Next Step: Savings and Shredding Credit Cards

In continuation of the post I started earlier about our journey out of consumer debt, our next step was to establish a savings account and then agree that we would no longer add to our debt. That meant eventually shredding all the credit cards.

We opened a savings account at ING. It pays well and we're so happy there we also have an interest bearing checking account. Now, it's funny to think that Tamra and I, after not having a savings account, were not comfortable with Dave Ramsey's recommendation of $1000 in the bank as a short-term emergency fund while you get out of debt. We finally agreed on $1500 and put it in the bank. We accumlated the $1500 very quickly by selling, through Amazon Marketplace and Ebay, everything we could get our hands on. I also cancelled all are magazine subsrciptions and put the checks towards the emergency fund as well.

Once we put our $1500 in the bank, it was time to shred the credit cards. We shredded all the cards, except one at first. Tamra's first card had a picture of the University of Florida on it and she was attached to it (even though it had $0 balance because of the high rate). When we shreded the cards, except the UF card, I really never would have thought we would have had all that credit card debt paid off by February of the next year. Also, Tamra got over closing and shredding the UF card the following month!!!