I had a huge wakeup call last week as I attended a High school information night for my oldest child. I was sitting there listening to the speaker talk about the pro’s of our appointed high school, when it hit me that my “Baby” that I swear I just had a few years ago was going to be in high school, and worse than that, he is just 4.5 years away from College. ::gulp::. Now I am well aware that kids grow up, I am ok with that and even look forward to it a little bit (especially when they are all fighting). What really killed me is that for my entire marriage (save for a 14-month period of time) I (we) have been in debt; whether it be credit, car, medical or otherwise, debt has consumed our lives. We have gotten close many, many times to completely paying it off, then disaster would strike and before we knew it, we were climbing out once again. Now that there will be legislation passed sometime this year stating that CC companies cannot penalize you for a late payment, the companies are penalizing people, even those who make religiously prompt payments of more than the minimum, with astronomical interest rates. I have a good credit score, I will even venture to say that I have a great credit score, but that was not enough to keep my interest rates below 21% and over. So now, with college looming in the near future for my oldest, and then the other kids close on his heels, I have made an absolute decision to conquer this debt once and for all, despite the &*#E@$ at the companies and their policies.
It is not just the idea that my son will be in college, it is the idea that I would like to go myself, and if we continue to be in debt like this, it may never happen for me. I presently run a daycare but really don’t want to do it forever, because as much as I love the families and children, it is a taxing job. I am also floored by the amount of interest I am charged each month; I could have a car payment for less than I pay.
I have been using the snowball plan for quite a few years, but due to conditioning from my Suze Ormand fixation, I have a hard time just paying the minimum on the other cards, so I sort of get this diluted snowball effect, because I pay usually twice the minimum on each card, usually more. It is going down, but really is diluted, it in turn takes much longer to pay down the smallest debt. I have decided, that since I have been penalized for being a customer, and really there is nothing more they can do to me, I am going to go for the snowball plan and do it Dave Ramsey style.
His first step is to get $1000 into an emergency fund; I am nearly there, and will be implementing my Snowball plan this month. I also have a goal to not use credit cards for the rest of the year (well as long as it takes); debit cards or cash will be my only methods of transaction. I know it is going to be difficult, I have a little addiction to Kohl’s, and love to play “guess how much I saved?” by using the coupons they send and buying from the clearance racks. I am just going to have to get over that. We also are working on our house and had planned a kitchen remodel this year, but it will likely have to wait until we are 100% debt free.
His second step is of course to be debt free, but I won’t get ahead of myself. So I will keep you all updated on how my progress is going. Anyone want to join me on the road to financial freedom?
It is not just the idea that my son will be in college, it is the idea that I would like to go myself, and if we continue to be in debt like this, it may never happen for me. I presently run a daycare but really don’t want to do it forever, because as much as I love the families and children, it is a taxing job. I am also floored by the amount of interest I am charged each month; I could have a car payment for less than I pay.
I have been using the snowball plan for quite a few years, but due to conditioning from my Suze Ormand fixation, I have a hard time just paying the minimum on the other cards, so I sort of get this diluted snowball effect, because I pay usually twice the minimum on each card, usually more. It is going down, but really is diluted, it in turn takes much longer to pay down the smallest debt. I have decided, that since I have been penalized for being a customer, and really there is nothing more they can do to me, I am going to go for the snowball plan and do it Dave Ramsey style.
His first step is to get $1000 into an emergency fund; I am nearly there, and will be implementing my Snowball plan this month. I also have a goal to not use credit cards for the rest of the year (well as long as it takes); debit cards or cash will be my only methods of transaction. I know it is going to be difficult, I have a little addiction to Kohl’s, and love to play “guess how much I saved?” by using the coupons they send and buying from the clearance racks. I am just going to have to get over that. We also are working on our house and had planned a kitchen remodel this year, but it will likely have to wait until we are 100% debt free.
His second step is of course to be debt free, but I won’t get ahead of myself. So I will keep you all updated on how my progress is going. Anyone want to join me on the road to financial freedom?
Wonderful goal! I will need to have employment before I can hope to join you. I look forward to hearing of your adventures. Victoria
ReplyDeleteOh no, I am going to have to edit my pictures on face book lol. Never thought I would see that one on here.
ReplyDeleteThe system is set up to keep you in debt for as long as possible. I would seriously suggest that you cut up all of your CCs immediately and I mean all and immediately. No more unnecessary trips to 'shop'. Think about shopping like a guy to save money. Most guys don't 'shop' they purchase. I already have an idea of what I want and if I don't see it on the rack I don't look around to find something just as cheap or cheaper to settle for. My last trip to Old Navy took less than 10 minutes including waiting in the checkout line. I bought stuff for me and my two kids. Can anyone else say the same? Do your shopping at home, buy/purchase what you need in the store.
ReplyDeleteThanks Nate, I have cut up most of them, yesterday however, I was trying to set up an online payment for one of them and it wanted the three digit code on the back of my card, oops, no card to find code from, oh well had to pay it with snail mail, I find I pay more when I can pay it online, they also can't "hold the payment".
ReplyDeleteMost of our debt is medical, house and car expenses, ususally all emergencies, (our house is old and falling apart, but luckily most things have been fixed that could cause problems), which is where the Dave mandated "Emergency fund" becomes paramount.
I know what you mean about shopping like a guy, it makes me laugh that you describe it that way, but when I use a list, and stick to said list no matter what, I stay on track and only get what I need. Plus I am done in half the time. My husband is a browser, and always on the lookout for bargains, I usually have to tell him that we are sticking to the list, and not getting anything extra.
Watch out for debit cards too. The banks can charge outrageous overdraft fees on them and regular checks. If you have online access to check your accounts I would suggest you track it, especially around the time your mortgage payment is due. Banks will hold off paying things and your online statement will say something like 'pending'. I have noticed my smaller purchases stay in the pending status for 3 business days, but my rent payment nearly always clears immediately. They do this to hopefully collect multiple overdraft fees on many smaller purchases instead of one overdraft fee on the big rent or mortgage payment if for some reason you don't have quite enough money to cover everything. They can do this even if your smaller purchases were made before the larger.
ReplyDeleteThanks, I detest my particular bank for that reason, but it prompted me to have a cushion in my checking account that I pretend isn't there, so that if I do go over, or have a small emergency, I can still get what I need, and not overdraft. (recently Rei got his teeth knocked out, and we had to buy soft diet stuff, on top of our regular shopping. I didn't officially have the cash to do it, but we had the emergency stash and were able to get what he needed). I am quite meticulous at this point, I check my online account frequently, I write every little purchase down, and use a budget. And the debt has been going down, just not quickly. I wanted it gone, oh maybe 4 years ago. I think this way I will see the payoff much sooner, and feel like I am accomplishing something.
ReplyDeleteI'm sorry, Jen. I thought it was cute. I'll fix it, though, K? Victoria
ReplyDeleteNo worries, you don't have to fix it. (I just thought it was a hidden photo on facebook, guess not lol).
ReplyDelete