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. 

Not now...but maybe in a few months??

One of the biggest hurdles we had with our credit cards has been the interest rates.  At one point, we were paying 19.24% on a large balance card!!  We did a Lending Club loan and a few other things, and worked around it.

As it stands right now the interest rates are:

• CC2 - 11.99%
• CC3 - 14.24% (but the current balance was a balance transfer offer of 1.99% through January '13)
• CC4 - 9.24% (but over half of the current balance is at 5.99% from a balance transfer offer)
• Lending Club - 7.88%

I would really like to get as much of this revolving credit down to as low of an interest rate as possible.  The place that has the lowest rate....our retirement account.  Once the current loan is paid off, we can dip into it again in 60 days.  The rate?  1.75%.  Of course any money we would withdraw would not be earning interest for our retirement.  We would have to be sure that the overall benefit would be worth it.

The reason we are considering this is that G-man isn't even eligible to retire for 19 more years.  Once the debt is paid off completely, we plan on aggressively saving for retirement.  And if we can get the debt paid off within 4 more years, that would still give us 15 years to really save and invest.

I have kicked around a few thoughts.

• We can take out $6500 for a 24 month term and pay off Lending Club.  If we increase the minimum payment so that it is paid off at the same time Lending Club would have been paid off....it is a net savings of roughly $40 a month for 17 months, or a total savings of $680.  That $40 savings would go towards another CC.
• We can take $10,000 out over 3 years, which would be $130 a paycheck, and pretty much wipe out CC2 for the same amount we are paying per month now.  

Another idea we had was another Lending Club loan.  More interest, but doesn't effect our retirement.

We aren't going to do anything now...it would be April the earliest that we would do ANYTHING.  We have to wait for 2012 to settle....wait for the current retirement loan to be paid off for at least 60 days.....so nothing anytime soon.  I just really want to find the right avenue to make progress!!

We do well with the "set it and forget it" stuff.  We set up payment plans, and just let them do their thing.  Lending Club has been fabulous for that.  We got the loan....we put money aside each paycheck...and once a month they debit our account.  Once the January payment posts, we will be almost half way paid off!

G-man's car was the same way.  We had money direct deposited into the account, and it was debited once a month.

I am trying to do the same thing with the rest of our debt.  Just trying to get it to the lowest interest rate possible!   Any thoughts????  Right now we have $1105 in the budget that is designated for CC payments (minimums + $150 extra).  This is JUST for the CC and current Lending Club loan.  Not the car, student loans, or medical.

Move it to the left....move it to the right....

Once again, in an attempt to pay as little interest as possible, we are moving things around.  I really wish we could just come up with ONE plan, and stick to it.  But that just doesn't seem to be in the cards for us.  Whatever.

CC3 had a 1.99% balance transfer through January 2013, with 1% fee.  Per their policy, we couldn't go over 80% of the limit in a 90 day period, so with the fees and all....we transferred 79%.  :)  It was the majority of CC1 and part of CC2.  I am watching CC4 to see if they offer a balance transfer.  I am doubtful on this one.  But I am watching.

We are also planning on trying another Lending Club loan.  We did this almost exactly one year ago, and it worked beautifully for us.  We have paid WAY less interest, and have paid off 1/3 of the loan at this point.   This would replace CC2. 

I realize that the fees eat into some of the benefits.  But the minimum payments collectively are almost the same, just more going to principle.  This will at least buy us a little time to figure things out further.

If I am able to get this job (please!!!!), it will drastically change the numbers.  I am estimating that we have the potential to be debt free (minus the house), in about 2 years.  I would LOVE to be debt free by 38.....two years before my goal.  But one thing at a time.

G-man has some overtime this month....about 14 hrs so far.  There is the potential for more in the next 4 weeks.  I am thinking of holding on to the money for the mean time and top off a few accounts, like the EF.  I need to see how the numbers play out.

I will update all the numbers soon.  Just waiting for them all to settle a bit.

Well, if it is going to happen....let it happen all at once.

I am sooooo glad that New Year's is coming, because it is like a big reset button!!!!

Things have piled up left and right, and now I am trying to re-sort, re-analyze, re-----lax?????

1)  Christmas Blow Out - I don't even know what the numbers are yet.  Other than over budget.  Funny thing about it though, it isn't because of the kids.  We have spent less than $60 per child.  Budget blow outs have been because a) G-man has gone hog wild; b) I failed to budget for some "forgotten" gifts ; c) I set too low of a budget for some items, and by default, I had to increase the amount, plus I underestimated the shipping costs, and d) the Craigslist money we were "saving" for Christmas....some of it got used over the course of the year for a few things.

2)  Those irregular bills - Water bill was due 2 weeks ago, but it is still outstanding.  Between that being over $100 higher than I expected, Christmas, blah blah blah....I still have it.  Additionally....personal propery taxes are due "Jan 1" with a 30 day grace period.

3)  Love/Hate the 3 paycheck month - It got sucked up in "life."  My plans on paper...ain't worth the paper they were written on.  Additionally....my boss has decided to muck with payroll schedule.  So while I was expecting 3 paychecks this month, it is actually 2.5.

4)  My car!!! - Bad water pump and something with a hose to the heat core....$564.  We had $120 in the "car maintenance" acct, and the rest will come from emergency fund, which will drop to just over $1000 now (it was at $1500).

5)  Christmas Bonus! - I got $200 Christmas bonus.  Up until today, I was toying with treating myself to a new tattoo....a memorial tattoo for my daughters.  I picked it out 3 years ago, and haven't done it.  Well, now that seems largely irresponsible.  Between having to dig out from Christmas overspending, bills, the car....I would never be able to enjoy the tattoo.

6) Medical stuff - I need new contacts and glasses.  That was SUPPOSED to come from the 3-paycheck months.  Um, no.  So that has to wait until after Jan 1 when our FSA resets and I can use that. 

7)  Need to revamp the plan - before my car broke this week, I was toying with taking money from the E-fund to "fix" some of the above issues.  Now that I have to use almost 25% of it for the car, it makes me nervous to take more out.  Need to look at the numbers again.

8)  Snowball thoughts - I really thought I could pull off paying off my Student Loan by Dec 31.  Not sure now.  We had also planned on paying down CC2 (with the highest interest rate), as the next snowball victim.  The new plan is to undo Christmas damage, and then focus on G-man's car.  If my car is going to start to die, I don't want to end up with 2 car payments.

Oh, and dear bloggy friends....this isn't even all of the stuff going on!  More on that stuff another time.  At least you know where I have been.....dealing with LIFE!

Oh boy....I messed that up

In the past, G-man has gotten a big fat F on gift giving.  Doesn't matter the occasion....and really, he only has my birthday, Mother's Day, and Christmas to contend with (we don't do Anniversary gifts since it is only a month after Christmas).  Christmas is usually ok....the others.....leave something to be desired.

In a fit of annoyance, I told him I wasn't going to set a limit on his spending for my Christmas gift.  "Just don't go stupid crazy, ok," was my only guideline.  Now, I really should have known better.  I have been married to this man for almost 13 years....I do understand his thought process and spending ways.  But I was mad, and I was being a little selfish, and I wanted a little recognition for all that I do.  (Yes, he tells me he loves me, and that his grateful for what I do....but trust me, "heartfelt" isn't the word I would use to describe the conversation).

Additionally....I thought it would be easier to undo any damage he does if it is all contained to one place.....

ok....here we go....*duck and cover*   I told him to use his credit card.

*duck and cover*  I thought if it all went to one place, I could tally it up, and offset it.  Yeah......um....this isn't working so well.

So this is what is happening.....first off, I can see where he is buying stuff.  And I am getting a little confused.  Like the $26 he spent in Best Buy yesterday.  There is only one thing on "the pre-approved list" that could be purchased there, and it isn't $26.  So who knows what he is doing.

(A note about the pre-approved list:  This has only happened in the past few years.  It stems from YEARS of gift giving from family and friends that decide to ignore ideas and go off on their own, and it is never good.  I have gotten pajamas I hate.  Jewelry I will never wear.  Movies I will never watch.  And the worst.....ugly Harry Potter resin bookends.  So now, we each pick out specific items and those are the EXACT items to be gotten....)

Second, he is using his CC for gas, groceries, fast food.  UH, NO!!!!  That is not what we agreed to!!!!!

I spoke to him about this and said

1)  I love you.
2)  Are you keeping track of what you are doing....it isn't about the total at each store...you have to add it all up, my love.  When I asked him if he knows what he has spent...he didn't.  I am getting $225 before all of the other stuff that was on the no-no list.  *sigh*
3)  Why are you buying other stuff....which went into a thing about his debit card not working, and blah blah blah.  Hello, communication, my love!  If your debit card isn't working, you need to tell me!

I fully realize that I am partially to blame.  I should have known better than to let him loose on all of this.  It really did come from a rotten place where I was feeling sorry for myself and tired of being the one shafted all the time. 

Do you know how hurtful it is when your kids at Thanksgiving say "I am thankful for Daddy, because he is fun and I like his music."?  When it is Mommy who runs herself ragged.  When it is Mommy who keeps everything running.  When it is Mommy who deflects everything. 

Yes, Daddy works alot of hours.  And that is basically where Daddy stops.  And Mommy does the cooking, cleaning, finances, medical, and everything else.  And everyone sings the praises of Daddy.

I also know if I slap his hand, I am by default punishing myself.  If I scold him, he won't do it....and I will continue to lose out, since he can't seem to show me appreciation.

I am going to have to rack up all the damage.  I have bought a few things  for the house and probably shouldn't have.  And I still have a few gifts to buy for some random people.  But I need to see where the bleeders are, and cauterize them.

Yeah...I am whiny and I know it.  I know I come off horribly selfish sometimes, and that it is all about ME.  But please understand.....I am the one who does without most of the time.  I am the one who runs EVERYTHING.  And I am barely acknowledged.  My parents blame me for everything.  And once in awhile, I just want what I want.  For those 2 minutes....I just want something to be about me, and not about everyone else.

Planning the next move

My current snowball is rolling on down the hill, and should be paid off by the end of the year.  This is the last of my student loans that I have with my Dad, and I just want them gone!

So, which debt is next?  Looking at the Credit Card debt, each balance is around the same (give or take).  The interest rates widely vary though.  The car?  Our retirement loan?  Student loan?

Using the Dave method, it would be the next smallest balance.....which would be the retirement loan.  Interest-based.....that would make it CC2.   I have an idea of what I want to do, but I am curious to see if you come up with the same idea, or maybe something I haven't thought of yet.  Let's do a pro/Con list for each.

Car

Pro:  Once paid off, it frees up $358/mo towards other debt or saving for a "new" car for me (mine is 11 yrs old with 144k miles, and while I plan to drive it 'til it dies, at some point it will need to be replaced).

Con:  It is scheduled to be paid off in Dec 2011/Jan 2012 just making the regular payments.  Interest rate is only 5.74%, so we aren't saving a ton there.

Retirement Loan

Pro:  Frees up $210 a month.  Money goes towards retirement, so it can continue to earn interest.  Can either put this money into debt snowball, or re-instate retirement contribution.

Con:  Money was pre-tax, so it isn't really freeing up $210.  

CC2

 

Pro:  This has the highest interest rate (11.99%) of all our loans, therefore we stand to pay the most in interest here.  Paying it off saves on the "wasted" money to the CC company.

Con:  Dunno.

CC4

Pro:  Because about half of the balance is at a low (5.99%) interest rate, and the other half is 0% until next Novemeber, most of the payment is going directly to principal.

Con:  Since the rates are so low, the principal really won't gain that much interest if I continue to pay the minimum.

Student Loan #1

Pro:  This represents about 45% of the balance of our debt.  

Con:  This is the lowest interest rate debt.  Right now it is in interest only payments (until next October), so concentrating efforts here may not do much to reduce the overall debt in the next year.

Lending Club

Pro:  A quicker pay down would show investors that we are a "good" risk, and would increase our chances of getting a future loan, if we needed it. (but we plan to NOT need it, unless it is consolidating debt at a great rate with a quick payoff)

Con:  Dunno.


So there we are......what do you think I should do?

Shuffle, shuffle

We decided to do a balance transfer on the credit cards.  CC4 was offering 0% for 1 year, and thereafter, it is 9.24% (our lowest rate of all the cards).  We decided to transfer the balance of CC3 (14.24%), and a small amount of CC2 ($1,000).

Once Student Loan 2 is paid off (cross your fingers, in December! I have already started to write a song about it.), we will be tackling CC2.   We decided to go in interest rate order, and at 11.99%, it would be the highest (since we now transferred CC3).  I would love to try and get rid of it by the end of next year.

We already know the car will be paid off at the end of 2011.  The Retirement loan will be close.  And to be rid of CC2 too....awesome.

Also in play is the fact that Student Loan 1 payment will increase at the end of 2011.  Not entirely sure of the new payment amount....but I think it will go from $82 to $229.  I am kind of just waiting that one out and will adjust accordingly.

Of course, I am also hoping that our snowball takes on a life of its own, and now that we are paying significantly less interest on a huge portion of our debt (thanks to Lending Club, balance transfers), I look forward to watching the numbers continue to fall.