Personal Finance 101

A small passion of mine is managing our personal finances.  I did not happen upone this obsession like I did the rest of them.  My story, I imagine, is like many others.  After many years of overdraft charges and thinking to myself at tax time, "I made that much money?  Where on earth did all of it go?", something finally snapped.  So, for the past couple of years I have managed every cent with Quicken.  I love it.  I can print reports that detail every single time we went out to eat, produce graphs of utility bills, see how gas prices influence out fuel expenditures and more.

Some people keep lots of secrets about their finances, but they are what they are.  I can state ours boldly with little threat of enticing identity thieves, that is for sure.  We are currently in debt to the tune of about a quarter of a million.  If we were not in so much control of our money this figure would terrify me.  But, thanks (and no thanks; I'll explain later) to John Commuta and some intense spreadsheets, I know we can be TOTALLY debt free in 11.3 years with "just the money we already make".  This is great news, especially since we plan on making more eventually!

The one way John steered us wrong is in prioritizing which debts to pay first.  According to Commuta (and Dave Ramsey I hear), you are to pay off smallest balances first thus increasing your "accelerator margin" or "debt snowball" fastest.  I spent half an evening playing out both scenarios and proved that focusing on the highest interest rate first is in fact the best strategy.  I shouldn't be surprised.

Anyway, there is really nothing to say about our plan beyond what is written a thousand other places.  All I know is that I am excited and we are determined and I know that you can do it too!