My Debt Blog

Finally after months of waiting, weeks of speculation, and days of checking our account, the 2008 Economic Stimulus check finally showed up in our account this morning. I know other PF bloggers out there have been waiting on theirs too, so if you haven’t got it yet hold tight.

We received a flat payment of $1200. Half of this will go to our vacation, the $300 that was taken from the EF to fix my car is going back, and we will work $300 into our budget to help us tackle some debt. The government of course wants us to go out and spend it, but we recently purchased an HDTV so I think we already have done our part. This money is nice to receive but is not necessary to our economic stability by no means. I’m glad we didn’t spend this money on something before we received it, because it may have never came.

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It seems every time I turn on the news, look at a paper, or check a news website, recession comes up more frequently than anything else. By definition a recession is two consecutive quarters of negative GDP, which hasn’t happened yet. We could be in one right now, but I’m not going to go as far as labeling it yet. So if we’re not in a recession, what are we experiencing? It’s a simple slowdown of the economy as a result of some very major blows to some markets.

What makes it even worse is the rate of inflation that we do feel. Most people have a relatively fixed income, same thing from month to month. When the basic expenses like food and gas are going up, the average individual will feel that more than the overall effect of a recession. In my opinion the greater threat to a slow economy is inflation, not recession.

So what can we do to try to reduce expenses. Here’s what we’re currently doing:

1. Gas - We have been carpooling to get to work which saves a few fillups per month.
2. Heating/Cooling - Now that the weather is starting to come back, we will have some time where we won’t need to use the heat or AC.
3. Food - Eating out less and bringing lunch from home really helps save money.
4. Entertainment - Finding the cheap or free things is great. We go to wine tasting on Saturday afternoons and experience the finer things for an hour at no cost!
5. Work Out - We’re going back to the gym again and getting in shape. Even though there’s a membership for this, the benefit is longer life span and reduced medical costs.

We’re also able to reduce monthly expenses by paying off credit cards. If everything goes as planned we’ll be down to only 2 cards each, around 14k remaining in credit card debt combined. I would like to get that number under 10k before the end of the year. To accomplish this it would take $500 a month for 8 months to wipe out 4k. I plan to work on the blog to get some more debt meters and where we stand on getting things paid off.

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Even without having the blog around, I’ve still been working on paying off debt. I always look forward to March in that I get a bonus from my job. Years past the bonus would go to things that we probably didn’t need or just spent without thinking about it. This year was different though because my wife is on board with the idea.

So what all did we get paid off, it’s hard to really figure it out. Here’s what I do know:

• Victoria Secret $609.90
• EXPRESS $581.13
• 53 Card $419.61
• Universal $417.24
• Zales $813.76
• Jared $137.23

These six cards alone have a grand total of $2978.87 paid off! In addition to these payments, the regular monthly payments still bring down the debt even further but I don’t know exactly by how much yet. We also put $1000 into the EF to get that back to a reasonable level to have on hand if necessary.

The month of March we paid off quite a bit of debt with my bonus, but the month of April we’re getting a tax refund, and the month of May we’ll receive the stimulus payment. This leaves a potential to pay off a lot of credit card debt and get us down to only two cards each. We’re also planning a vacation this summer and debating getting a HDTV. These things have to be planned first though and of course avoiding going into more debt. More on that later.

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I never like getting to January in that the damage from Christmas is actually felt this month. It has been a difficult month to get through on one income on top of that. With no EF or additional income, it is getting increasingly difficult to keep focus. As the pressure or weight of carrying everything gets to me, it gets harder to keep going. I’m to that paycheck to paycheck point and there is nothing to show for it.

So if January was bad, how does February get better? We need to pay close attention how much is coming in, and what needs to go out. My wife will also be setup to help with our household income, even though it won’t be permanent yet. Spending is the single most important issue that needs to be watched very closely.

Getting through February is important because I’m patiently waiting on my bonus. The bonus does not necessarily fix problems, but it will help turn things in a much more positive direction. I can’t post details yet because it isn’t in hand yet. Priority before paying down debt is to get that EF back to 1k though.

Expect my regular monthly plastic pinch update and my net worth update. I might as well point out that debt is going up and net worth is going way down, partly due to the huge hit I’m taking on my retirement savings. Even though it is only Monday, I cannot wait until Friday comes around.

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I’m actually glad it’s a Monday for a change. Friday is payday and we have no money until then. Right now I’m the sole breadwinner between my wife and me. The student teaching she did for no money was rough and we had to get through that. I never really liked or understood why they cannot pay student teachers since they’re still doing a job. Now she’s done with that and graduated.

We’re half way through the month and I am a little concerned that nothing has happened yet. She puts in applications into places and then has to go get tests done, background check, and a lot of run around. Why wasn’t she informed about the process before now I have no idea? At the same time, no job and no income either.

I’m frustrated about how we’re going about spending money now. There’s only so much money for the month, and the normal household expenses usually stay consistent. Last month we spent way more than what came in, along with the car insurance bill. Now is the time to really assess what we’re spending money on. When we were in the grocery store the other day, I was adding in my head what we were getting. My wife doesn’t always think about the cost of things, so when I reminded her we only have so much in the account, she got upset. I’m doing my best here trying to keep things together, but at times I feel like she could be doing more.

There have been plenty of comments in the past that we’re never going to get anywhere unless we’re on the same page. I agree with that, which is why I’ve stopped trying to pay off debt for now. There is no point in my efforts unless my wife also believes in the cause. I just want to focus on the necessary expenses right now. When the bills come in I track their balances and payments due. It will take a long time to clear the balances when we only pay the minimum required monthly payment. This is where those DMP and credit counseling programs catch her attention. I don’t like resorting to something like that, but the idea of those is you pay one monthly payment and they distribute it between the creditors involved. There’s a specific chart and a roadmap of how long it will take to be debt free. It would be great to get rid of credit cards, but I don’t think we need a program to do this.

I also brought up the sour subject of student loan debt. These loans can’t go anywhere quickly when we are still working on our credit card debt. Getting rid of credit card debt is more important than paying off student loans. It just takes time and sacrifice to dedicate the income towards the cause. I only have so much control over money, and that’s not saying much.

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Thanksgiving is that time of year we’re supposed to be give thanks for the things we take for granted. This is not the case with major retailers given that they make 25-50% of their annual profits in the 40 days between holidays. Not that I wanted to go, my wife and I got caught up in the Black Friday mess.

I noticed a lot of stuff, even on sale, wasn’t that great of a deal considering I have seen the same prices weeks before. So what makes it about Black Friday that gives people permission to spend money? My wife actually didn’t spend that much money and meanwhile I got my mom the doorbuster Mickey Mouse snow globe at JCPenny. So we’re still in the black for now.

December is going to be another story. Just as the issue came up in June, our semi-annual car insurance bill is coming due. An added bonus though my wife’s insurance will be discounted more so we will save over $100 bucks this time around. It will still take some money though to cover our insurance bill so we’re covered the New Year. I’m not sure how we’re going to do both Christmas and car insurance in the same month. My wife starts to look at that emergency fund as though it is regular savings for this time of year. It almost sounds like she thinks we should go into the New Year with no EF.

At the same time along with Christmas is my wife’s birthday. She already told me she wants a Coach purse for Christmas and the matching wallet for her birthday. I’m at a loss here when it comes to figuring out how to cash flow a $300-400 gift. Getting out of debt isn’t a priority to her this year and I don’t know if it will be next year. Sometimes I just want to stop trying anymore because I’m not getting anywhere. Is all the effort on my part really worth it?

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I’m not sure what it is with relationships and money, there is never enough of one or the other. It seems for us when money is there our relationship is good, but as the money runs low or out for the month, it leads to problems and not talking. Why does money have so much power in a relationship?

I think there is a difference between poor and broke. My wife feels that when we run low or out of money we’re not doing any better than poor people. This bothers me big time because I define poor people as lazy and lack the ability to make money. There is a difference in poor and broke, and broke is temporary. We don’t really have a budget or spending plan as some people call them, so after the important bills and such are paid the remaining is used for the day to day. Eating out and clothing seem to be trending as our largest monthly expenses. I’m also finding it highly frustrating that I make a large amount of effort to stay on top of the money.

A friend of mine actually suggested to stop doing everything and let her take it over. I could do this but I cannot say that I would put it out of mind and would be keeping tabs that everything got properly paid for the month. The last thing I need is a bunch of people calling us because they show we did not pay a bill. What I really want to do is for us to work together when it comes to paying the bills and staying on top of the money. She can see what comes in and what goes out, and what little is left if any.

My wife suggested doing separate checking accounts which would split the money to my money and her money, no longer our money. I don’t agree with this because the common household expenses and bills would have to be split based on the income levels between us to make it fair. This almost reduces us to a roommate status living in the house together. The other things like taxes would also be separate on top of that. I am avoiding doing this like the plague.

I’ve taken on a lot more work lately and could very well possible be getting promoted which also comes with a pay increase. It would be nice to utilize extra pay and bonuses wisely in order to pay off debt faster. The problem that always comes up with lump sums of money is my wife almost mentally spends it before it hits the bank. I don’t seem to have much of any control over the extra money, which bothers me. Obviously this cannot continue because it isn’t working for either of us.

Please don’t bother mentioning marriage counseling because it is very expensive for a Dr. Phil to tell us we have a communication problem. I am fully aware of the problem it is more how we can solve it and work together. It’s difficult to keep putting myself on the line wanting to work with her, and she just tells me to keep doing what we’re doing. For the next month I would like us to do a spending activity where we will track every cent we spend every day for a month and identifying if it is a need or a want. At the end of the month we will see what is happening with the spending patterns. I would like to develop a spending plan or budget that we could actually follow, but it hard to solve the problem unless there is evidence of a problem.

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