My Debt Blog

Today is my birthday and normally I am excited because another year has gone by and I’m that much closer to something happening. What is supposed to happen at 26 though? Last year I was excited about my birthday because I saved money on my car insurance (not by switching to Geico). It is kind of a down feeling that I am getting older and closer to 30 and still have so much debt hanging around. It would be nice to have all this debt paid off before I am 30, but I don’t think my wife would be up for it.

Just for fun though here’s the math on how much dedication it would take to pay off $151k worth of debt. We would have to pay somewhere in the vicinity of $3200 a month towards debt alone for 4 years. Instead, a more realistic goal would be to get down to 5 figures in the 4 years. That would average around $1000 a month in payments on debt, which we could do with focus. I am not figuring in salary increase, bonus, tax refunds, or anything extra so at some point we could increase 1k to 3k along the way.

Debt freedom is a distant dream right now for us. These credit cards and student loans got us right where we are, deep in debt. It is very nice to pay off a credit card and know it will never impact my life again. Avoiding the use of credit and having no debt will allow us to live much better than we can now.

Comments(11)

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.

Comments(3)

I haven’t posted in awhile because it’s been a busy time as December comes in. At work there are projects that have to get done before I am on vacation. At home there are all kinds of things going on like putting up the lights on the house and setting up the tree. It’s a lot of work to go to all this trouble when the stuff is only used for one month in the year (at least for most people). Then the ultimate question comes in, how much are we spending for Christmas?

Did we put money aside to prepare for Christmas? No.
Do we have a budget for Christmas? No.

It is hard to figure out how much Christmas needs to cost, but right now it is at least $1k. As I have said in the past, my wife wants a Coach purse so that’s what ended up happening. Turns out you can’t have a Coach purse without the matching wallet to go with it. Grand total for all of this was $700 and yes it went on a credit card. So much for paying down the credit card debt this year, a lot of progress is lost.

I’m not sure why I let things go on the way they do. Why do I even have a blog about trying to pay debt when it’s become this up and down rollercoaster of a mess? I don’t want to shut down the blog though, it is there for my own personal use but I’m open to comments. Christmas has become a holiday that I dread when it comes because of how bombarded we are by it every year. In October before Halloween even came, Christmas stuff started to be available in the stores. I’m just overwhelmed when it comes to trying to figure out what this year is going to cost us and how we’re going to pay the bills. The EF is going to probably be drained empty this time because I cannot figure out how to things.

Starting out January next year will be a challenge to rebuild the EF back to 1k. On a positive note my wife will be done with school and actually bringing in some real income once again. I hope she gets a job that pays much better than anything she has had previously because an income boost would really help us clean up the mess. Otherwise I am going to take more drastic means when it comes to handling our money.

Currently we share one checking account which all the money goes in and all the money comes out. If we do not figure out a good system using our income together, we’re going to have separate checking accounts and the household account we both contribute to for the mortgage and bills. I really don’t want things to come to that because I want to work together with money but things are going in different directions. I don’t think income is the problem, it’s the spending we have different viewpoints. These are the things I’m pondering lately and don’t know what will happen.

Comments(26)

Don’t be misled by the title, I am current on all my credit card accounts. I also encourage paying beyond the minimum payment on credit cards, of course focusing more effort on the one you want to rid your life of faster. Last night I was crunching the numbers on some of my cards and noticed differences in the balances based on the day I made a payment to the account. This gave me an idea on how to save a little extra each month.

If you carry a balance on a credit card, you’re going to pay interest at the APR of that card. When you make a payment before or on the due date, the balance on the card is less than it was before you made the payment. I usually just make payments at regular points in the month because that’s the system that I structured. This usually means I make a payment to an account a little before the actual due date. I realized I have been focusing on the wrong date.

Every time a bill is generated with all of the previous month’s details, it has a billing date, minimum payment amount, and a due date. Instead of focusing on making sure I make a payment before that due date, I should be making a payment on the billing date to lower that balance as soon as the bill is generated. This would save about 30 days of interest every month. Although it is not much of a difference it would add up in the long run.

So I’m calling all my credit card companies and trying to get some dates shifted around for me so that the billing date is at the date I make payments to the accounts. This will also take some careful planning because I’ll probably have to make two payments within one month in order to pull this off and stay in front of them.

I’m still working on the 0% balance transfer card and thinking about transferring balances from two cards over to that, so I can pay both off at once at 0% interest in 12 months. I’m going to probably transfer $1800 even so that 12 payments of $150 will eliminate that debt once and for all. Transferring credit card debt does not pay it off, it just moves to a place that makes it easier to pay it faster. Hopefully I will have an update on how this is going at the end of the month.

Comments(6)

Back in July I had came across a show called Secret Lives of Women: Shopaholic and found it very interesting. There was not a future episode of this coming up any time soon. This weekend I happen to come across this show and on Tuesday, November 6th at noon (Central time) on WE this particular episode will be on again. So if you’re curious about the three women and their spending habits, be sure to catch or record this show.

I want my wife to watch this too without being too obvious about it. The whole point of this particular episode is that these women spend money they don’t have. Some resort to going deeply into credit card debt to continue the habit. Its sad how quickly some people consider bankruptcy to get out of the mess they created. My wife once thought bankruptcy was a credit reset button until I explained that her student loan debt not even considered and must be paid at some point. That put an end to that idea quickly.

When my wife is done with school here in December, the whole college thing will be behind us. I have no desire to go back to school right now mainly because I want to clear the debt first. Her student loans are on deferment right now and I am concerned as to what the payments will be come July next year. We may try to sell the house again in the spring depending on how the market is trending. That is all stuff to worry about next year though. Christmas is coming soon.

Comments(2)

My wife has been doing her student teaching this week and trying to get the whole teacher role down. At any rate, she stayed after school for awhile yesterday to go over plans of what she will be doing for the semester. She is only obligated to be a student teacher for the fall semester and then she is done in December. After that it’s time for her to start finding a job.

This is where it gets interesting. Apparently a science teacher in the same group as the teacher my wife is student teaching under will be going on maternity leave. They are going to need someone to put in their place and my wife has a biology degree already and will have her education masters completed in December. From what she told me it sounds like they want to transition her right into a teaching role as a science teacher when she is done. I’m trying not to get too excited or jump to conclusions about this, but I think this is a very positive thing.

What was funny was I held back my reaction as best I could. My response was along the lines of that I felt that sounds like a good opening. Then she comes out with a compromising statement that if we did stay in our house longer, she would like to replace our kitchen/foyer flooring with linoleum. I estimate the cost of this to be about $500-700 which I would be willing to commit to in the event we hold off selling the house for awhile. This type of stuff my Dad and I could install, as we have done before.

She went downtown this past weekend to go shopping with her friends, which is good because I think she needed some social time with other females. At the same time her friend takes the taxi to places because parking is expensive. Apartments in the area we can afford to live are much smaller and everything much more crowded. I’m not sure if she wants to live close to her friends and the city based only on the idea of making more money when things will cost more overall.

We still have to make it through these next couple months on a tight budget. This is going to be a real challenge to be able to swing all of our expenses and still be able to do anything. What is going to be difficult is not going out to eat and forcing us to eat at home. We need to make it through these final months of her finishing school without an income. If this job is waiting for her when she is done, I think that is her finish line she needs to cross.

Comments(0)

I have been pretty upset with my wife since last night. She is going to be student teaching soon and has some time off until the school year starts. This week she has gone out shopping for clothes and setting things up for school every day. Our ‘budget’ has some room for her to be able to spend some money on clothes, but what happens when it’s gone? That is where the fighting started.

She came home with a few more bags then I had expected. At first I brushed it off because I just didn’t want to know what she spent on all this stuff. Later that night she modeled the various things she bought and I tried to keep my cool. Then the ultimate question came up: how much did all this cost? She told me not to worry about it which confused me at first, then she told me she opened a new credit card and charged about $250 on it. It feels every effort I make to pay off debt is shifted into a new debt.

This is when it got interesting because she told me that when she is done with student teaching and gets her job, she wants her own checking account to handle her money. I told her it is a good thing I’m not that selfish with my income in that I consider it both of ours since it pays the mortgage, bills, and general cost of living. It’s not like this stuff is invisible either because I show her the exact amounts of what all this stuff costs and the extra at the bottom is the only wiggle room we have. Its not that we don’t have enough money, there’s just not enough extra for her anymore.

It always seems like a simple solution is when there isn’t enough money for lifestyle, instead of cutting lifestyle for a period of time, try to make more money so the standard of living doesn’t change. We are effectively going nowhere quickly because any progress is balanced out by overspending. I’m also being compared to our friend who is in the banking industry and recently was promoted to a VP at the age of 25 (same age as me) and got a huge pay increase from his already large salary, which I’m not sure what to think about that. My wife wants me to keep pushing for promotions and pay increases and my response is always the same, it all takes time. It is starting to depress me when I’m trying so hard to make our lives better and she only sees success as job title and salary. She still doesn’t know for sure if teaching is what she wants to do for a career. I don’t know what to do anymore but things are really ugly right now.

Comments(7)