Thursday, April 12, 2012

Nasty Numbers

I have mentioned before that we are required to do a financial disclosure for G-man's job once a year.  (One of these days I will do it as we go instead of having to go back and look at stuff....wait....I am doing that for this year!  Yea me!).

This packet is a PITA.  The basics of it are starting and ending balances of ALL accounts (CC, mortgage, car, investments, banking); how much we paid over the year, large purchases (like the car).  This year is particularly a PITA because we have the refinance of the house, paying off G-man's car, purchasing my car.  All of this has to be documented.

I started working on it last night (it is due in mid-May), and it wasn't pretty.  I knew it wouldn't be....but it REALLY wasn't pretty.  By going through 12 months of statements I discovered 
  • We paid $13,814.84 on our credit cards combined.
  • We paid $5,105.16 towards Lending Club.

This is a total of $18,920.  This number includes interest we occurred, payment towards purchases (including car repairs, PTA stuff I fronted and was reimbursed for, and any other purchases).  This does NOT include the balance transfer we made, which just rearranged the money.

But the truly sick part....
  • Overall starting balance for those 5 accounts - $34,634.94
  • Overall ending balance for those 5 accounts - $36,408.94
That is an increase of $1,774.  We paid almost 19 THOUSAND dollars, and increased the debt load.  What this means is that we paid off everything we used the cards for, minus the $1,774.

To those who want to be a hater and tell me how little progress we made...go right ahead.  This is not an open invitation to bash me....just that I am not in the mood to fight today, so say what you will.  I am not going to argue with you about it.  I will agree that the numbers will support your argument, but the numbers don't tell the whole story, and you know it.

I am so looking forward to hitting the reset button soon.  I need to put 2011 behind me for good. 


  1. No hate from me, I do the same thing, use the card and pay it but the balance stays the same... learn from the mistakes and try to move on?


  2. I think yesterday we talked about how you just refinanced the debt. But really, that's not true - you did pay the debt off (or you are about to) with your own money. The 401K money is your own money. I don't think people can borrow 401K funds that are not vested yet, so I assume vesting is not an issue and the money is actually yours (I mean your husband's, but I'm using "yours" as in a marital asset sense) so in reality, you aren't truly indebted anymore once you pay those cards off.

    I'm well aware that the 401K company sets it up so that you pay it back, and if you should leave the employer, the amount is due or you pay fees and taxes, but that's not the same as owing a bank or any other institution money. 401K loans are loans from yourself to yourself. You're simply borrowing from an asset. The reason that fees and taxes are attached to any early withdrawal (or failure to replenish) the funds is that 401Ks get special tax treatment and they're designed to be kept in place until a certain age, blah blah blah. Those penalties are meant to prevent people from using the funds before retirement (outside of certain special circumstances) and from double-dipping, tax-advantage-wise. But in essence, it really is your money that you're drawing from to pay off your debts.

    So from a net worth standpoint, you made a lateral move, but at least you're not in hock to any bank or credit card company anymore. It would seem worth it to reduce the investments, especially if the total is sizeable, in order to get out from under consumer debt. I think you made a good move and now all you have to do is fine-tune your budget going forward to avoid sliding back into more debt than you are at the moment (or rather, the moment that you pay off the five debts) while building up your assets (via replenishment - as I think is the more accurate term rather than "repayment") of the 401K and hopefully other asset-building as well.

  3. Honey - we are or have been in the same boat. But look at it this way you did not add that much additional debt. Not pretty but you are working on it. Things will get better. Hang in there. Do Not Be Too Hard On Yourself.

  4. Ugh! I SO get where you're coming from. I've been (theoretically) paying down my debt for the past five years but to look at the numbers, it's hard to see much progress at all.

    The thing is, if you HAD NOT been paying attention and paying debt off, you would not only owe the additional $1700+, you would still owe the original $19,000+ as well.

    If we didn't have kids, cars that break down, houses that need repair, etc. we could all have paid down our debts a whole lot faster. Life keeps getting in the way.

  5. Mysti, I have been in your shoes over and over. Remember last year over $24,000 went out to unplanned expenses? Then I bought a much needed car. I wiped out any progress I had made and I had made a lot of progress. Keep doing what you are doing you will tip to the other side. Trust me.

  6. That's got to be really hard to see, but, the good thing about the 401K loan is that you have a set payoff date and you're paying interest to yourself.
    Try not to be too hard on yourself - if you can keep from adding any more debt, it's all just paying off from here on out.

  7. You are making progress, Mysti! Don't give up!! You are now paying attention, and that is half the battle! I'm pulling for you!!

  8. 2011 was a really hard year for you mysti. it's a wonder you survived. keep going at it, you will get there eventually!

  9. I think it is a mistake to call your critics "haters". Why would anyone hate someone they've never met and whose get-out-of-debt situation is blogged about on line? We are well into quarter 2 of 2012, so I agree with you that it is time to hit the reset button and move forward.

  10. 2011 was indeed a hard year for you. Don't dwell on the past. Look ahead. That is how I got through 2011. Even though I was only making the minimum payments for 2011, it paid off and I made progress. It did not seem so, but it did. Slow and steady.

  11. I completely understand where you are coming from. Life can really do a number on us sometimes. I am pretty sure that my 2012 is your 2011. It's been a rough year already and I am nervous to really look at how these new numbers are going to affect me. Sometimes it is all you can do to keep your head above water. It doesn't mean that you are doing it wrong (even if the numbers still don't look how you want). It just means that sometimes life maxes us out and we just have to keep going with all we can. Good luck to you and I am sure this year is going to be better for you guys :D

  12. Been there, done that, Mysti! I'm with everybody else. Sometimes almost breaking even is as much of a win as beating down the debt. It's a process. Hang in there :)


  13. As painful as this exercise may be, I think seeing how much you managed to pay (and that is a LOT of money) and how "little" it took away from your final debt amount, is a great exercise in reality. Credit card debt is horrendous and I bet seeing those numbers and knowing how incredibly hard you worked to pay that amount will help keep you from back sliding again. We should ALL run those numbers at least once a year, whether or not we are in debt. Just keep swimming...

  14. I know it's hard to see the numbers totaled up but in the end you will lick this monster, just one day at a time. Good luck

  15. I appreciate your honesty, and I'm sure that's why a lot of folks keep coming back to read your blog. You tell it like it is. Sometimes, that means things aren't pretty and don't fall nicely into place.