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.

Remember that reimbursement money???

I posted about having some reimbursement money from items I got for PTA, and my generous money from the Bank of Parents to restock our fridge after the storm. Additionally....we scraped together a little more.  In total, we had about $1,000.

I am not gonna lie....there was a temptation to go and spend it.  But we didn't.  We ultimately decided to snowball CC3!

Even though this CC has a rate of 1.99% until January 2013, and we have higher rate cards, we decided that we could see the most progress by doing it this way.  Just about all payments will go to principle, and not interest.  Plus, this will allow us to possibly transfer more to this card later on since we will have more room.

I am NOT happy at the balances of the other cards.  Some was frivolous spending....some was storm prep.  G-man's glasses, food.  So here we are.  Excuses?  Maybe.  But our budget seems to be settling down some, and we have a 3-paycheck month coming in October for G-man, so I am hoping that half of that will go to topping off the EF, and the other half to debt.

Well....if the move is back in play....that money will get hoarded...but we will know about that before we hit October.

Plus, I already know that G-man's dental emergency will up our medical bills, but until I get the bill...I am not sure what that number will look like.  And the kids have a check-up coming.  I cancelled my dentist appointment, as my teeth are just fine and I can wait.

I am still bummed that we are $2,000 OVER where we were 6 weeks ago.  If we get some money back from the car issues, that will help.  And we will be submitting some amended tax returns.  Those will help.

Back up on the horse, the wagon...whatever.

Payback, or snowball?

A question to you all...

I charged a few items for PTA (which I will get the check for next week), and a big Sam's Club run to replenish our fridge and freezer after the storm).  In total...about $520 worth.  This went on CC4.

Mom and Dad were VERY generous and sent us some money to help us with the groceries.

My question:

Do I put all this reimbursement money back towards CC4, that has an interest rate of 9.24%, since that is the card I used to make the purchases?

or 

Do I put it towards CC2, as an additional payment, since it has a rate of 11.99%?

I am still trying to figure out what my next snowball attack will be.  The medical stuff...although smaller...isn't gaining any interest, and is sort of revolving, so I know it will just go back up.   CC2....highest interest rate.  CC3....lowest balance, but has 1.99% rate until Jan. 2013.

I ran all the numbers, and CC2 seems to be the next logical choice by financial sense (due to the interest rate).  But I hate that CC4 went up, especially since I have control over that....and can just pay that back.

Thoughts????

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.

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.

I had to giggle at this one

There was a message on the home phone answering machine from my credit union, wanting to talk to me about doing an e-loan.

Why is this funny?  Because last year I blogged here and here and here about them turning us down for a loan!!

Not all that much has changed.  We are at the same jobs, making the same money.  We have paid off about 5k in debt, but that is about it.  So now they want to talk......hee hee.

Where were you a year ago when we were desperately trying to make some changes for the better.  When we really could have used the money, and have paid WAY less interest on things in the past year? 

We are still pending on the peer to peer lending.  I am getting antsy that it is the right decision.  It would pay off CC1 and part of CC3.  *sigh* I wish I were more decisive on these things.  G-man has bowed out of this one....he said the final decision is mine.  Thanks, hon.

A few updates

Credit Cards:

Did you notice some minor changes to our CC totals???  We completed a balance transfer offer that took $5,000 from CC1 (at 19.24%) and put it on CC4 (at 5.99% for 12 months, and 9.24% after). We decided against trying to open a new card and get 0% for a few months.  Ultimately, we were concerned about dinging our credit.  We are thinking about applying for a peer to peer lending to pay off CC1 and CC3, and trying to get the best rate possible....so dings won't help our cause there.

The totals will be updated later this week after I pay the bills for the week.

Snowball #1 - Hospital:

Part of G-man's and my big talk the other day was this bill.  I budgeted to have it paid by the end of August (the kids' birthday).  This is the last of the bills related to their birth, and Bossy's subsequent surgeries and hospital stays.  We have been paying this bill for 8 years.  Yes, EIGHT years, and I need it gone.  So, in a bold move....we decided to pay it off in July.  Taking the $410 that I budgeted, plus $200 from our savings account, and $200 from our "extra" emergency fund (Dave Ramsey says to have $1000....we have almost $1450, so we will still be above the $1000).  Throw in an extra $5, and it is GONE.  Emotionally, this is a huge victory for us.

The next bill we will snowball is Student Loan 2, which should be gone in about 3 months.  This bill is the last of my student loans that are in both my and my father's name.  I was 17 when I went to college, so legally all the bills were listed as me as the co-borrower, even though my parents didn't pay the bill.  My dad did a lousy job on my loans, and because of the way he did the loans, I was unable to consolidate them or do anything, with them.  One loan had an interest rate of over 10%!  So this bill just needs to go....c'mon, I graduated in 1996!!  The Student Loan 1 is my Master's Degree.

There after, we decided to veer from Dave and go in interest order.  Currently that would be CC1, CC3, CC2, CC4, Car, Student Loan 1  We decided to leave the Dentist out of it.  If we do a peer lending, this is subject to change a bit.

July Challenge - No eating out

Today is the 11th, and except for a minor slip up on G-man where he bought a soda (he forgot about the challenge), we have not had any take out, coffee, water, soda, or fast food.  Grocery budget is still doing ok and meal planning is really helping.  I will be heading to the store later to restock for the week.

Blogging Realizations:

When I added the progress bars, I realized that when I update totals, I just write over the previous total.  I keep forgetting to make note of the starting balance!  While I have the balance of our debt when I started this blog (my blog-anniversary is just a few weeks away!), I have lost track of a few things.  Like the hospital bill....I couldn't tell you what the balance was a year ago, or even when we started snowballing it. I could probably figure it out, but that would be more work than it is worth.  So now, I will make an effort to note the starting balance of the snowball.

I thought I was snowballing.  I discovered.....I am not.  I looked at just my credit card bills.  Looked at the minimum payment, and then what I am paying.  Turns out, that while "most" of my available snowball money is going toward one bill, I am paying extra on all of them!

Here's the breakdown of extra money paid, on just the credit cards:

CC1 - $52
CC2 - $25
CC3 - $8
CC4 - $0 (although I have paid $260 over the minimum this billing cycle)
Store card - $118

OK, so my goal was to pay off the store credit card, and at this point....done!  If I had taken the $85 extra that  I paid on the other CCs, I would have had that paid off 2.5 weeks earlier.

Next am trying to pay off CC4 (because I was mad at myself for even using that card again).  So if I take the $133 I spent paying off the store card and put it toward CC4, it will be paid off in about a month (since $133 plus the minimal $40 due will just about pay off the balance of $181).

I get the snowball concept, but the idea of just paying the minimum scares me!  I feel like I HAVE to pay a little something extra.  But I really can see the power of a true snowball.  The unfortunate thing is that the interest rates coupled with the balances on the remaining CCs will not give me the faster gratification that I sort of want.

I am such a geek....I find this facinating.  I guess taking the time to discover these things really will open my eyes to the possible.  That stuff really can get paid off.  Slow and steady wins the race.

I am hoping that some recent changes (took the landline phone down to basic service, lower electric bill, higher cell phone bill), which will free up about $60 more a month will really help.  Now the question is....do I really give it gazelle intensity and do the snowball in debt order, or do I tackle the CCs???

A short lived celebration

So, I started this post a few days ago, and while writing it, a few things came to light and I decided to delve deeper.

As of right now, we have paid off $1,004.95 of our debt! This number is going to probably change once some finance charge hit, dragging it closer to $900. My first reaction was WOOO HOOO! PROGRESS!!

Then it hit me....how much did we spend to get to this point? This is our total debt....I know we have paid more than $1000....why did it take almost 6 months to pay off a grand. Enter my goal to track better. So being the geek that I am, I did a spending analysis.

In this exercise, I focused on just the credit cards. For my purposes, I took CC statements Aug 2009-January 2010 for this exercise (the only exception is that I don't have the January statement for one bill, so I just took the purchases and payments...not the finance charges). They each have slightly different closing dates, so these aren't "exact" by month...just by statement.

Here's what I learned....

Total Paid: $5,945.55 (I thought it was closer to $4,000)
Total Purchases: $3,183.72
Total Finance Charges: $2,726.85

I thought we really had stopped using our credit cards. I know I dipped into one card a bit at the holidays. My bad. But seriously....how did charge $3,100?(wait...I will tell you!) Of the amount purchased...G-man was responsible for 68.6%, and I did the remaining 31.4%. I didn't think I had charged that much. Really didn't realize he did either.

I looked at the spending and made this little chart:

Turns out that 21% of the purchases were gifts (which includes a wedding, kids' birthday, G-man's birthday, and Christmas).  Just over 1/3 was gas and groceries.

This leaves just under half left...which was miscellaneous stuff, most of which probably could have been avoided.  In particular, the fees.  Two were late fees, and one was reward card fee for having the reward card. Discount stores....I am sad to report that I have no idea what those purchases were.  Could have been stuff....could have been food....could have been anything.  No idea.

Finance charges....WOWZA!  We paid just under half of the total amount paid, just in finance charges.

And the scariest number of all....$34.98.  Wanna know what that is????  That is the actual amount we paid toward CREDIT CARD DEBT.  Yes....if you add up our purchases and finance charges.....and subtract them from the total paid....you get this sad little number.  In 6 months, we managed to pay $35.

I am more than disgusted with us.  This exercise has been a HUGE jolt.  G-man and I have another talk coming up, and this is going to be at the center of it.  Gifts....we both blew it.  Groceries and Gas....that was mostly him not using our checking account.  Stuff I can't account for....that is bad.

So my celebration of repayment was very short lived.  This is not good.  But at least I know now and can move forward.

$866

That would be EIGHT HUNDRED SIXTY SIX dollars. Would you like to know what that is? I bet you do!

That is the minimum credit card payments that are due between now and January 20. That is just the minimum...no snowball...no extra....just the minimum. This number is roughly my entire January pay.

I am ever so disgusted by this. My fantasy plan is to figure out how to pay all the bills off of G-man's salary, so my salary can be the extra payments. With minimum payments for just the CC at this point, I am not seeing how this is going to be possible. But I am gonna try!

Slight good news.....very slight

The mortgage company collected too much in escrow, so we got a $50-ish check for the overage, and now our mortgage payment has gone down $44/month, effective November 1.

Debate....take the $44 "extra" per month toward medical debt, which is the smallest debt, but has no interest...... vs.

Add it to the payment on CC1, which has the highest interest rate.


Dave says tackle the smallest debt first. But since the smallest debt has no interest....would tackling the smallest interest collecting debt be better (CC3)??

CC 3 Interest

Of all our credit cards, this card is the most frustrating to me. You would think that the one with the highest balance would be my nemesis....and yeah, it is. But this card was originally designed to help us get out of debt and it just didn't work that way.

We opened this card to transfer debt. It had a fixed rate of 7.99% for purchases at that time, and something like an intro rate of 0% for 12 months on transfers. So we "maxxed" it out with a transfer. Paid on it awhile. Then tried to raise the limit so we could transfer more debt.
They wouldn't raise the limit to where we wanted, but they did raise it some. And we transferred more debt. I think we transferred debt at least 2 or 3 times onto this card. Each time, it had something like a 4.99% rate for the life of the balance transfer. Sounded great. Yes, we are on our way now!!

Nope. We had one late payment (of a day!!) and the 4.99% rate was gone. It reverted to the 7.99%. Still better than the rates on our other cards. And then the economy nose-dived. They changed the rate to 9.24%....ok, still better than the others. And then they changed it again, to 14.24%!!!

14.24% is now between the rates of the other cards (19.24% and 11.99%). This is not helping at all now. We don't use this card, and it was nice to see the balance drop (even a little) each month. This month, it went up from the interest!!!!

Darn interest.

New debate now is do I re-transfer the balance. The transfer rate is 8.99% with a 3% transaction fee. So it is roughly $200 just to transfer the balance, and then that makes the other card over 70% "full." Not sure what they would do to the ole FICO score.

I will talk to the Financial Advisor at our meeting on Tuesday.