My Debt Blog

Answer is typically looking back in the mirror. I keep track record of my statements and I looked back, way back to some in 2003. Why in the world I bought some of this crap with a credit card is beyond me, but I’m paying for it today. Some of the things on the statement can be half justified, like books or supplies for school. I had a part time job in college making $8 an hour, but living like I was making $18 an hour. Moving forward though and getting this mess cleaned up will help though. Live always throws different things at us though.

Now I get to the interesting part. My wife and I are approaching our one year anniversary and it sort of falls into my hands on figuring out what we should do and how to finance it. She likes ’shiny things’ and we have talked about for a few months about an anniversary band. I can probably pay for about half of this but the other half would have to go on a credit card otherwise I can’t buy it. When she’s not happy, I’m not happy, yet at the same time I’m not happy about debt. My birthday is coming up here at the end of the month, she asks me what I want for my birthday, I tell her I don’t want anything, she laughs. I’d rather be debt free than pretend to own things.

Now so far this year I have made some great personal accomplishments paying for stuff. I own my stove, the furniture package for my living room, and this month her earrings. It is getting to the point where I simply don’t want anything unless I can pay for it. Back in March I got stuck in Best Buy playing Guitar Hero 2 for Xbox 360 and thought it was great. Waited until April to decide to actually buy it because I figured out that I had enough money in gift cards (I hate gift cards!) and finally a reason to use them. I love this thing too.

Maybe I am being selfish trying to budget our first anniversary. I always seem to make sure everything stays on track in the end though. It just halts paying off debt as quickly as I would like. Gears are always spinning here, trying to figure out what to do.

Comments(5)

I hear various offers and ads on how to get out of debt. There’s so many methods out there I figured I would give my analytical look at each one. Some of these I’m actually considering doing and others are not even worth my time looking further into.

Ways to get rid of credit card debt:

• Make the minimum payment each month - I was using this calculator over at Bankrate to figure out how long it would take to pay only the minimums to rid myself of credit card debt. Needless to say it would take over a decade and I would pay several times over what I actually owe present day.
• Pay off accounts from highest to lowest interest rate - If I look at the simple math, it would make sense in theory to pay less interest over a long timeline.
• Pay off accounts from lowest to highest balance - This is the “Dave Ramsey” system in a way, I read about this before so I cannot give him full credit, by paying off a small balance first and applying the payment to the next debt helps decrease principle faster which should in turn reduce and eliminate debt faster.
• Using home equity/consolidation loan - Taking the credit card debt and converting it from high interest unsecured to lower interest secured debt. Partial benefit of this is being able to use the interest paid as a tax deduction come tax time.
• Debt payment plan - Some companies out there will basically take over the credit card payments for you by paying them a lump sum every month. These services do cost you though, roughly 20% of the original debt you’re paying goes to them. Why pay someone else to make payments for you?
• Debt settlement - I hear so many offers where you can save, “up to 50% on the dollar” off your debt. The problem with these debt settlement services is you are paying them to build up a payoff in order to settle your debt. Most of the time this is done instead of just paying on the debt, which will destroy your credit. You can also handle debt settlement yourself without a need for a third party.
• Bankruptcy - Too much debt? Hit the reset button and get a clean start! Yeah right. Credit reports stay messed up for 7-10 years and it is a long struggle to re-establish credit. I think some people out there think this is some sort of safety net for their poor mistakes they made with credit.

I use a combination of some of these methods to get my debt under my control and not let it control me. As various credit card offers throwing the 0% interest come across my hands, I do consider the math in terms of if I were to transfer a balance to it I could pay pure principle on that debt and eliminate it faster. The other is to get the high interest debt into a secured loan or transfer it to one of those life of the balance cards. By converting the debt into other forms does not pay it off, but it helps motivate me to get it paid off faster and pay less interest. If I missed something by all means let me know.

Comments(4)

Getting to the bare all point here, I wanted to find out just how much I am worth? Turns out my own personal net worth is not bad. I’ll make it clear that this is my personal net worth and does not include the debt my wife has. For the sake of this blog, as I have always stated, I am focusing on my credit card debt.

Ordering of how I would like to do things:

1. Credit card debt - This debt pile has been sitting on me since college. I want to try to put as much focus into getting rid of credit card debt over the next year or two until it’s gone!
2. Offsetting student loan debt by investing - As much as paying off student loan debt faster, I think it would be wiser to offset it through investing in stocks or mutual funds. I do not see student loan debt as bad debt because the interest is tax deductible.
3. Saving emergency fund - Having a pool of money built up just incase something were to happen (i.e. job loss, disability, etc) it would be nice to have a few months living expenses available to use if needed.
4. 529 college savings plans - I will estimate by the time I get near this point in my life, I’ll be a father. College today is extremely important in order to have access to more jobs, more income, and more out of life.

This may not all necessarily happen in this order as life is never a straight road with no bumps, potholes, or speed limit. I would love to run my own business because I have that entrepreneurial spirit and dream of doing this some day. Doing the 9-5 regular W2 job gives me stability though in the sense that I know what I have coming in each month. I am trying to work out the details to get a business going on the side though, more on that later.

Comments(1)

For the amount of time this blog has been online, I wanted to see if I could find it in Google. I’m starting to get a lot more visitors from various places, just one of many personal finance blogs people I don’t know read what I have to say. At any rate, I show up on the first page at #10 when searching for ‘debt blog’.

Rather than just focus on my own blog I am constantly looking for other blogs out there that may just be getting started as well as those who are well established. My Debt Blog is only in its third month now of being online, and I think things are off to a great start. As more people frequent, for whatever reasons that may be, checking up on how I’m doing, looking for advice on something, hopefully there will be more discussion.

 Thank you for taking the time to visit and read my blog.

Comments(0)

I messed up big time for not catching this to begin with. My wife has been very busy April finishing out her last semester of her graduate program since she will be doing student teaching in the fall of this year. At any rate, she basically forgot or didn’t pay any of her credit cards. Now we have a huge problem regarding very inflated payments for May. I was upset a first about it but I understand how stressful things get at the end of a semester, but it shouldn’t justify not keeping up with other responsibilities.

This blog I setup mostly for myself, but being married of course the finances merge into one big mess. I’m a huge advocate of making sure bills are properly paid, before or on their due date, to avoid any fees or problems. By no means am I saying my wife is lazy, she messed up and it too late to fix it right now, given I just found out about this tonight. She feels that I should handle making sure her credit cards get paid on time, which I don’t mind doing because I’m the one who handles our finances. We have to take it easy this month to make up for about $300 worth of payments on top of what is normally due. I thought April was supposed to be a bad month given all of the extra expenses.

This month is going to take some extra belt tightening, on the budget and probably my actual belt because I am losing some weight. I’m not sure how many out there have had a curve ball like this just blindside you. Just as much as I want to be debt free, I share the same goals to eliminate my wife’s debt too so all the money we pay our cards with builds wealth and that we will eventually live the life we want.

Comments(1)

Today I listened to the Dave Ramsey show for the first time. As I mentioned in my prior post, Budgeting Tools I used to listen to Everyday Wealth Radio every week. This show is daily and I found it very inspirational. I like the direct, straight to the point, no sugar coated advice he gives to callers regarding their debt.

I decided to search out to see what Dave Ramsey does, and it seems his “snowball method” of debt repayment is quite popular. Instead of doing the math and looking at debt in terms of, “What is costing me the most money in interest?”, his approach is more along the lines of, “What can I easily pay off and roll that payment into the next smallest debt?”, which in theory sounds great. I think the second method only works by the simple fact of seeing what the savings would be on the lower debts would have cost you by the time the highest interest debt is paid off.

I am going to seriously consider looking at adopting this type of payoff plan, but at the same time look at ways to try to roll my high interest debt into a lower interest vehicle like a consolidation loan if possible. One thing I take pride in is that even though I have some debt, my credit is great, and I am completely current on everything. It frustrates me to just keep making payments and not feeling like I am moving forward, and I have some smaller balances on two of my accounts that I could probably push to pay off this year. I’m just glad I got my stove and furniture for my house paid off this year. A lot can happen in the 8 months remaining this year and it would be great to be in better shape next year.

Comments(3)

One of my favorite credit, loans, mortgages, debt, money shows was Everyday Wealth Radio hosted by Gerri Detweiler which has been canceled since last year in August, but the archives still exist. She sponsered the Everyday Wealth system which was online based, and I finally got mine setup earlier in February this year, but it has now closed this month. I have always relied on using my handy spreadsheet to keep a digital log of my checkbook and where the money is going. I don’t do the paper register in the checkbook thing because with debit cards it gets hard to try to write everything down. It is much easier to update my handy spreadsheet as things happen or planning for when they will happen.

I have tried to use Microsoft Money and Quicken (I know Tricia over at Blogging Away Debt loves Quicken) but I find these programs to show things after the fact. There is a lot of setup and tuning involved in making them work the way you want them to. Which makes me wonder, what about the other programs out there?

I have come across a few tools out there:

• YNAB - Short for You Need A Budget, based on the concept of living off of one month of earnings instead of paycheck to paycheck. Seems a little difficult to hold over enough money in order to pull this off, but the idea is intriguing. This is a software based solution that somewhat limits it’s use. I played with the demo of this and it takes some setup but it’s that living one month behind income that seems like a challenge.
• Mvelopes - This is an online based tool that gathers all your transactions from bank and credit accounts. From what I can tell so far, and I started looking at this recently, it is based on that old fashioned ’seperate your cash in envelopes’ idea. Instead of paper envelopes, this looks at your digital dollars via online banking (who doesn’t use online banking these days?) and compiles everything for you. They offer a 30 day trial that I might try out this month.

There is always the option of instead of trying to find a new tool, I could create something that might do what I would like it to. I do so much with Microsoft Excel spreadsheets with regards to keeping track of my checkbook, maybe I could create some sort of budget system to track things alongside. Budgets work differently for everyone and I don’t expect the system that works for me may work for you. I also highly believe that they must adapt as things change or making attempts to improve the system. Expect more to come on this topic later as I figure out what to do for this month.

Comments(4)