My quest for eliminating bad debt has taken on monumental proportions. The other day, I slew a credit card demon with its own balance transfer checks, slicing it open and pouring the salt of indignation and post-graduation maturity deep into the wounds. It howled. I’ve found numerous sites online that offer free debt advice. The Simple Dollar is a pretty brilliant financial site, and I’ve found I consistently return to it whenever I need solid financial advice, especially concerning credit card debt, managing my credit score, or doing other responsible adult type things involving money.
There are two schools of thought on money. One can be expressed in the following simple philosophy: Always pay yourself first. What that means is that no matter what, you always cover your costs, your needs, and ultimately reward yourself financially before anybody else. Now, this doesn’t imply that you decline to pay your bills. What it means is this: If you set for yourself an earning goal of $500 per month, but you only make enough at your job to keep (or pay yourself) $200 after your bills, you must keep that $500 for yourself, and you must devise a way to earn the $300 that must go toward paying whatever bill(s) you have. In other words, you force yourself to be smart with your money and with your time.
The other school of thought is to pay off your debts first, and only after, if there’s any left over, to pay yourself. This has typically been my mode of operation, as I have a super-developed sense of “responsibility” from my parents. However, recently, I’ve been mixing up things a bit, experimenting with some methods of earning extra income so as to “pay myself first” and still pay off debts at a rate that I find satisfactory. Part of the changes on the blog of late are due to me trying to discover a passive line of income that might help me win in the battle against bad debt, and perhaps even provide me with a income that I could live off of. While that’s pretty far down the road, I’m already seeing some things that are working and some things that aren’t. It’s nice to be able to experiment without too much overhead or consequences.
Ultimately, the debt elimination project is about dedication to a principle and perserverence to a plan, flexibility in execution, and savvy financial decision-making.