First, to help set the stage for why I think doing this Financial Peace thing, read this day-by-day strip, g’head, I’ll wait.

back?  good.

I don’t want to know how much of our money each month goes to interest.  Not just mortgage interest, but credit card interest.  My lord, I think we could probably fund all of our children’s college through that Harvard Master’s they’re all gonna want if we just sunk what we pay in interest each month in the mattress.  Simply because we went pure and simple daffy crazy in 2005.  Sure we had a family vacation to end all family vacations, but we also refinanced/consolidated our credit card debt, then went and doubled if not trebled the credit debt we had.  *shakes head*

Seriously, our behavior reminds me of the movie Tin Cup, when in the final day of the US Open, tied, and needing a birdie to possible win, a safe par will force a playoff, Roy McAvoy goes for the green on a long par 4.  He hits it, only to have his ball roll back into the water hazard.  (we hit it, we had a plan to be credit card debt free like right then, but then rolled into some ‘necessities’)  He then proceeds to whale away at the pin from 300+ yards, when a drop and a pitch would have still put him in the playoff.  While he descends into pure selfish madness, threatening even his qualification for the following years tournament, the announcer says, “Someone tackle that guy!”

srsly.

There are a couple of slides in the FPU videos that bring this home, one is how much you’d accrue in wealth if you socked anything away at 18% interest.  I took the bait and admitted that saving anything at 18% interest is pretty much impossible to sustain, unless you invest in some pretty risky ventures and end up guessing right, and impossible to sustain for the long term.  Except that, as Dave Ramsey explained, that is pretty much the investment that banks make all the time, though they aren’t investing in a company, but in their own marketing of credit card debt to the public.  Think of how much interest you pay on your lowest interest card.  Then look at your savings, and consider if you had done the whole ‘save first, pay cash’ thing, how much larger that savings line could be.

So while we have made our zero based budget, and allotted for a $1000 emergency fund, and giving again (something we haven’t done during our descent into madness) to our church.  The line I’d like to keep track of, is what our monthly outlay to the interest line is, and watch that value decrease to zero over the next 2-3 years.  That should help us keep on track, I think, I hope.