October Goals – and other things

Well, I went for an interview on Sunday @ Wal-Mart, and they offered me the job (part-time cashier) pending background check and drug test. Could be called in for orientation as early as Saturday. The way I figure it, that will bring an extra $100 or so per week to the table, further reducing our debt. My wife has an interview tonight, so we’ll see if she finds something extra on the side as well.

I got another credit line increase with one of my paid off credit cards. I’ve been hesitant to cancel the cards, because I’d really like to get into a house before I start messing with my credit, and I’ve got the self-control not to turn back to the cards. Its absolutely insane that I have as much credit available to me as I do – I could buy a small house purely on credit.

Anyway, on to the October goals… There should be some extra income for both of us, and we have 5 weeks worth of time to reduce debt. This means that our goal should be somewhat easier than September's. I’m going to put it down that I want to cut our credit card balance on the American Express by more than a third this month. Starting with $5,802.24, I’d really like to see our balance drop below $3,400 this month. Somewhat aggressive, but we should be able to beat that if both of us are working extra. Last month, we would have paid off just over $2,000 had we not spent that extra $700, so with an extra week, we should be able to get close to $2,500, without any extra work. If we are trying to get the AmEx paid off by the end of the year, this will put our goal to just $1,700 in November and December, which should be easily achievable goals.

The Common Sense Fix

For those of you following the Congressional bailout for Wall Street, check this out:
Dave Ramsey’s Common Sense Fix
The dude is right on the money on this one, in my estimation.  Write your Senators and your Representative and let them know.
If there was EVER a time to let them know what you think, now is it.

EDIT: He even mentioned on his radio show today that this isn't his idea, its just that he has a "pulpit to preach from" on it...

Fourth Week of September Update

Well, I had forgotten that I was going to be out of town part of this past week, so I was away from blogging and just about everything else on Thursday. So this is a couple of days late, but better late than never, eh?

Our balance on the American Express card starting the week was $6,118.24. We had a payment on the other card come due, and with my trip out of town, there were a few miscellaneous expenses that ran just a little higher than if I'd stayed home, so we were able to make some progress, but we still fell quite a bit short of our goal, which was to get the AmEx down to $4,600. Our current balance is $5,802.24, a full $1,200 less than what my goal was. True, we did have the extra $700 worth of expenses this month that would have allowed that balance to drop even more, but it would have been nice to at least within $1,000 of our goal. Perhaps I set it a little aggressively.

Still, we paid off $1,309.83, and that works out to about $43 per day. Not too bad, but it could have been better. We would have just broken the $2,000 barrier if not for the $700 worth of expenses, so, all in all, it was a really good month. We are within a week of having credit card debt under $10k, and I'm VERY excited about that - I can't even remember the last time I only had $10k worth of credit card debt. It must have been at least five years ago.

I'm excited about the progress being made, but am so very ready to be completely debt free. The cards will be a major part of that, since I see them and the student loans as being the only "bad debt" that we have.

My Debt Reduction Strategy

Jim over at My Debt Blog asked me on one of my September updates what our strategy is going to be for paying our debt down.

Here is what I am currently thinking about:

The credit cards are getting absolutely pounded, and should be dealt with by Summer 2009.  That will leave student loans and two car payments.  One of the car payments is at 0% interest, so we are just going to let that one pay out as it will.  By August ‘09, I’ll have 3 years left on it.

The truck payment will be the lowest balance left, but the student loans will be the highest interest rate (and balance).  At this point, there may be a pregnancy involved, so our current plan is to just start piling up cash.  Once I get a good emergency fund going (somewhere around $12,000), I’ll probably re-assess where we are, and go from there.  One direction I’m considering is attacking the student loan after the credit cards and emergency fund, since it is the largest financial drain on our finances (interest-wise).

On the other hand, I could eliminate a car payment by paying off the truck, then drop the Comprehensive & Collision insurance I have to carry (or at least raise my deductible), and trim the amount of money going to insurance.  This will also allow us to add another $200 or so per month to our student loan reduction.

At that point, barring a change in living circumstances (no house, no pregnancy, no increase in rent), we will be able to lump over $900 per month against the student loans, paying them off in about a year and a half.  When the student loan is paid off, there will be an avalanche of less than 6 months, and we’ll be finally debt free…

This Just In!

Got a call today for going to interview to work at Wal-mart on evenings and weekends, at least through Christmas…  Everything I earn there can automatically get thrown against the debt.

I’m not going to place too much on this, but that should also help lower our grocery/consumables budget with any employee discounts I would get…

It will be rough going for a few months, but I believe it will be well worth the sacrifice.

The Blue Card from American Express

I noticed something the other day on my American Express “Blue” Card statement.

A while back, I got a very low interest rate, and the rate was good for the life of the loan.  I had about $300-$400 on that card already, but went ahead with the transfer.  By January of 2007, the balance was just over $10,000.  Today, it is just over $6000, meaning that I’ve paid over $4,000 off the card in the past 20 months or so…

I looked at the individual balances on the two lines of credit, and nearly $700 is on the higher rate.  Not only has that amount not dropped, it has almost doubled!

I looked again, and saw what was happening.  Every statement, they assess interest charges.  The charges for the interest get applied to the line-item.  When I make a payment, however, I don’t pay the interest charges, I only pay down the lowest interest item.  So every month, my “great rate” credit card gets just a little worse off…

So definitely be on the lookout for those cards that advertise low interest rates, and be sure to see how they apply your payments.  Does the payment get applied to all loans equally, or does it go against the lowest interest?  Do you pay the interest off first, and then the rest is applied to principle, or does it hit your balance first?

These are important things to know, especially when you decide to transfer a balance to a card that already has a balance.

Third Week of September Update

Well, good news is, we recovered from the previous weeks, and are back on track, but the entire process took a week longer than expected.

All in all, we were able to reduce our debt a little more than last week, but not by much at all...

We started the week at $6,358.24, and now our balance is $6,118.24, just $240 lower than last week.

So, since the beginning of the month, we've paid $993.83 off the American Express.  Next week will signal a fairly decent decrease, and should reduce our debt by at least $300 more.

During August, by week 3, we'd progressed $1,531.94, so we are running about $540 behind where we were last month, but we also had an extra $700 worth of expenses that were out of the ordinary, so we would actually be about $150 ahead of last month - which is pretty encouraging, in spite of not really feeling like we are accomplishing much.

Also, October hails a 5 payday month, so we should be able to recoup some ground there.

With as much as is happening in the financial news around the nation, I really wish I had more time to put thoughts down, but work has me absolutely swamped.  That coupled with everything else really has me out of the loop.  Although, if all I have time for is chronicling my climb out of debt, then I really have fulfilled my original purpose for this blog.

We aren't there yet, but we keep pushing closer.  And every step makes the next step that much easier.

Want a chance at extra moolah?

Out of Debt Again, one of my first, if not the first, readers of my blog has decided to have a contest and offer a few prizes in celebration of her one year "blogoversary"!

So head on over there and check out her site (its full of tips, tricks, and life), and enroll in her contest (ends September 27th)!!

Second Week of September Update

Well, there is some good news – the flat got fixed at Discount Tire for $0.00.  Zip, zero, zilch, nada!  Another tick in the column of why I don’t even bother to shop around when I’m looking for tires.  They have my business, and it isn’t worth saving $20 or even $30 a tire somewhere else after the level of service I get from those guys.

And the rear brake light was a $5.00 bulb/installation, and the inspection on my wife’s car went through without a hitch after that got fixed.  So, all in all, we spent about $45 that day, instead of the $500+ I was expecting.  I still need to get new tires on my wife’s car, but they’ll last another month or two, and give me some time to save up for it.

As to the debt-reduction progress we made this week, I accidentally sent a $75.00 payment to the wrong credit card, so we dropped our total balance, just not on the one that I wanted to drop.

So, we started the month with 7,112.07 on the American Express.  Last week, we dropped it to 6,590.24.  This week, the balance is $6,358.24, meaning we paid $232 this week, or just over $33 per day.  Our monthly total is still over $750, but to make our goal of just over $2,500, we’d need to have at least $1,250 paid off at this point (probably more than that, actually, since I get a vehicle allowance check at the beginning of the month, over and above my regular salary).

So, while we haven’t been completely shut down by the extra $700 worth of expenses we encountered so far this month, it has slowed our progress considerably.

My wife has some side work this evening, and she worked a little more this week than last week, so we’ll see how much we can reduce our debt next week.

September 11, 2001

I’ll return tomorrow with an update, but I’m taking a break from my personal finance blogging today, and encouraging all Americans to remember.

Never forget!

When it rains...

So I posted my latest post, and less than an hour later, I got a call from my wife...  Turns out she had a flat.  So now we get to deal with that tomorrow morning.  And the rear driver's side brake light.  And the inspection.  On both vehicles.

double blah.

cherry pits don’t taste good.

Today, I’m very bummed. I was pretty bummed last night as well. First of all, its a fairly dreary day with the rain, anyway. But a call I got this morning didn’t help much.

The home builder denied the request to refund even part of the $500 in earnest money. Apparently the lender that sent the pre-qualification over didn’t paint as black a picture for the builder as he did for me. I like the builder, I think they are fair, and do a good job, but I think they have a mortgage lender they work through who is either a flake or a crook. I’ll definitely be using my own guy for our mortgage, whenever the time comes.

The check for the refrigerator hit this week, and the the earnest money hit last week, so that’s $700 in expenses that I wasn’t really anticipating slowing my progress this month. I still feel that I got a good deal on the fridge, but if I’d been thinking about it a little more, I might have passed over the opportunity to get it. Still, what’s done is done.

As it sits right now, we, in a backward sort of way, have a $500 incentive to purchase from the home builder now (I was at least informed that they wouldn’t double-charge me the earnest money, for a while, anyway). Still, though, it sucks that I just didn’t learn my lesson fast enough on that one.

The whole deal is really throwing me for a loop. I haven’t gotten a call back on the evening/weekend positions I was trying for, and my wife hasn’t heard back from anybody, either.

So, raising our income doesn’t seem to be doable at this point, and we’re stuck in this rut of making a little progress, but it just doesn’t seem to be going fast enough. I’d like to call a “re-do” on my finances from the time I turned 17.

what an absolutely depressing day.

bleg.

First Week of September Update

About the only good thing with this week is the fact that it was so short.  They cashed our earnest money check, so that dropped our debt reduction by $500.  Hopefully, they cut us a check for at least part of that, since we really didn’t get far in the process at all.  I’m not questioning the decision, just bummed that I got $500 ahead of myself on the deal.

So, on to the progress made this week.  We started the month with $7,112.07 on my American Express.  Interest hit on the first of the month, so with the payments I sent in, we are now at $6,590.24, or $521.83.  So, if the earnest money hadn’t been spent, we would have gotten through the first week reducing our debt over $1,000.  I’m half tempted to just float the earnest money among other accounts, or as part of our emergency fund, just to really get to dropping the balance on the card.  Still, since I’m counting last Thursday as the first day in September, we were still able to reduce our debt by $74.54 per day.  Not bad, but I would have liked to do better.

“Playing House”

There was a guest post today over at Get Rich Slowly.  I love that blog, because there’s always good content there.  Anyway…

The post had to do with the process of preparing to buy a home.  Eventually, I would really like to own a home, and my wife would like to see us move into a home sooner rather than later, but the preparation has to be there as well.

One of the things that stuck out from what Jim had to say was to “play house”.  Set aside what you think you can afford every month and live off the rest, sticking that amount in a savings account to help with the down payment.  That way, you can tell whether or not you can actually live with the payment before taking the plunge.

I’m doing that, in a way, right now.  Except that rather than socking it away in a savings account, I’m using the money to hit the debt.  Plus everything else that we get, everywhere we can scrimp, all of it is going against the debt.  I think, however, once the credit cards are paid off, I will be adjusting my strategy just a bit.  I think I want to increase my emergency fund, and begin the process of saving for a down payment on the house.  Of course, I still want to attack debt with intensity, but I think that ridding ourselves of credit card debt is the main goal, and the other debt, while not “good” debt, isn’t as harmful/detrimental.

What do you think of the plan?  Am I looking at the debt (other than credit cards) with too kind an eye?  If you currently rent, at what point (if any) do you plan on buying?  If you own, did you “take the plunge” at the right time?