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.....

New Year, New Totals

Here we go....the new, updated totals for the new year!  (note, graphics are from various sources.  The car pics are not out actual cars, but pretty close look alikes!)

For prosperity:

Retirement Loan:   $13,460.50

As I stated previously, we adjusted the terms of this loan in October 2014 to allow a greater cash flow in anticipation of G-man's move to NC.  Previously this loan was going to be paid off in April/May 2016, and it is now April/May 2017, based on the current repayment of $221 per paycheck (26 checks a year).  Previously it was $380 per check. 

Student Loan:        $22,474.73

This loan is the last on the list of priorities of repayment.  It always has been.  We pay $229 a month for this loan.  I *think* I am out of deferment or forbearance time for these loans, so even though we are dealing with some income fluctuation, I am not sure there is much I can do.  If we get to the point where we have to find a place to reduce...I will call and ask.  The worst they will say is no.

Credit Card:          $9,998.97

*sigh*  This total is a self-soothing, psychological game.  I couldn't deal with it going into 5 figures, so I made sure it was UNDER 10k, even if it is only by $1.03.  This is by far the BIGGEST area for improvement.  We have used it as a crutch, and we know it.  Especially in the past 6 months...there has been so much change, we failed to really pay attention.  That is on us.

Mysti's Car:           $5,150.00

At $230 a month, and a very low interest rate....this loan just gets chipped away each month.  It is scheduled to be paid off in November 2016.  I have started this little habit of paying an extra dollar or two to the principal to round the number off.  I just like the zeroes at the end. 

  

G-man's Car:         $3,500.00

This loan started at $6,000 at the end of October 2013 (first payment was November 2013).  So in 14 months, we have paid off  41.7%, and this was scheduled to be a 5 year loan (even though we never planned on taking that long).  This loan was done as a personal loan due to the age of the car (2001 Camry), so it also comes with a hefty 9.99% interest rate. 

Med/Dental:          $0.00

This is our starting number.  The question mark for 2015 is if this will STAY this way.  Bossy's supplies are on a 100% financial waiver that expires in February.  We will reapply for assistance, but there is a chance that we could lose the waiver, or have it reduced.  At that point...this number is going to go up.  Other medical and dental procedures will hopefully be covered by insurance and our FSA.  But we also have put aside extra to cover costs once the FSA is used up. 








Lastly....our EF.  It is currently sitting at $3,000.  My EVENTUAL goal is to have this at 5k. (In my perfect world, there will also be an account that has 6 months of expenses, but that is so far down the road, I don't really think about it). 

Financial Update...part 2

I promise....part 3....or the Year in review....or some post.....will talk about the side bar and the soon to be updated number.  But here is a continuation of part 1 from last week.....


The Boat

G-man sold the boat 3 weeks ago.  I hated the money sucking boat (even though it hasn't really been a financial issue for awhile).  But when the new owner was driving it away....I got sad.  The boat was purchased 6 months before G-man and I met, and I do remember the pre-kid days when we would take the boat out...he would fish, I would read.  Couple that with the major changes we have in general, and I just got overwhelmed.

We got $2000 for the boat.  Blue book was around $5000 for an excellent condition boat, and this was far from excellent.  It probably needs a few thousand in work, and time.  For the 20-something kid that bought it, who's best friend's dad is going to help him fix it up....they got an excellent deal (a trailer and a boat).

So we now have $2000 in cash......plus

Miscellaneous Money

Way earlier in the year we had saved about $2000 to make a massive snowball payment.  I just had a really hard time actually pulling the trigger, so it sat for a bit.  Then the move entered into the picture.  We used about $800 toward the getting-the-house-ready, and another $100 went to something that is escaping me right now....leaving $1100.

Add in the boat money, and we are at $3100.

Plus, we received a cash gift when G-man left his CT office.  That is another $350.

So now we are at $3450.    This is not our regular savings account.  This is not part of our EF.  This is pure "extra."

The Debate

As usual, I can't just pull the trigger on one thing with the extra money.  In some parallel universe there is a Mysti who has ONE plan and just follows it.  If I ever meet her, I will ask her how that is working out for her.

Meanwhile, in this universe, I keep running numbers....in no particular order.....

• Pay off G-man's car.  I haven't updated the side bar yet, but G-man's car is about $3472 with the December payment.  We keep a little slush in the account, so another $20-ish dollars and the car loan is gone, freeing up $127 a month, which could go toward debt or toward living expenses while we are living in 2 households.
• Huge snowball to Mysti's car.  My car loan is about $5100.  Add in whatever we get from our tax return, and there is a pretty good chance that by spring the loan is paid off, freeing $230 a month.  Again, go to debt.....or living expenses.  The biggest downsides to this option are that the loan has a very low interest rate so we aren't saving a huge amount there, and there is at least a few month delay before this is actually paid off....so the freeing of the money doesn't help in the short term.
• Huge snowball to the CC.  Obviously it doesn't get rid of the debt, but it is a boost to your credit score, which has fallen a few points because of the utilization ratio.  We are still in the high 700's, but I get an icky feeling seeing it drop.  As always, the concern is that using the CC as a crutch will bring the total up again.....yes, the simple answer is don't do it.  But let's just lay the cards on the table...there is a chance this is going to happen.  I know some of you will yell at me about this, but your yelling doesn't solve the problem that is "cash flow."
• Save it for the move.  We already know the move is going to run us in the $6500 range (between the movers, my trip to go house hunting, misc travel expenses, setting up a few home expenses, etc).  Obviously this covers about half....add in the tax return in a few months, and we should have about 3/4 covered.  We had figured at least some of our move would be charged, with the plan that we would have it as a tax write off...but that won't happen until 2016.  Whatever money we get back will go to debt in one form or another, it will just depend on what the situation looks like in 2016.
• Living expenses.  I started writing this post before we got paid yesterday and saw our $159 check.  The idea of saving it for living expenses was sort of on the bottom of the priority because a) we really didn't think the check would be THAT low, b) concern that it would get eaten away at "nothing", and c) G-man getting a second job was always a consideration to make up for a deficit.  But now that we know that we have about $330 less per month....this would float us for 10 months.  And we already know that this move is going to happen before then (hoping for May or June!)
• Fund the miscellaneous accounts.  I have talked many times about our on-line funds to pre save for expenses, such as car insurance and maintenance, water bill, taxes, etc. We also save for the cats, kids activities, Christmas....but right at this moment, those are secondary.  We could put aside money we know we are going to need for at least the next 6 months and not have to worry where that is going to come from.

In the short term.....it is going to sit and wait.  The next 10 days are just not the right time to make a decision, so we will mull it over.  (Although I would love to pull the trigger on 12/31 and bring out 2014 down!!!)  I am trying not to split the money into small piles, because it really doesn't help the big picture.

I really do wish we were in a situation where we could SPEND this.  But we aren't.  So this option is not an option.  But the thought was nice for the 1.3 seconds that it lasted.

Feel free to interject.  Am I missing something?

Just for Prosperity

Since I update our sidebar totals, if I don't note the starting amounts, I will never figure it out later.

On 1/1/13, our numbers stand at:

• Retirement Loan  - $31,603.91
• Student Loan - $26,314.80
• Car Loan - $10,320.08
• CC - $4,877.75
• Medical/Dental - $2,965.61

• Grand total - $77,245.15

Here is the kicker with this stuff....the Retirement Loan, Student Loan, and Car all have fixed minimums.  None of them are going to go back up since they aren't "revolving".  Just the minimum payments for the year equal $15,388 (give or take a few dollars for the miscellaneous cents we pay).  Doing nothing else but paying the minimum pays off 22% of those loans this year.  Doing nothing but what we are already doing....those 3 loans will be reduced to $52,850 from $68,238.

The remainder...that is the problem.  The medical/dental will go up.  As long as we continue on the payment plan we are on, it only satisfies the company that we are paying SOMETHING.  Each month, the amount we are charged is more than what we pay.  So that impacts the bottom line.

The CC....as long as we don't use the card, it will go down.  Any "extra" we have toward debt repayment will go toward the CC.  But again, the medical will go up by roughly the same amount we are paying.  In the end, I don't see the CC and Medical numbers really "moving" over the coming year.  They will probably end up swapped.

My as long as we can handle any emergencies (using EF, overtime money, side hustle money)....our grand total number a year from now will be about $62,000. 

Let's see how it goes.

I am not setting any real goals this year financially.  I do understand goals...but for me, the disappointment of not making a goal is way harder on me than the excitement of reaching a goal.  I just end up not feeling good about anything.  So I am not doing it this year.  I will say that I am hoping that we will just be able to maintain what we are doing.  Tax hikes, gas prices (we spend over $600 a month in gas....)...those will drastically impact our bottom line.

We have a few home maintenance projects that we need to complete.  We would love to do some IMPROVEMENTS, but I don't see that in the cards at this junction.  The few dollars we may be able to save toward the improvements won't be enough to actually complete any part, so it will just be a continuing saving effort.

I wish I could have the enthusiasm that we are going to beat debt this year!  That we are going to hit it hard and intense!  We are going to have a great year!!!  But I have done that already....hasn't happened.  2013 is going to be the year of.....let's just get by the best we can.

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.

Where do we go from here???

Excellent question, bloggy friends. I have some lofty goals....not sure if it will all work out, but I am gonna try!!!!

Debt Snowball.  The next victim on our list is G-man's car.  Actually, the end is near on that one.  Taking $2,000 from our refi money plus the regular payment for May only leaves a few hundred left on the loan.  With three paychecks in May, this is a no-brainer.  I am tenatively setting May 16 as the pay off, but depending on how things go, we might wait until the end of the May to make the official payoff. 

After the car....CC1.  That stupid card was paid off for a blink of an eye, and it needs to go back to that.  With the money freed up from paying off the car, we should be able to work through this one fairly quickly.  The catch to this....we only really have this money freed up for 4-5 months.

As of Sept 25, Student Loan #1's monthly payment will increase from $82 to $229.  We had always planned for the car to be paid off before that happened so the "car" money will become "student loan" money.  It will still leave $200 in play to snowball, so we have to take advantage of the full amount while we can.

Once we get to the fall, we will have to reexamine everything.  I am not sure where all the numbers will be by then.  As a general idea the snowball will go:  Car, CC1, CC2, CC4, Student Loan.

Notice I didn't put Lending Club in there.  That is because I "think" that will be paid off around the same time CC4 will be, so it really isn't getting any extra action.  But we will see.

My Car.  Alas....my car turned 150,000 miles this morning.  And while it is still chugging along, it won't last forever.  I would like to start saving for a new car, but haven't quite figured out how to pull that one off yet.

Insurance Stuff.  One of our goals for the year was to get more life insurance.  Since I will be 36 next week, and G-man will be 40 this fall....I would like to figure this out this summer.  I know we can't afford as much as I think we will really need, but I would like to at least get the ball rolling on this one.

So now...for the goal of the moment....

I would like to be under $60k in debt by my blog anniversary in August.  That is a little under $8,000 to pay off in 4 months.  The car will be about a third of it, so I think it possible.  We are sure gonna try!  G-man has been putting in for overtime, so as long as we stick to the plan, I think we should be ok!!!

Thoughts?  Would you do it differently?

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.

How quickly it spirals out of control

August has been a great big fat failure.  I haven't even looked at all the numbers, and I don't want to. 

Things are running amuck, amuck, amuck!  (Quick, name that movie!!!)


Credit Cards - you give an inch, they take a mile.  And this is what happened.  A few small purchases lead to a few larger purchases.  Old habits die hard.  $350 was spent on school supplies and clothes and shoes.  ($150 of it will be paid off at the end of the week).  G-man got some gas.  And then there were my beautiful boxes.....which somehow the cash I had saved for this got gobbled up in the great abyss of my checkbook.  A little here, a little there....and now the damage is done.

The lessons here....

1)  We aren't ready to be responsible.
2)  We didn't plan appropriately for expenses.

The "excuses" aren't great....but some of them are real.  Between July and August, we had several gifts to buy (2 baby showers, kids' birthdays), personal property taxes, and a few other smaller bills.  The cats went in for check ups to the tune of $246. All of these are expenses that cut into the bottom line and we are still learning to plan for.  Plus, the interest....oh, the interest....hate it.  Our party in late July....that was all us.  No justification there.

Student Loans - I have somewhat stuck my head in the sand on that one.  We are snowballing Loan 2 right now, but Loan 1....I have been "ignoring" the accruing interest on the loan while we have been on a lower payment.  It is up by $111.  So the actual balance has now been reflected to show this. 

Floating Money - My parents are lazy.  They tend to let us figure out birthday presents, Christmas presents, etc.  And then they LET us buy it all, and wrap it, and all of that jazz.  Eventually they pay us back, but we have to figure out how to pay for it to start with.  So, add in another $100 for what we paid for as a loan to my parents.   I hear from my mom....I will send a check....and then I have to ask for it.  C'mon...they don't have 90 seconds to send me a check???  It isn't about the money....they just don't care that their actions impact others.

So, bottom line....in the past month, we managed to undo 25% of our efforts.  I am embarrassed and ashamed of us.  I am angry with myself. 

And why do I share all of this......because someone has to be the blog that doesn't have it all together!  No offense to those that have wonderful stories to share that they got on board with debt repayment and did fabulous.  That ain't us.  We are really struggling to make this work....and I hope that this shows others that not everyone has it all together.

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.

Should I try again?

As I have mentioned many times, our interest rates (19.24, 14.24, 11.99, 9.74) on our CCs are part of the problem with our snowballing.  We pay soooo much in interest, it is hard to have extra to pay on the principal.

Last year, I tried to get the 19.24 reduced.  End result....not only did they not lower the rate, they cut my credit line by about 6,000 (at that point, my card was $189 from the limit).  I was told this was for my own good.

Fast forward to today.  Our CC4 has a balance transfer offer of 2.99% for 6 months (of course, it also has a 5% fee!!).  But even after the transfer rate expires, it would revert to 9.74, which is WAY lower than 19.24!!  We are leaning toward transferring about $6800 (which would bring us to $7140 with the fee....the limit is $7300).

This would leave CC1 with a balance about $9000.  Should I call them again and try and get the rate reduced??  The debockle was last July.  No late payments, and most months I paid over the minimum (which isn't easy when the minimum was at almost $500!!!).  Even if they lower it to 17.99...that is something.  I would love to see it in the 15.99 range, and then maybe try again in 6 months.

I am just afraid that they will screw me again.  Since July, I have paid about $2600 to this card in principal, which again, isn't easy when you get slapped with $300 in interest every month.  So I would hope that they would see I have been really trying.

Additionally...I also had the thought to transfer that $9000 to CC2, which will put it at about 85% capacity.  But the interest rate on that card is 11.99, so I am still saving some (minus the fee).  My concern there...this is G-man's card (from pre-marriage) and as the primary income provider, will "maxxing" out his card be bad?

Another thought...call CC4 and see if they are willing to increase the limit so I can transfer more to them.

OK bloggy friends.....thoughts????

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!

Confession time

I charged $253.12 on Black Friday to my Discover card. It had the lowest interest rate. And my plan was to use my extra paycheck this month to pay it in full.

Mostly I was trying to generate a small usage so that maybe I could get a balance transfer offer. Since it has a much lower interest rate, a transfer would be helpful. But alas, no transfers have been offered in awhile.

Maybe now that they see I used the card.....

I will say this....I looked at the statement on line, and I am feeling guilty about one purchase. I think that will go back tomorrow. Which will bring the balance down by about $75.

I haven't used this card in 3 yrs.......I am warped.