Awhile ago, I posted about how money made me nervous.

I set a few financial goals for Alex and I that I was hoping to have accomplished by the end of this year. I thought I would update how we’re doing on those goals and talk about a few other finance-related things.

>>>> The top goal was to be debt free by 2013. I included student loan debt in with that, but I was mostly thinking about credit card debt. At the time, we had about $5,000 in credit card debt and about $16,000 in student loans.

I started tackling the debt in February and now, in October, we are credit card debt free! We have been free of credit card debt since August and it’s been wonderful.

The student loans went into forbearance since I am currently enrolled as a grad student. However, they continue to accumulate interest. Last month I made an interest payment toward them, but apart from that the balance is still the same as it was in February unfortunately. That’s okay, though.

I don’t foresee paying them off by the end of the year, but I hope to at least put a small dent in them – $500.00 is what I’m hoping to reduce them by. In 2013, I’ll focus more on paying them off completely so we can be totally debt free.

So, how did I pay off our credit cards in 8 months? I took our savings and applied it to the largest balance. That was a tough choice but it was a good one. Savings sitting in an account, doing nothing, is wasteful when you have debt, in my opinion. With the debt gone, I can truly start working on saving money, because any money we actually save will be able to be used toward something we want to use it on, instead of using it to chip away at debt.

Once the savings was applied, I looked at each of my cards and what their minimum payment was as well as which card had the highest balance. I began paying off the card with the highest balance first – the payment I applied was the total of all of the minimum payments from each card – and I paid the minimums on the remaining cards. Once that card was paid off, I moved onto the card with the next highest balance. Before we knew it, the debt was gone.

This wasn’t an easy process. We had to make a few sacrifices but it was all temporary. Sometimes you just have to do what you need to do in order to get to a better place. It’s all worth it!

However, the story does not end there. Last month, each week I picked a creditor to call and asked to lower my interest rate on the card (since the balance was paid in full) and if I could get a credit increase. Since I had been carrying high balances for so long, my spending power had been drastically reduced on a couple of my cards. Over the months, I had proved my creditworthiness by being more responsible with the cards. I wanted credit increases to make it look like, on my credit report, that I was a trustworthy credit card holder…because that will help me and Alex whenever we look into making larger purchases like a house or a car.

Together, all of these things had the huge bonus of boosting my credit score majorly. And that was my ultimate goal for 2012 – to repair my credit. I’m definitely on my way there.

>>>> The second goal was to pay cash for everything. We do this to a certain extent, but not as much as I’d like. When I set this goal, I envisioned withdrawing money each week to cover basic expenses. So far, all I’ve done is withdraw money to cover groceries. I guess that is a start though. And, it keeps me in check while at the store because I only have enough to cover a certain amount so I have to stick with the list.

I’d like to add onto this cash for Alex and I both to use throughout the week for whatever we want to use it on. My hopes is that this will curb my spontaneous spending while out with Ezra – a coffee here, a book there, an outfit for Ezra, etc…

>>>> The third goal was to rebuild our savings account. As I mentioned above, I used savings to pay off a chunk of our credit card debt. Since then, I have managed to save enough to get us right back to where we were when I used it to pay off debt plus a little extra. My goal was to save $8,000 and I seriously don’t see that happen by the end of the year. So instead I’m just going to make it a goal to double what we have, which will put us around $4,000, give or take.

>>>> The last goal was to learn what a Roth IRA and 401(k) are. I’m sorry to say that I have totally neglected this goal. I still have no idea what these accounts are or what to do with them. But that’s okay, one thing at a time, right? And plus there is still time left this year to work on this goal!

So that’s where I’m at. Wish me luck these last three months that I can finish out the year strong!