Friday, August 16, 2013
Milestone Reached: 80% Debt
When I graduated high school and was first in the driver seat of my own financial situation, I figured debt was always just a fact of life and we all had to learn to deal with it. I understood the general rule of 'spend less than you make and you'll be okay.' But emergencies always popped up and I didn't understand how to let my money work for me. This was the basic formula behind my financial disaster.
During 2010, I found myself drowning in a financial mess. Debt was always piling up, and in fact maxed out by the end of the year. I knew something had to change and fast. After doing some research online to help me, I discovered Dave Ramsey and began listening to his show and reading his work, I was fascinated and instantly hooked. As part of a New Year's resolution, I wanted to begin tracking my finances closer (to the penny in fact!) at least every month, to make sure I was going in the right direction.
In January 2011 I had a net-worth of $-531.06. At first I couldn't believe it! But after looking at the big debt figures and the smaller asset figures, it all began to make sense. Every month since then I have been tracking my finances and have never given up on that resolution!
I just updated "My Big Financial Picture" page and found the current debt level was below 80% of my original peak debt levels. This is great news! Since January 2011, I have gotten rid of over 20% of my debt! And let me tell you, it feels great.
Without the power of compounding, I should be debt-free about 10 years from now. Being in my mid-30s, I would still have plenty of time to build my assets and continue working if I want. I stress the "want" part because once I'm completely debt-free, I will have 3 rental houses (paid for) that will more than cover my expenses.