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.

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This was the first three day weekend I have had so far this year. It was really nice to have this past Monday off for Memorial Day so we can remember those who have served our country so that we can live in freedom. Beer and barbeque outside in the really nice weather makes a lot of things we stress over just melt away. On top of that we even went out to the movie theater to see the new Indiana Jones movie.

I should have an update to our debt reduction effort in a few days when I crunch the numbers. While our debt didn’t go up this month, it didn’t really go down much either. The concern coming up here is my wife’s student loans payments will be starting up here soon. Since she doesn’t have a full teaching job yet we might try to defer those off because the payment on them alone would consume the income she currently brings in. This why I am eager to pay off credit cards quickly so it will free up the payments to tackle student loans. While it may seem daunting right now if we throw 1-2k a month at them, they will go away in a couple years easily.

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Recently a federal court has ruled that the US currency discriminates against the blind by through paper money. This ruling will now spur a redesign by the Treasury department. They are considering raised ink or even printing them in different sizes. The real question is why has this now become an issue?

It seems like if there’s something that could be changed, why not make the change if it improves things? Paper money has undergone many changes over time. Counterfeiters have always tried to find the flaws that would allow them to copy a bill and pass it as authentic currency. To make a change to paper money to help the blind could take years before we actually have them in circulation.

The most recent and noticeable changes to our paper bills was offsetting and enlarging the US Presidents head and adding a purple color into the design. Most bills also have the numerical value of the bill printed larger on the lower right corner on the back of the bill. These kinds of things help people with poor or low vision at least have an idea of the value a paper bill has, but currently offers no aid to blind people.

As far as solutions to this issue it’s hard to say what will happen. Paper money should probably stay paper and relatively the same size, so changes in material may be out of the question. Raised ink could be a possibility because Braille could be printed on the edge of a bill. They might have to revisit an old idea and consider printing Roman numerals in raised ink (I for 1, V for 5, X for 10, XX for 20, L for 50, and C for 100) large enough so they know the value of the bill. A lot of blind people currently fold their bills in a unique way to allow them to separate the differences between them.

I could pose the question of how much longer we will have paper money around. Technology is really taking hold and a lot of people are using debit cards instead of cash. There is a difference in spending $100 at a store on a debit card and actually putting down a crisp Benjamin Franklin. You feel more emotion from the transaction when you can feel and see the money leaving your hands. Should someone have them add glue to the ink printed on money so it’s not so easy to spend?

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I finally had my dentist appointment to have a tooth looked at that has been a major pain for some time. Part of the tooth had cracked and the fissure in it wasn’t helping things. The dentist did some testing on the tooth to check the nerve, things seemed positive. After a bit of drilling away I guess the decay was into the nerve and the news is I have to have a root canal done on the tooth. One thing that is for certain, after that is done there won’t be any more pain from it since the nerve will be gone.

Financially speaking I’m probably looking at a significant bill just for the root canal. I will more than likely wait a few months after that before having a crown put on the tooth. From what I figured out it will be at least $500 out of pocket which I will try to roll into the budget, maybe slide along with help from the EF to spread the cost over 3 months. At least my dental insurance will pick up the other half of the cost. This is the last major dental work I must have done, then all I need to worry about is cleanings. My going to the dentist lapsed quite a bit while I was gone at college, otherwise a lot of issues I’ve had over the past 3 years could have been avoided. It’s very important to go to the dentist twice a year for cleaning and inspection.

My wife on the other hand also has to have some dental work done this summer. Her wisdom teeth have been a problem for quite some time and need to be removed. I think that might be a medical procedure so we’ll have to see what our cost will be for that. When I had my wisdom teeth removed it was a really bad experience. When a blood clot doesn’t form where the tooth was, it’s called dry socket. My jaw bone was exposed to my mouth which is really painful and prone to infections. I had migraine headaches, sinus infection, and some other stuff. This is why I keep telling her to have it done this summer so she has time to recover if things are rough.

Question for my readers: Have you had any major dental work done like root canal? What was it like and did you have insurance to help pay for it?

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Over the past few months we had the rare opportunity of actually having some money in hand to get things done. Normally we could only pay a bit extra on our debt, partly due to my wife not working. When I got my bonus in March, and then our tax refund in April, we had quite a bit of money in our hands. Sure we’re in six figures worth of debt, so paying it off smallest to largest helps climb the mountain.

During March and April it was very exciting to make payments of several hundred to over 1k and pay off credit cards. When I say exciting in my head I’m thinking what else I could do with the money. Quickly, I click the button and the confirmation screen that a payment was made is a sigh of relief. We paid off 7 cards in two months, who does that?

A portion of the money was used to buy a new TV. Sure this isn’t something that was truly necessary, it was something we have been wanting for quite some time. I wasn’t willing to go increase our debt just to have something. It’s amazing to look at my living room and actually own everything. I’m trying to figure out what I can do with the old TV.

The stimulus check came this month and half of it will be held over to July for our long scheduled vacation. The remaining half has been or will be spent within the month. I had a car repair done, will need to have some dental work done, and the EF needs to be back to the 1k mark. Car insurance is another expense that is going to be looming here this summer too, so we’re preparing for that.

I cannot explain how good it feels to reduce our debt and have an EF. In the past when a problem would come along, we would throw the credit card down to make it go away. We’re still paying for those past problems and it’s important to be prepared for whatever could happen in the future.

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No not us, we’ve played that game and now we use our money. A story on CNN Money, Barely surviving by using their credit cards has really got my head hurting. This story is so biased and at no point blames consumers for their actions. Then I read this:

Government and agency statistics illustrate this troubling trend. The Federal Reserve reported Wednesday that Americans’ credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion, This spike comes despite the fact that nearly one in three banks is tightening guidelines for credit cards.

The US is near $1,000,000,000,000 dollars in credit card debt. According to the story racking up credit card debt isn’t a choice people want to make. They had to run up their credit cards because the costs of their basic needs were going up. The reason they have to use their credit cards is because their lines of credit and home equity has been used up. At no point have they acknowledged the fact that they are living beyond their income and going deeper into debt. The great expert says that they can’t increase their income, but their expenses are going up.

Why does a weak housing market all the sudden create a financial problem so people have to use their credit cards? They drained the equity they were getting out of their house to fund their frivolous lifestyle. The system of not being able to tap their house for cash like an ATM has caused them to run to their credit cards. Now their balances are increasing to the point they cannot make the minimum payment. You will never get out of a hole by digging out the bottom.

The best line was at the very end:

“A lot of people will quit going out to dinner if they see their balances rise,” Hampel said. “This will hurt the economy.”

NO!

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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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