Financial Peace- the Picture.

There are a few books that when I read them, I get fired up.  One such book is Financial Peace (Dave Ramsey).  I recommend it to anyone who has money frustrations.  This book has the potential to be life changing.  I've read it before, loved it, lived it, forgot about it, and now am reading it again, loving it again, and living it again (hopefully not forgetting it again!!!!):

Now, Dave's main thing is promoting Seven (baby) Steps to Financial Peace.  Here they are, along with how they relate to MY life currently:
1. Get $1000 in your emergency fund to take care of unforeseen and costly events (done, kindofish.  I have student loans in savings for when i student teach and can't work at the Cheese, but can use this for emergencies when/if they arise as well...)
2. Pay off all debt using the debt snowball (smallest debt first, gogogogoogo- once that's paid off, use that money to go toward the next debt..the money you're using to pay off debt should get bigger and bigger- like a snowball-- until you're debt freeish) (where I'm at...humbled...but I'm letting you into my financial world, warts and all, so it's listed below)
3. 3-6 months in savings (just in case...) (ummm, I am a student.  I hope to tackle this as soon as I snag a real job, though!)
4. Invest 15% in Roth IRAS, etc.. (In some ways I want to do this instead of #3 first, but Dave's steps hold water...so I'll stick to the plan, Jan!)
5. College Funding for Children (here's a funny story.  My Mimi actually set up a college fund for me, but my parents said if I got a tat before I was 25 they would take away my college money.  Long story short: I did, they did.  But I got grants and graduated without student loan debt [[that time]], while the Mimi money actually just hung out investing in itself until I had Seth...and my parents transferred it to him.  So Seth actually already has his college paid for.  Thanks, Jesus fish tattoo. :) )
6. Pay off house early (I rent..)
7. Build wealth and GIVE!!!  (woot woot!)

So, here's the thing.  I'm in debt and I hate it.  I HATE IT.

My financial picture looks like this::
The way the divorce shook out, I took my car-- and along with it, a lot of car debt (about 15k).  Plus I owe money for that divorce lawyer ($2500).  Then as things were rearranging, I got credit card happy and racked up almost $3000 in credit card debt (I have no excuses here- this was just poor judgement on my part).  Oh, and I'm in school now and paying for that with student loans (14k and counting..)

MOST of this stuff I can (somewhat?) justify- student loans are helping me pay for school, which will ultimately help me set up a new life for me and Seth.  The car payment was something Luke and I had while we were married, and the divorce lawyer was (I felt) necessary for me to get a divorce.  The credit card pisses me off though.  I am really annoyed at myself over that. 

So it seems sort of dismal...but it's not... because there IS good stuff in my financial picture too:

My credit score is phenomenal -- almost 800.  I can make and have made every single payment on time, and often pay more than required.  And my credit card currently carries a 0% APR, which means everything I pay toward it goes to paying off the principal balance.  My car situation was a huge headache as I had to get it refinanced out of Luke's name (divorce decree requirement)-- but here's a funny thing: NOBODY WANTS TO REFINANCE SOMEONE WHO IS A FULL-TIME STUDENT.  Not even at 8, 9, 10%!!!  Boo.  I had contacted every major finance company I could think off, but natta.  Finally, when it looked like I was just going to have to sell my car, God provided a way not only for me to keep it, but keep it at a 0% interest rate.  I tell you no lie when I say I cried over that one- forever it will humble me.  So now any money that goes toward THAT is straight principal.  And my lawyer fees.  That's 0% too.  My student loans should shift a bit this year since I'm using 2010 tax returns for my FAFSA instead of the 2009 (which were based on Luke's salary too...)-- so I should have much more in the subsidized category.
On top of all that, Seth and I are living well within our means, according to suggested income percentages.  We are never in need (or want, really...), we give money to our church and causes we care about, we have money for recreation, plus I pay almost $500/month toward paying off those debts (again, I pay over the minimum each month, so it's not THAT scary...)

With that said, I want to stress again that I don't like my debt.  So here's what's up.  I'm planning on getting out of it.  Fastish.  I actually already have my emergency fund set up (well, as explained earlier).  So onward to my debt snowball.  I've totally rearranged my budget for July (mainly groceries, which were crazy...but another post on that later...).  Here's my debt breakdown:

3000- Credit card
17500- Car + lawyer fees (15000 + 2500)

The student loans don't count yet because they're just going to keep on coming for about another year and a bit.... but when all is said and done, it'll probably look like 30k??  First things first!

My goal is to pay off my credit card debt by December.  That's 6 months.  It's a bit daunting, but I think entirely doable.  I'll let you know a little later on how I rearrange my budget and whatnot to pay more toward the debt while still being able to give, live, and continue paying the minimums on the other debt. cheers!