How Did We Get Here?

Most of my posts of late have been detailing the measure of success we have had eliminating our credit card debt.  Today, I want to focus not on the progress we are making, but how we got to this point.

When our process started, my wife wasn’t working hardly at all  (part time retail).  We made all the minimums, but not much more than that.  At best, we threw an additional $100 each month against the cards.  Then several things happened…  First off, we moved from a $750/month apartment to a $680/month apartment.  The added benefit to this was that it was about 10 miles closer to work for me, and it was a newer complex, with smaller square feet.  End result:  It was much cheaper to live there than in a larger, less efficient apartment further away.  Rather than adjusting our lifestyle up, we adjusted down.  Then, every time I got a raise or a bonus, We treated it as an opportunity to put more money against debt.  No major lifestyle changes were allowed.

One of the pitfalls we fell into along the way was when my wife got a full-time, but temporary, job making pretty good money.  We adjusted our lifestyle a little to allow for her working.  We had a weekly trip to Cracker Barrel on Saturday mornings, and we ate out at least one other time every week.  We bought a new TV, which was a GREAT deal, but it still slowed our progress.  We bought a new computer.  All of these things added up, not adding to our debt, but merely slowing our progress.  The amount of progress we are making now, we could have made back then, but we lacked the commitment.  We were committed to getting out of debt, as long as it didn’t hamper life in any way.

That changed earlier this year.  My dad passed away, and I saw the shortness of life, and how important it was for him to have spent his last few months with my brother, still at home, and my mom.  And what I saw was that, as long as I didn’t commit wholeheartedly to getting rid of my debt, I would be forever stuck in the cycle of paying on debt, and halfway living life.  I don’t want that for me, or for my wife, so the cycle had to stop.  Focus was what we needed, and intensity.

This blog has been one of the most important resources to keeping the intensity.  The fact that I have readers who watch our progress keeps me motivated to make progress.  My wife has been 100% behind me and continuously encourages me to keep intense and focused on eliminating our debt.

Those two factors are probably the reason why we are as far along as we are.

Over the next few months, given the recent news, I’m sure that our focus will shift.  One thing that will happen first, however, is that the American Express will get paid off.  As much progress as we’ve made on that card in the last two months, I think the biggest motivational move is to be completely done with it.  I would have liked to be completely out of credit card debt before a pregnancy, but we are very, very close to the end of it now.

The Game-changer

This morning started as any other morning in our little apartment.  The cat napped around us, and then, at about 5 in the morning, decided it was time to wake us up.

My wife got up, and I followed soon after.  The thing that was different about this day was the positive result from the pregnancy test that she took.  We are going to have a baby!

Of course, she will take another test in about a week, just to be sure, but the tests are 99% right, and almost never show a false positive, apparently.  As well, there are several other indicators conveniently explained by pregnancy, so we both feel the test result is right.

This means that our current plan to pay off debt may change somewhat.  Of course, it is never a bad thing to pay off debt, but we don’t want to just return to the place we just came back from.  So I am in the process of thinking through what we will do, and what our plan will be.

Dave Ramsey’s plan would entail paying nothing but the minimums on everything, and immediately begin stockpiling cash.  I really believe this is a good plan, but I also really, really want to be done with the credit cards, so my current plan is to stick with paying the American Express off, and then re-evaluate from there.  We are only talking about a month from now before the AmEx is paid off anyway, and that should give us enough time to really think through what we should do.

All in all, not a bad week.  Anniversary, got the AmEx below $3,000, and found out we were going to have a baby.  Life’s not so bad…  :-P

First Week of November Update

Well, the first week of November has hit, and our debt reduction wasn’t nearly as impressive as the second week of October, but we should see a much better second week due to the extra paychecks from our secondary job.

This week, we paid $480 against the American Express, but our bill came due as well, effectively cutting our progress to $463.39.

We started the month with a balance of $3,249.69, and we are now sitting at $2,786.30, leaving us with $1,636.61 left to pay to reach our goal.  We are still on tap for paying off the AmEx by the middle of December, and by next week’s update, our total debt will be under $45,000, meaning that we will have paid off over $33,000 in under 22 1/2 months.

I know that updates have been scarce lately, but time has been as well - as you can see, we are hitting our debt very hard, so free time is more of a luxury and not as available as either of us would like it to be.

We did end up spending some money over the weekend, since we had our second anniversary, but we had put money aside for it, and the two meals easily cost less than a trip would have.  We still spent less than $300, so all and all, we are happy with that.  Besides, we were ready for a break, and needed something to just go crazy on, without hurting our budget.

Election Results

Google is attempting to provide a gadget that provides live updates on the election results…  Below are is the available chart, complete with Presidential, Senate, and House race viewing options, updated in real-time…

November Goals

As you know by now, my main concern is to get the American Express paid off by the end of the year.  December is always a more expensive month with all of the Christmas “extras” that come up, so I want to pay down as much of the AmEx as I can in the month of November.

I have cut down my availability at WalMart.  I’m just not able to keep up the pace, and am feeling continually tired and on the verge of collapse.  I will no longer be working on Saturdays, so that should give me some “recoup” time.  The flip side to this is that I will only be available to work one 8-hour shift per week, so I expect that my hours will drop, possibly even significantly.  With two paychecks in November, I don’t want to set the goal too high.  At the same time, my wife should have two (possibly three) paychecks from her second job as well, so that will help there.

We are back down to a 4-week month, so I am setting the goal to have debt paid off as following:

• $600 from my primary job
• $800 from my wife’s primary job
• $300 from my secondary job
• $400 from my wife’s secondary job

That means that our goal is to pay off $2,100 this month.  That will leave less than $1,200 for December, and should be easily dealt with, even with the added stress of the holidays.