My Journey to Positive

Two of my goals for this year are to pay off my credit card debt and reach a positive net worth. Well, as it turns out, both of these could potentially be achieved back-to-back. And in the next month.

Based on my mutual funds + savings + the value of my car, I only need to payoff another $600 of debt, before I will finally be worth something. That’s a credit card payment + a car payment + a personal loan payment.

And, in case you missed my freakout on Twitter or last week’s spending report, I got my 2011 tax return on Thursday and put the entire amount + more on my credit card debt. I only have $500 left to payoff that former $6,500 debt.

I will definitely reach a positive net worth by the end of this month and, if I balance my budget properly, think I’ll be able to wipe out my credit card debt too. While staying positive helped make both of those goals attainable, I’d be lying if I said I wasn’t a little anxious.

I don’t think I’ve had a positive net worth since before I got my first credit card; that was 2004. Then I spent 7 years using my credit card like it was an extra bank account. Free money, if you will. And while you would think the last year had changed my personal habits and behaviours, I am not 100% confident I am “cured.”

A few friends have asked how I’m feeling, being so close to having my credit card debt paid off. I answer honestly by admitting that all I want to do is shop. You all know how little of that I’ve done, during the past 10 months. Heck, I’ve only had 2 haircuts (and no colour – not even out of a box) in the last 14 months!

So yes, I want to shop. I want some new clothes, shoes and sandals for summer. I want a few things to complete my apartment. And I need a new bed (mine is 10 years old and seriously sagging). But I can’t shop yet.

It’s time for me to truly learn what it means to save before buying. I have done this for a few small purchases but nothing big yet. The $5 workout savings plan will help me save for the new clothes I want (I already have $30 saved!) and I’m still putting aside $25 per paycheque for my trip to Toronto this fall. But the “old me” wants to swipe my card and do whatever I want right now.

What’s going to stop me? Will seeing a $0 balance on my credit card statement be enough? How about watching my soon-to-be positive net worth go up and up? Or am I going to have to remind myself everyday that it’s just not worth swiping for something I don’t have the cash for?

Have any of you paid off your credit card debt? Did you then become great savers or have you ever slipped? Please share whatever you’re comfortable with.

  • I’ve never had credit card debt, but I do think seeing a $0 balance will help just about anyone. Not having credit card debt is a great feeling.

  • Hi, I too have to remind myself everyday that those bits and pieces just aren’t worth it and that in about 9 months I should hopefully have the majority of a deposit for a flat should this year go to plan. Most days I log onto blogger and read my subscribed blogs for support, help and advice so as not to shop. You’ve done really well to clear the debts, I think you probably deserve some new things- I think the key is to know where to draw the line and stay away from the shops. Best of luck!

    • Thanks, Jo! I think my book buying addiction is finally gone… and I’ve never been a huge clothes/shoe shopper… but it’s going to be hard not to buy myself a new bed (on credit)! And then all new sheets! But no… I can wait until next year…

  • Wow that is so great! You must be so excited. I always ran up my credit card during school, and would pay it off during the summer. Once that balance hit zero, it was awfully hard no to start charging again.

    The way I trained myself out of looking at my credit card as an extra source of cash was to make sure I had other money devoted to the things I wanted to put on my credit card. These days I give myself $50 a week in personal money. This can go to anything I want, books, clothes, or, most recently, a hotel room for a weekend trip a few months from now. I find if I don’t have that bit of money to play with, I start to get REALLY tempted to just charge it and worry later.

    Like I said though, it’ll take time to “train” yourself, and it’ll probably be very hard to practice self control at first, but you can do it! If you had the discipline to pay off all that debt, not accumulating more will be a piece of cake.

    • Personal money… like an allowance! Love this, Jordann. I’m giving myself an allowance next month! Thanks.

  • Cut up your card or freeze it in a block of ice! You don’t have to close the account but if it’s in your wallet, you will probably use it.

    • I already leave it at home and that helps a lot! But I know the number off by heart… that’s bad.

  • Congratulations! I had debt, paid it off then racked it up again (to a very minor degree compared to to the first time). And yes, I felt like a fool, and paid it off as quickly as i could. Now I’m really good about virtually never using my credit card and being very cautious about the way I spend money. Turns out I can be taught! :)

    The good news is that a credit card will never ever feel like another bank account, and you’ll be much more aware of the bills coming in – and the money going out.

    After all your hard work, you just need to start trusting yourself – you’re not the same person you were when you started out!

    • Aww, what a nice thing to say, Michelle! I do need to start trusting myself. Thank you for the reminder :)

  • First and foremost congratulations again! That is such an accomplishment and you should be very proud. Secondly, you spoke my fears out loud! I’ve been in debt so long and that it has become a way of life. I’m scared once I’m debt free I won’t know what to do with myself. Now, I’m looking to you for guidance so no pressure. ;) I wish I knew the answer or at least had a pointer but you’ve gone into unchartered territory that is VERY unfamiliar to me.

    In my perfect world, I believe it may all come back to setting goals. Kind of like your jar for working out. Save towards something you want and once you have enough to pay for it in cash it means you’ve earned the right to reward yourself. Wishing you the best!

  • Congrats! I’m still working on paying off my debts but this is inspiration to me. I’m so excited for you and your soon to be positive networth!

  • Was I writing this? Seriously, it’s like you’re reading my mind. I’ve paid my credit card off, and I have slipped. More than once. The most important part is that you pick yourself back up after every time you fall.

    • Totally. I’m already having moments where I think… a $500 balance isn’t to bad, is it!? And, to some, it’s probably not. But I need it at $0. Soon and forever.

  • C, that’s so exciting. We paid off our credit card (we had about $7500 on it) and just the hassle/pain of throwing as much money at the card as we could was lesson enough for us. We do use the card, but only for big-ticket items like flights, and we pay it off immediately. It does help that I have someone else to keep me accountable – J & I share checking/savings accounts so I can’t surreptitiously buy things (not that I would, anymore at least). Part of it is just me growing up and finally realizing that my “I want it NOW! I deserve it!” hissy fits are just immaturity. I am a very impatient person and I think that’s partly how I ended up with so much credit card debt. Granted, most of it was ran up in college, and looking back, I can see that I’ve definitely matured a lot since then. Immaturity + impatience = trouble.

    We still do have some debt…our car ($15K) and our student loans ($6K), but once we buy a house next year, we’re going to throw what we’ve been saving in the house fund toward our debt instead. We want to get into our first house now before the prices shoot back up. I’m anxious to finally be debt-free, though, and am really looking forward to that a few years down the road. If we throw as much money at our debt as we’ve been throwing at the house, we’ll be debt-free in just over a year! Wow. I just realized that right now. Can’t wait…maybe it will happen sooner than I thought!

    I’m so glad i stumbled across your blog. It keeps me motivated and it’s so nice to know that other people are on a similar “journey” (I just conjured up images of The Bachelor in my head).

    • A, keep remembering how amazing it felt to realize you’re only a year or so away from being debt free, and you’ll get yourself there! Honestly, that’s the only thing that keeps me going sometimes… it’s like going for a run and having the endorphins kick in… so excited for you!

  • Yay!! Don’t give in to the swipe. I want new things too, everyone does. My instant gratification comes from putting my extra cash into savings. Keep saving the $5 and you might feel differently next week.

  • We *almost* paid off our debt several years back, then had some unfortunate variables swoop down and smack us in the face. I don’t think we fell back into bad ways….we just weren’t into the swing of good ways completely yet (if that makes any sense!) We’re much better now, much more goal-oriented and disciplined.


    • Definitely makes sense! Can’t wait to prove to myself that I’m more goal-oriented and disciplined than I think I am now.

  • Once I was done paying off my cards, I made sure to never let it go up that high again. I still use it till this day but not like before. My hate for debt has stayed with me for the most part, I hope.

    • Maybe I should treat “debt” like it’s an ex-boyfriend… there’s a reason you get rid of it and you never want it to come back. :P

  • Have you thought about going to a thrift store? I live in Boston, MA right now. Whenever I want to shop, I go to one of the Goodwills around here. I usually have a list of specific items I could use for work, vacation, etc. I can satisfy the desire to shop, but I rarely spend over $50.

    • I’m not really a huge shopper for things you’d find at a thrift store but, yes, I have thought about it! Thanks for the suggestion.

  • i find listening to your struggles with debt feels awfully similar to my weight struggles. i guess its just learning everything in moderation, whether its money or food. Hang in there and one day you will have the money in the bank and wont need to save for it first.

  • Even after being excited with having a $0 balance I’ve slipped. I paid off probably around $6,000 in CC debt when I was younger and I still got myself in the same position by buying too much and saving too little. I’ve now made a conscious choice to be better and it’s doing me well for now.

  • Congratulations! You can still use your card without accumulating debt. If ever you do use it, just make sure you can afford to payoff the entire balance on or before the due date. Just pay it off each and every month. Else just use your card when you really need to.

  • That’s great news! Way to beat down your debt :) I’m lucky I’ve never had credit card debt – I’ve known other people who have & I think it scared me not to let it happen! To this day I rarely use my credit card & I always pay off the balance.
    I think you should treat yourself to a few new things – you deserve it!

    • I have lots of friends like you, Pamela! No credit card debt and I could never understand how. Guess I’m starting to understand you people now… ;)

  • I go back and forth.. seriously I even feel a little exhausted by my debt repayment right now and I’m undecided if I just want to rush it so I’m out of debt sooner and THEN go on a major shopping spree, or if I want to slow it down and let some fun back into my life right now.

    And I always flirt with consumer debt… it’s so bad, and sooo dangerous. Like right now there’s a $900 balance on my credit card and it becomes a game of “can I pay this off before the due date?”. I cut it CLOSE every month. It’s a pretty bad habit.

    • I’d suggest working away at your debt, before adding too much fun back into your life. But that’s just what helped me!

  • I think you’ve made amazing strides toward becoming debt-free and now that it’s a priority for you, you’ll be able to keep that in mind when you feel a twinge of spending-spree-itis. And you have a great support system in place! I’m also struggling with saving up enough money to buy things in cash (my computer, for example) and trying not to just go out and put the whole thing on my credit card right now and then move money from various savings accounts to pay for it.

    I think it’s a balance between having fun and enjoying your money, and saving for the various goals you have, all while watching your net worth climb. You just have to figure out what works best for you! It’ll all be ok, promise. And CONGRATULATIONS again on being $500 away from paying off that debt!

  • I just use a debit card nowadays, having gotten rid of my credit cards. If I don’t have the money to pay for something then it doesn’t get bought until I do.

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