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Subject:  Re: Newbie IRA question Date:  1/12/2005  1:58 PM
Author:  pgray007 Number:  43999 of 80423


This is my first post, and wanting to respond prompted me to pony up the $ to become a member here. While I'm still learning about retirement, I was in almost exactly the same situation as you 2 years ago and hopefully I can help you out. Hopefully this email won't sound too preachy, but I've been there, and let me tell you, it's a great feeling to get out from under that debt.

I had $26K in credit card debt, and was leasing an Audi TT. I had a "good" job with a Big 5 consultancy and thought I deserved these finer things. While I was hired to provide technical and budgetary assistance to big companies, I was managing my money like a 8 year old kid. I'd get a nice big check, buy some stuff, charge things here and there, go out to nice dinners, etc. I never really looked at where I was spending, and never really did any planning other than socking some money in my 401(k). After a couple years like this, I got to a point where one month I started going over the limit on a few cards, and could just barely make the minimum payment. I tallied up what I owed and it shocked me. I vowed to cut back but after getting out of crisis mode I was back to old habits. My pay went up, but I never really "got ahead."

Finally something snapped, I think mainly that I was considering marriage, and I didn't want to start my new life with $26K hanging over my head. At the risk of sounding like a sap in a bad soap opera or self-help commercial, the first step really is mental. Decide you're ready to fix up your finances, and then mentally take yourself out of the picture. I would play a game with myself where once a week I would pretend I was the CFO of Me, Inc., and was tallying up figures I had no personal stake in. If you look at the numbers impassionately, you can figure out a strategy, rather than doing the addition, and having some insurmountable figure like $26K owed as your bottom line.

Next, go to Costco or Staples and get Quicken or MS Money. There are always hefty rebates around tax time. Take you last month's statements, and again, acting as an impassioned observer, tally everything up. I then took a month and kept my old habits, but made sure to sit down once a week and record everything. At the end of two