I remember what it was like to be 21 and not have a single care in the world. I would spend money as fast as I would make it and there wasn’t a single thing that could A) stop me and B) make me care about my finances.
But I’m not 21 anymore. I am 24 now and am about to turn 25. Somewhere in the middle, I opened up more credit cards than I could keep track of, racked up enough debt to make me ashamed of my personal finance situation, and thought it was better for me to show off how ~financially stable~ I was by buying designer purses and having more clothes than I need.
Being 24 and in a long-term stable relationship, I am about to embark on a new adventure after I graduate college in May. My partner and I will be moving to Santa Cruz where his family lives, but this means that I will have to purchase a new car (because my 2000 civic just can’t hang) and we will need to lease a new place for us to live. This is difficult because I am 24 with a terrible credit score. (It’s 605-610, last I checked.) My personal finances were something I tried to actively avoid until I couldn’t anymore and now my credit score matters and now has a direct influence on my life. Like it’s not an obscure idea that the grown ups would talk about in the background. This is the real deal.
My partner’s mother recently sent us Dave Ramsey’s Financial Peace University Revisited book. (I read it when I was 18, but didn’t take anything I read about personal finances seriously.) I thought that if I made my financial situation public, I would hold myself accountable and be able to keep a report on how it improves. As I mentioned in previous posts, I am a bartender and operate in mostly cash. So I deposited my tips recently and have begun to pay off my credit cards one by one. (I tried to make the monthly payments, since I have cash. But that didn’t quite work out as well as I had hoped. The snowball method that I attempted is suggested by Dave Ramsey, but would have taken more than year to pay off all of my credit cards.)
So since I have the cash in hand and more than enough to pay off my cards, I am going to pay off all of my cards except for two and keep them all open so I have more credit available than credit used. Then I’ll only use the two that have balances for food and gas and continuously make payments larger than the minimum payment required. Though I think the snowball method is a great idea, it wasn’t idea for someone like me that had 5+ cards open with balances. So hopefully this will help ease my financial situation and help me prepare for my move from Los Angeles to Santa Cruz.