One thing that he points out, and quite correctly, is that there is a greater psychological feeling of loss when you put down that $20 dollar bill on the counter; however, that feeling of loss is less when you slap down the plastic [whether it is a debit or credit card]. This tends to result in an average 18% increase in spending. Top that off with the fact that you are paying about 18% [average] on that credit card and all of a sudden those cards aren’t that good of a deal. As for your question of closing out my credit lines, I did that years ago and have been much happier for that. I did a little happy dance when I sent off the last payment [about 4 months ago] to the last credit card because I knew that never again would I ever have to look at one of their letters or talk to one of their collection agents.
As for Nancy’s point about breaking up baby-step #3 into smaller more manageable sub-baby steps I think is a good one. Take it in manageable chunks, and then treat yourself to a luxury item when you get there. Now I don’t think I drive in the country or an inexpensive desert will be much of a motivating factor; however, a good, but relatively inexpensive, dinner at a nice restaurant – just you and your spouse [get a babysitter for the kids] after each sub-baby step will be an excellent motivating factor. Also, don’t deprive yourself of the small luxuries while you are tackling each sub-baby step. I’ve heard many people testify that the thing that kept them going through the first three baby-steps was the fact that they didn’t deprive themselves of the small luxuries. Cut back, yes, but not totally eliminating them will make the steps easier. Go on a date with your spouse at least once every week or two. Buy yourself the occasional book at your favorite book store. If you treat yourself, in moderation of course, you will find that the baby steps are much easier to accomplish.
In mine and my DW’s budget, we have first and foremost our 10% of net income coming out for the support of our Church and other Christian ministries [every single person I know who gave their 10% – the first fruits of their income – to God whether they could afford it or not are in better shape financially then we are now; I can’t help but to believe – after all, I’ve seen it – that God honors the gift and fulfills his promise to return it to you “pressed down and shaken together”]; we then pay our basic living expenses [rent, food, transportation, utilities], my student loans, then we give ourselves $10/wk each to blow on whatever we want, and $20 a week for entertainment, that leaves us left over $150/month to put on whatever baby-step we are currently on. We are tackling it little by little, enjoying life, and don’t feel deprived at all of the things we enjoy.