private loans, since I have always paid a little extra to them. My consolidated fed loan, however, has only decreased by $1,000 after paying on it for 5 years! Ouch.
Directly after graduate school I was $72,721.92 in debt and a Social Worker. Social Workers aren’t exactly notorious for being rich…
Over the years, I have been able to pay off all my credit cards and my car. I’ve also been lucky enough to work for a company that gives yearly raises, bonuses and pays their workers for credentials. But, it seems like every time I get a raise or bonus, I just buy more stuff.
The Time is Now
Back to December 2010. As I thought about this experiment, I originally decided to do it for the month of January. I was feeling pretty noncommittal and the thought of doing this for a year was frightening. I also decided that in January, I would focus on finding ways to save money.
In January, as I was lowering my monthly bills I felt like I was on a roll. I didn’t want to stop the momentum and just go back to my old ways. I took a deep breath and committed to do this for a full year.
I told The Mister that this was my plan. His response was “Just tell me how I can support you in doing this.” By nature, he’s generally a pretty frugal guy and has always been a little annoyed by my spending habits. It never really mattered much to him, since we keep our finances strictly separate. We realized early on that we have very different views of money and spending and decided for love’s sake, we’d do our own thing.
After I made the commitment to make this a yearlong gig, I told those closest to me. I wanted to make sure that the people around me realized I would not go out for dinner/drinks, see movies or buy them gifts. (I will make gifts…more on that in my rules…) My quest to save money and lower my bills raged on.
I then had to decide how I would tackle this debt. Dave Ramsey has a pretty well-known “Snowball Plan” for paying off debt. I’ve read up on this in the past and it makes perfect sense to me. There’s also a similar “Avalanche Method”. The difference between the two is whether you tackle the smallest debt first to gain momentum or the debt with the highest interest to pay less overall. Since I have 2 stupid amounts of debt, I decided to go with the avalanche method so I can pay less interest overall. Being the geek I am, I found a spreadsheet to track my progress and see some real numbers. Since this is going to take years, I must have something that shows me the result and the amount of time it will take to get to my goal. It’s actually a pretty nifty spreadsheet. You can choose between the Snowball Method and the Avalanche Method. You can get the spreadsheet here
So, there you have it. That’s why I would do such a thing.
What will the future hold?
I don’t know. Let’s just see where this crazy train takes us…
