What Is My "Dumb Debt"?
For me, most of my dumb debt is still related to my early years of "independence" when I got my first credit cards and thought I could get away with paying for most everything with them, including occasional trips across the country with no real purpose. Other forms I've incurred are the "I thought I could afford to pay just that much more extra on this bill, but turns out I can't do math" debt that actually puts you further in the hole than you started. The shit that turns into a truly vicious circle.
Plan Time - Part 1
Here's what I'm doing, then. I've already created a full list of bills I must pay each month, where to pay them, logins and passwords, and the amount of money these bills tend to be.
- List out all the credit cards and determine which ones you have had the longest.
- Cancel ALL of the credit cards other than the oldest (the older the card, the more credit you are building with it, the way I understand it).
- Take the still active credit cards and lock them away somewhere safe so you won't use them.
- Continue to pay minimums on everything and put any (actual) extra money you can toward the cards that you have canceled until they are nothing but dust in the wind.
- As you keep going, choose one of your other bits of existing debt at a time to focus on and knock down.
Plan Time - Part 2
Obviously, I'm not exactly addressing ALL of the issues related to my dumb debt with Part 1 of my plan. That's where Part 2 comes in.... lifestyle change.
- Make a list of all the non-debt-related bills you pay every month and identify which ones are necessities.
- Cancel anything you can live without.
- Call some of the places that provide things you require (e.g. your internet provider) to see about any deals they can offer.
- Come up with a game plan that works for you to stop impulse spending in its tracks.
It's Step 4 that I'm really stuck on, however. Part of my impulse spending is in regards to food and eating out. For that, I can just work harder to make food at home and bring lunches to work. But what about all the rest of the impulse spending I do? What about my penchant for travelling and taking absurd weekend road trips?
Unfortunately, I don't have any answers for those questions other than, "Don't. Fucking. Waste. Money!" Clearly, that's not the greatest game plan. But I guess it's a starting point.
Oh yeah. And one last thing. Give yourself a freebie every once in a while! Just make sure that whatever it is is within reason(able pricing for your money). You can't be perfect ALL THE TIME. So don't try or things'll just suck.