Wednesday, August 5, 2015

6th Blogiversary - The Credit Card Edition

Hope you have been checking in this week and have seen the new totals thus far.  Monday we talked about the retirement and student loans.  Tuesday focused on the cards and medical.  And today....my friend, the credit card.

Credit Card
Day one of blog: Not really sure...the first number I can definitely find is for 1/1/12 at $37,164.32.
2014: I know it was $8,800.67 at 2/1/14

2015: $10,975.78

(I gave up looking through the blog for numbers.  I pulled numbers from a spread sheet I keep, so sorry that they aren't "accurate" by the date.  I promise the 2015 number listed is accurate).

This is probably the hardest number to deal with.  All the rest of the debt are "straight down."  You can't add to them.  This one is is within our control, and we continue to suck at it. 

I didn't work outside the home from the time the kids were born in August 2002 until March 2008.  Being home was NEVER part of the plan.  Our original plan when I found out I was pregnant (April 2002) and due in late December was to work until Holiday break (I graduated with my teaching degree in May and had planned to start applying for jobs right away...actually I had one interview....).  So I would go on maternity leave until "winter break" (at that time in CT, kids got another week off in February.....most schools have done away with this now and just have a long weekend for President's Day).  And then I would be back to work.

Yeah, that plan got blown up when I found out I was having twins and was told that I would probably deliver early, as alot of twin pregnancies do.  We were figuring Late October at that point...hoping for November.  I couldn't start teaching in August and leave in October...so teaching got put on hold for a year, and I would go back in August 2003.  I ended up going back to my old job that I had before my student teaching, and was going to stay there for a year or so (minus mat leave).

So when our darlings were born in August, 17 weeks early....we just weren't ready.  Financially, emotionally.  We weren't ready.

We blew threw our savings while they were in the hospital.  Gas, parking, eating out.  Sassy came home in late December (123 days in the NICU), and Bossy came home a month later (153 days in NICU), and ended up back in the hospital 5 days later for another month.  We had bought the house in 2001, and with both incomes, we were fine.....with one income.....not as fine.

After they got home, I made the very hard decision to ask for public assistance.  It was humiliating for me.  I had a Master's Degree....and I needed help.  So I called.  But G-man's salary was over the income limit, so we didn't qualify for anything.

As the kids' 1st birthday approached, the discussion turned to my going back to work.  But that required day care.  And most places don't take medically fragile babies.  Bossy already had his feeding tube, and we were repeatedly told No, they don't do that.  I did find one place that would take him....it was 40 minutes from our house, they wouldn't take Sassy (so she would have had to go to a different day care).  And just for Bossy....it was $600 A WEEK.  $2400 a month for just one child, and roughly another $1000 for Sassy.  Paying $3400 a month for childcare wasn't going to happen.  We didn't consider having anyone come in, because by the time we got to that point of the conversation....I had already made up my mind that I was staying home for awhile.

So the credit card became our second income.  G-man was already working his second job, but our income was still down close to $25,000 from pre-babies...and now we had 2 babies to take care of.  Diapers, food, whatever....it went on a credit card.

I really didn't look at the bill.  I just paid the minimum.  I didn't want to know.  In my mind, it was justified.  There was no other way.  G-man's income covered the house and utilities, and probably the car (my now dead van).  But food, gas, variable spending.....it just wasn't there.  We had to do it.

Using the credit card has been a way of life for a very long time.  We have tried and tried to not use it, and we fail each time.  Most of the time it comes down to a timing thing.  Pay day is Wednesday...but the only time we can go grocery shopping is Monday, so we use the card, and then pay it later in the week.  But too many times, the lid on Pandora's box is open....so we go grocery shopping....and we pick up a few extra things....or a coffee.....or figure it is easier to do all the shopping we need while we are out, so we also go and get $100 of household stuff, personal care, etc.

Then there is the spending that we just can't fit into the budget....like back to school shopping.  I know they will need stuff, but just can't find it in the standard budget.  This usually happens because I find the money, then some utility bill goes up due to rates (if you look at the historical data...our usage is down....but the charges are up)...and I have to pull it from somewhere.

And of course our friend, Murphy.  I have a HUGE problem using our EF.  That cash to me is way more valuable.  Using it, and knowing how long it will take to put it back is very anxiety provoking.  Even though I know that charging something will keep the bill around way longer....the anxiety of it is less.  And in the moment, anxiety wins.  I have spent my whole life dealing with anxiety over things I can't control.  And I still do....every freaking day.  No, I am not a control freak.....it isn't about my way or the highway.  It is about really deep scars that I am still dealing with.   

Then there is the true "spending."  That is the category that while percentage wise is small, is the hardest for us to control.  We eat out because of poor planning.  We want to take the kids somewhere, because we want to do something fun.  G-man works so hard, and he deserves a treat.  I work so hard, and I deserve a treat. Of course we "deserve" it....we ALL deserve the nice things in life.  But you can't always have what you want when you want it. All of this is on us.  I have been so tempted over time to just

It is a small creep.  But each month that the minimum payment goes up, that money gets pulled from somewhere.  And if I then run out of money, the tendency is to lean on the card.    It is a cycle.  A rotten cycle.  The simple answer is to just STOP.   And we have tried.  And we have failed.  We retooled the debt to "wipe it out" and then due to bad habits, we shoot ourselves in the foot.

Oh, and then there is the reward dollars....I have been guilty of chasing the reward dollars.  The only time this really "works" is for gas.  We have to put gas in the car.  So we use the card, and I get home and pay the credit card, and we get 5% back.  When gas prices were over $4, we EASILY hit the maximum amount for the quarter and netted $75 in free money.  Or if you shop through them, you can sometimes get up to 20% back....which is great for one time large purchases.

So here is the number.  For better or for worse.


Here is the difference in things now vs the past.....I can finally see progress.  I am out of the "what does it matter, it isn't getting any better" mindset. I am tired.  I am tired of thinking about it.  I want to move and kick up all the dust, so it can settle and we can just finish this once and for all.   Eighteen months ago, we were at $8,800, and now we are at $10725.  That is up $1925 (An average of $106 per month....creep.....).  It is up $725 since the first of the year.  As much as I would like to blame the car repair for most of it....I know that this has been a result of poor planning/being overwhelmed/small pick me ups.

Right now I just look at things from a cash flow standpoint.   We are contemplating a balance transfer that is 0% through Feb 2017.  It will take about 4 months to negate the finance charge for the transfer, and that would allow us 14 months interest free.  If we pay the minimum, it frees up about $100 to either snowball to something else....or if we continue to pay it toward the card....it will wipe out about 40% of the balance by then.  Of course....all of that is predicated on NOT using the card.

So there is the ugliest part of the update.....




17 comments:

  1. What an amazingly honest post. It's been hard for you! Sounds like you're dealing with it the best that you can, you're aware of what you have to do and you're working on it.
    We went the route of moving credit card debt from card to card for 0% charge and kept at it till it was paid off. But our daughter was grown, so we didn't have to worry about kids. And we weren't trying to sell a house.
    So good luck to you!

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  2. This is what it is, you had a emotionally difficult time to deal with, while most of these periods last a few months yours last years. Take stock and look at what you have learned. Could you have done things different? Sure, but then again you were doing what you could in a difficult and emotional time and I think you did exactly what any of us would have done financially. You have survived:)

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    1. I survived. I am just so over it.

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  3. Have you thought about freezing the card (like literally freezing it in a bowl of water), so that you can't use it unless it's an absolute emergency? Or using all cash for groceries and gas? (Or maybe you do these things now, I don't know ...).

    Over the years, I have learned that I just can't use a credit card for day to day expenses. I ALWAYS over spend and always wind up having to pull money from savings. I have a few monthly bills that I have set up to be automatically paid with a credit card and I always use one for travel - but that's about it these days. I don't even keep a credit card in my purse on a day to day basis b/c the temptation is too great. I would love to be one of these people who can use credit for everything and easily stay in budget ... but I'm not and I've just accepted it and moved forward.

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    1. Sure I have thought about it. But without G-man here, I wouldn't feel comfort right now. I have been very careful not to use it just for stuff. But like I said...if I have to go grocery shopping and pay the card 2 days later....I will. Not ideal. But it is better than in the past.

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  4. I'm like Ms. Moreless - I learned charging day to day expenses on a credit card just doesn't work for me, either. So, I just no longer have one to use. No temptation and no card available forces me to live within my income. Just a suggestion, but when you do finally sell your house and get to move - work up a very realistic budget, with everything listed you need to spend annually, along with a cushion for Murphy. Find a house payment/rent payment that fits into that budget, no matter what. The only way to stop the credit card trap is to have all your expenses lower than your income.

    What really was the changing point/eye opener for me was figuring out just how much interest I was paying each month on our credit cards. Just wasted money! I will never pay interest on a credit card again. While I do have a couple of store credit cards (no major credit card I can charge anything on) I have not paid any interest on my occasional charges in 6 years.

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    1. We pay about $87 a month in interest on the CC. Actually, the $20 we pay on G-man's car in interest bothers me more!

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  5. What is the interest rate on your current CC?

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    1. Would you move all of it to 0% interest or just the amount you could pay off in the grace period? The 9.24% is really good for a CC and I assume the 0% would sky rocket afterwards.

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    2. Not sure. We aren't doing anything until I talk to a mortgage broker about some other stuff. It would go to 11.99 after, but I would then have to look at if another transfer would be worth it.

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  6. You are heading in the right direction. When you no longer have to pay $5000 a year to heat your home, the credit card will go down quickly.

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