Still Plugging Away...

I'm updating this blog for the first time in about 6 years.  In that time, several things have happened:

1. My son has gotten about 6 years older.
2. Our non-medical debt has dropped, albeit not extensively.
3. I have a just over 2-year-old daughter.
4. Our medical debt has skyrocketed.
5. Our income has increased.
6. We have a health insurance alternative in place.
7. Our income has decreased.

My income was hovering around the $55k/year until last year, when it increased to just over $60k.  In January 2015, my income was hovering closer to the $65k mark.  Then, in July, I was told to cut my hours back from about 55 hrs/week to no more than 45 hrs/week.  We are now existing on take-home of about $1,200 less per month than previously.

As a result, I'm updating this blog again to get motivated, and to make sure that I'm on track for actually decreasing the debt we've gotten into.

If there is anybody out there still listening, drop me a comment, and I will answer any questions in future blog posts.  For now, I'm putting together the information to track my progress, and am going to get into the habit of at least doing my monthly updates again.  Tips, tricks, and the detail of my climb out of debt, even after a few mis-steps, will all be chronicled here.

I'm just looking for that smooth, round stone right now...

A New Month

September ushered in, seeing several new medical bills come in, as well as the slide into over $12,000 again in credit card debt.  I am determined not to let the credit card debt pass the car debt we have, which means that I’ll need to make at least $340 worth of payments against credit cards over and above the interest charges to stay ahead.  Is it doable?  Possibly.  The medical debt is now made up of 7 bills, and so far, only one of those bills has a monthly obligation.

I am really hoping to send a few dollars in on the medical debt, but put the bulk of my debt reduction against the credit cards.  Once the credit cards are dealt with, then we can begin the process of paying off the medical debts.

It is a very long road we have begun to travel on, and we started our journey at a time when, for many people, drastic measures are required just to keep afloat.

I have begun the process of rebuilding our emergency fund, and am very slowly but surely making progress there.  We are within just a few dollars of getting to 25% of our $1,000 goal.

Hopefully, this month will see us better off than the past two have, at least in regard to everything except medical debt.

We’ll see, I guess.

I gambled, and I lost. Big time.

I was 100% focused on getting out of debt.  I admit it.  Several times, I was given the opportunity to change some things, but I didn’t want to spend the money, and detract from the pace at which I was eliminating my debt.

But a house and a baby are big detractors, anyway.  And I failed to make those connections.

We have no insurance on my wife, and no insurance on the baby.  So we are paying all of these expenses out of pocket.  To make matters worse, my wife had an eclamptic seizure on Monday afternoon, something that happens in only rare cases after the birth.  An ambulance ride, 3 additional nights in the hospital, and thousands of dollars later, I arrive at the end of this week not really knowing where to go from here.

The baby had already run up costs significantly, so our return to the hospital put an already drastic situation into dire straits.  We will, of course, be negotiating with the doctors, the hospital, and everybody else that comes running to us for money, but, at the same time, it appears that we will also be making drastic lifestyle changes in the coming weeks.

First thing on the list, though, is to get through the current crisis.  Wife and baby are fine, but this process can take 6 weeks to work through.  Thankfully, they are both at home, and most of what needs to be done is simply rest & recover.

I don’t know the damages yet, and it could be months before all of this gets figured out, but there will be a major revamping of the family finances, for sure.

I am not complaining.  There is no question in my mind that whatever sacrifices I must make are worth it, because I have my wife and baby.  And, in the big scheme of things, that’s really what matters.

Well, that pretty much settles it.

Our budget has been blown.  Completely, totally, and without hope of recovery (fast, anyway).  We had our baby, but there were some complications.  I still haven’t received all the doctor’s bills, etc., and the way that payments are done now (at least at this hospital), there is no sending the proverbial $25/month to the hospital for the next 36 years to pay it off.  They said I could either put it on a credit card, and they would give me a discount (about 70%), or they could allow me to send in whatever I could, but it would be for the full amount, and at 18% interest.  So I slapped down my credit card, and was happy that I’ll only be paying about 15% interest.

I will probably suspend updating for a while, at least until I somewhat recover from the reeling I’ve done over the past several days.  Emotional decisions are never good (at least, that’s been my experience), so I want to let things calm down, and allow the logical side of my brain to start functioning again before we get too far down the road.

I will keep updating the debt and savings charts, just to keep myself on top of where we stand, though.

c'est la vie.

Term Life Insurance

I recently bought a term life insurance policy, and, in the process, learned some very good things about how it works, and how I should plan for it.  Listening to Dave Ramsey, the Primerica agent, and several others talk about insurance has helped me develop my own plan for term life insurance.

Some recommend 8-10 times your annual income as the determining factor in insurance (this, I believe, is a simplified version of Dave Ramsey’s approach).  While there is nothing inherently wrong in this approach, and it keeps things extremely simple, there is no real room to tailor the policy to your life, and so you just end up with a random amount of cash, arguably able to cover your family’s living expenses for 7-10 years (depending on the additional cost of the funeral, etc.).

Before we get into evaluating the factors I took under consideration for determining how much and how long my insurance should cover me, there are several things to keep in mind:

1. Life Insurance should cover your spouse and children in the case of your death.  At the point of retirement, my income will be (ideally) passive, so I don't need to plan for term life insurance beyond retirement age.  In most cases, this means having a policy that will be effective until age 60-70.
2. The younger a person is, and the shorter the term, the lower the cost will be for the policy.
3. Health makes a huge difference in the price of the policy.  If you are a smoker, or have a family history of cancer/heart problems, your policy will cost much, much more.

So with these thoughts in mind, I used the following factors to determine our plan:

• I am 35 years of age, leaving me 30 years to retirement.
• We just purchased a house, with a 30 year mortgage.
• I anticipate being in non-mortgage debt for less than 5 years.
• My wife is pregnant with our first child.

These factors played heavily on the length and amount of insurance that we purchased:

1. In the event of my death, my wife would need enough money to pay off all debts (including the house), plus have enough to live on for a while (5 to 10 years) so that she would have some time to begin generating an income.  Eliminating the house debt lowers her income requirement significantly, giving her an easier path to supplementing the income.
2. In the event of my wife’s death, I would need enough money to provide care for our child, in addition to the money I already make.
3. In 10 years, neither of us will have any kind of consumer debt.  Also, our income should be higher and our living expenses lower (inflation adjusted) than they are today.

Bottom line, we settled on a 30-year policy that had enough coverage for me that it would wipe out all debt obligations, pay for the funeral, and still have about 10 years of living expenses, if something were to happen to me tomorrow.  (Of course, as time goes on, our debt will be smaller, but there may be more dependents, so I decided on a single 30-year policy).  For my wife, we decided on a policy that would pay off the mortgage, cover burial, and take care of child care expenses for about 5 years.  We didn’t find it necessary to cover the consumer debt on her policy, since I am the primary wage earner.

Had our circumstances been different, what we settled on would have been different as well.  Instead of having no insurance in place, it would have been wise for me, in my 20s, to purchase about a 10-15 year policy covering all of my consumer debt, paying for the funeral, and a little extra.  Once I got married, I should have purchased a policy for my wife (and revised mine), taking my wife’s situation into account.  Since she brought her student loans into the marriage, and I brought my credit cards and vehicles in, we would need a policy that paid all of that off (plus a little).

Those policies are relatively cheap, because the amounts are not usually very high, the terms are short, and we were younger.

Now that our age and level of responsibility has increased, it was time to purchase a policy that would at least financially take care of our debt obligation.

Naturally, the policies now cost more than they would have when we were 10 years younger, but they would not have carried us all the way to retirement.  In the same breath, I did not want to purchase a policy that would cover us, but would seriously impede our ability to reduce our debt.  If our standard of living changes, I will probably re-evaluate and either change or add to our policy.  (Given inflation the way it is, and just the general tenor of things, I doubt I’ll ever decrease our coverage)

So, in summation, the way I picked Term Life was not based upon income, but expenses.  Rather than looking at life insurance as a replacement to income, I view it as a way to weather a storm.  A strong storm, to be sure, and one that I hope neither my wife nor I have to face.

Flexibility is Key

My wife and I have a cat.  This cat is just over a year old, but loves to play.  My wife was letting the cat chase a stick with feathers and a bell on the end of it the other day, and brought the stick up close to my chair.  At that same moment, I turned to ask her a question, and the cat was in mid-air within inches of my face!  Through some miraculous act of flexibility, the cat seems to turn in mid-air and avoided hitting me in the face.  She then ran out of the room like a scared rabbit, and calmly started cleaning herself in the the living room, as if nothing in the world had happened.

I was laughing so hard about it that I had trouble staying in the chair, but later got to thinking about it.  The cat has the ability to overcome difficult situations due in no small part to her flexibility.

That’s how I’d like my finances to be – flexible, and able to turn in mid-air.  Right now, my finances aren’t very flexible.  I’ve got a set amount that goes out every month – set expenses that drive what we do, and very much limits our discretionary spending.

So if my goal is flexibility, then, how do I attain that?  Obviously, having money provides flexibility, but, then, so does not having expenses.  In the short-term, having money will provide flexibility, but longer term, not having expenses is what will provide the most flexibility (at least in my mind).  Even if I have a hundred thousand dollars in the bank, if I’m spending $5,000/month, I’m only good for about a year and a half.  If I’m only spending $2,500/month, I’m good for almost 3 and a half years.  But the added benefit is that I get to a year and a half earning (and paying taxes on) half the money required in the $5,000 scenario.

With that said, my goal towards paying off debt is shifting slightly.  Rather than focusing on the credit cards and emergency fund (worthy goals, to be sure), I am going to focus most of my discretionary debt reduction towards paying off the Ranger, because that relieves me of a $200/month payment, and reduces my monthly payment obligation by about 13% (including only debt service – mortgage, student loan, car, credit card, and truck).  That’s a pretty good pay hike, especially these days.

Thursday Update: 1 Day Late Edition

This past week, I found out that I was in charge of doing the campaign video for our church’s new building – which should be exciting to do, but is going to require a lot of work – especially since the video will be played the weekend after Easter.  So all intents on getting an update done over here yesterday failed.  I spent most of the evening working on pictures, listening to the theme song, and storyboarding.

But, progress was still made this week.  We haven’t gotten our taxes done yet (they are ready, just not submitted yet), but we did get our first house payment mailed off.  It will be very interesting to see how the next few months play out as we settle into the groove, but I think when all is said and done, we’ll be in a much better position at the end of the year than we were last year.

Once our finances settle down from the move, I’m going to be able to update this blog more frequently, and with better content (hopefully).  In the meantime, be sure and follow me on Twitter (see the link over there <---), and stay tuned for further updates!

Update Thursday: Too Long Gone Edition

I really need to get back on track with churning out the Thursday updates, if only to help spur me on to further accomplishments.  It has been pretty depressing to see our money go out the door to things other than debt reduction, especially after making such progress in the final months of 2008.

I do need to remember that I was working two jobs vs. the one I am working now.  Add to that the fact that we now are in a house vs. an apartment, and suddenly I begin to see clearly why we aren’t making any progress.  Then throw on top of that the fact that we are having to make purchases and sock away money for the pregnancy, and I begin to be surprised that we aren’t any further in the hole than we currently are.

The filing of the income taxes will help significantly, as we should be able to finish paying for the pregnancy, pay off the credit card, purchase the needed furniture, and still have enough left over to re-fund the short-term emergency fund, and set a little bit aside for the big emergency fund.

I’m ready to get that taken care of, if only to get back on top of our budget and really focus on some of these expenses.  Part of my solution was to run through our budget and begin to trim any unnecessary fat out of it.  I have been putting $3/week towards my XM Radio subscription.  But they are about to go up on prices and their books don’t look real promising anyway, so I cut it off.  True, it makes less than $200/year difference in our finances, but it is something that we can live without, so we are going to.  My goal this week is to go through the budget and begin to realistically attack the fat in it and free up some more money.

Catching Up

Many things have happened since my last “real” blog entry.  I wanted to get some things to settle down and be solid before I really posted anything.

The most significant thing that happened was that we bought a house!  We are very excited about this, but it comes with some trepidation as well.  The monthly payment is well within our means of handling, but there is a lot to a house that isn’t always obvious at the beginning.  The little expenses haven’t really let up since we got in the house, and by now, most of my “extra” savings has evaporated.  This will be a real test of my commitment to only buying things as we can afford them – I put over $1,000 on the credit card this past month, just in miscellaneous expenses (solar screens, blinds, water hoses, sprinklers, curtains, tools, etc., etc., etc.).  Fortunately, I had enough money set aside that none of this will stay on the credit card, but it does squeeze down the amount of money that I had set aside for the pregnancy.

We will get there, but the discipline needs to start now so that we don’t fall back on the credit cards as a means to survive.

I’m hoping to have enough time to sit down in the next few weeks, and get a budget filled out that will be fairly accurate.  As a result of all these expenses and not knowing exactly what our electric, gas, water, and garbage bills will look like, we’ve decided to hold off on getting internet access at the house.  This has been particularly hard on my wife, since many of her friends are spread all over the globe, and online is how she keeps up with them.  On the other hand, it has given us some real opportunities to get things done, rather than spending the time online.

Of course, through the middle of all this, President Obama signed the ARRA into law, meaning that we will qualify for the $8,000 credit as first time homebuyers.  I have mixed feelings about this, because I’m against the philosophy of allowing the government to finance my life, but, at the same time, the money could come in very useful.

We passed the halfway mark for the pregnancy, which serves as a continual reminder that baby expenses are not far off, both birth and ensuing expenses.  In this economy, I am sorely tempted to go back to work with a part-time evening & weekend job to help pay for all of this.

Fortunately, my wife is still working part-time every week, which should allow us to get caught up on everything within the month.

Over the course of the next few days, I’m going to add the mortgage to my debt picture, but I think I’m going to leave it out of my “Overall Debt” figuring, since, although my goal is to be completely out of debt eventually, the current goals are the elimination of the credit cards, student loans, and vehicles.

Insurance Premiums

Remember to shop your insurance premiums on occasion.  I have been with GEICO for nearly five years…  I like the company well enough, but have had ZERO claims in that time, so I haven’t “seen them in action”.  They may be a great company to deal with when you have an accident, but I continually hope that I never have to find out how good or bad the insurance company is…

Anyway, I have a friend who is an independent agent, and when we bought the house, I decided to get him to quote the house insurance for us.  He asked if he could quote the two cars as well, and I told him that would be fine.  He looked at our limits, and decided to double them.  Then he added car rental on.  My thought was that everything he was doing was just going to end up convincing me to go somewhere else…  The quote came in, and it was less than $300 a year more than GEICO.  Except that included the house, whereas GEICO was only on the two cars.

So I called up GEICO to see what they could do.  I told them I got a better rate for twice the coverage, and the quote for the insurance on the house sounded very reasonable, but I wanted to see what they could do.  They informed me that because I’ve been a customer for nearly five years, I would be eligible for “Accident Forgiveness”.  Meaning that if I had a wreck, my insurance wouldn’t go up.

Huh.  wow.   I mean, really?!?  That’s all you can do?  Why would I want to pay about $500 a year MORE money for half the coverage on the off-chance that I file a claim and be protected from my insurance would going up?  Chances are, even if I filed a claim, it wouldn’t jump that high…  And even if it did, I could always go back to the level of coverage I was getting before the change!

So, lesson learned.  Who knows how long I’ve been paying out the nose for insurance, just because I never got them to re-quote me.

Moving…

My posts of late have been, well, nonexistent.  We are in the process of moving from the apartment to the house, and, honestly, my debt reduction and savings have been replaced with getting this little thing, or incurring that expense, etc.

I am hoping, by the middle of next month, to settle down into a routine.  I would like to get back to fighting debt, as well as saving up for the baby.

The $8,000 First-Time Homebuyer Credit that was included in the ARRA will help us out by getting some things set pretty quickly after we file our ‘08 taxes, so I would like to get that done by the middle of March as well, and hopefully have our refund in hand by April 15th.

I’ll try to keep the blog updated, and by next month be in a bit more of a groove as far as the updates go.

The Inauguration wasn’t the only change…

I don’t want to bore you with the lack of progress I’ve made against my debt by doing an update – basically, everything has just been stored up in my checking account as we prepare to move on to the next stage of our life.

The pregnancy has a good chunk of change stored away for it, and, hopefully, the extra I’m saving up won’t be needed.  If it is, then that’s what the fund is for.  I don’t know that I’ve ever had as much cash in the bank as I have right now.  I’m not counting very much towards my emergency fund until after the baby is born, just in case the money is needed.  Once the baby is born and all the essentials are taken care of, then I’ll probably move the money to a MMA or something to separate it from my everyday finances.

Our lease is ending on February 28th.  This makes our second year at these apartments, which isn’t a bad deal, but there are several problems that keep recurring that aren’t taken care of, even though we’ve mentioned the problems.  So we are moving.  The question was:  where?  I decided that if my wife is pregnant, we might as well go for a bigger place while we are at it.  Upgrading the apartment size and quality was the least I felt we should do.  Spending more money per month on rent, while slowing our debt progress, is definitely doable, especially considering the amount of progress we have made.  Budgeting the amount for a nicer, larger apartment put us about even with a decent house payment.  This led me, once again, down the path of buying a house.  Sure, we’d end up spending a little more each month, but it would be ours.

So that’s what we’ve decided.  We are buying a house.  The house has been located, and the interest rate has been locked (5.25%).

I understand that buying a house while in debt is unacceptable to most PF bloggers, but I also feel that there was more to the equation than simply finances.  It was time to begin thinking a little further into the future, and not be so focused on the present that I end up aggressively paying down debt vs. doing what I feel is best for my family.  Don’t get me wrong – a majority of the time, the aggressiveness I’ve shown in paying down debt has been the best thing for our family.  I just feel that the priorities have shifted a bit with the pregnancy, and I’m adjusting our lives to re-align around those priorities.

I know that in this single blog entry, I’ll lose most Dave Ramsey fans – and I know that this is not something that he would do – in fact, he would rail against it.  That’s ok – my purpose of this blog is first of all to have a history of what has happened in my debt-reducing life, and this is part of it.  Of course, I’ll have to add another row on my debt reduction scheme, but, in the end, I feel that my family is better served by this than by spending about the same amount of money on an apartment and having nothing to show for it.  (The mortgage will actually be less than I what I could get an apartment for – the taxes and insurance put me about $100/month more expensive than the apartment  With the tax deductions and exemptions that I’ll get, it might end up being about the same.)

So that’s the big news of the past few weeks.  We have another two and a half weeks until we close, and at that point, we will really have a lot to do.

50%!!!!

Today, we hit 50% of our debt paid off…  took us 739 days to get to this point, but we did it!  Sending the final $300 to get us to that point was well worth it!

We have significantly slowed our progress for the time being – choosing to work on building up our accounts and get a better emergency fund in place, but even that hasn’t been as fast as I would like – I got used to my second job’s income, which isn’t there any more, and my wife went back to work this week on Wednesday, after being off for two and a half weeks, so we’ve been operating on a single income this year.

End of Year 2008, Goal Setting 2009 Report

Well, it’s the beginning of 2009, so, to commemorate that, I’ve decided to set down exactly what we accomplished in 2008.

During the course of the year, the credit cards were our biggest focus.  We eliminated all the credit cards, with only one exception.  Here are our numbers:

Credit Card Debt:  $2,281.00
Truck Loan:  $8,217.62
Student Loan:  $13,953.26
Car Loan:  $15,299.68

Our total debt, in two years, has dropped from $77,962 down to $39,752.  That means that we’ve made just over $14,000 worth of progress against our debt in 2 years, so just a little over $1,000 per month.

Here are our goals for 2009:

1.  Pay off the final credit card
2.  Build an emergency fund of $10,000
3.  Move
4.  Have a baby
5.  Get a will in place
6.  Get term-life insurance in place

Right now, those are our objectives, although, not necessarily in that order.  There is also the possibility of consolidating the remaining loans into a single loan at a better interest rate/payment (although, the Student Loan is the only one left with an interest rate over 6.0%)

It is definitely going to be an interesting year, with the combination of the economy and the personal life changes…

Fourth Week of November Update: Thanksgiving Edition

Well, it is done.  Three thousand two hundred forty-nine dollars and sixty nine cents later, we have PAID OFF THE AMERICAN EXPRESS CARD!!  This was the card with our highest balance, over $10,000, when we started this process less than 2 years ago!

We have so very much to be thankful for – in a time of economic distress around the country, we were able to hold down two jobs each and totally blow away our goals and completely pay off a credit card!  We now have less than $4,500 worth of credit card debt, and have less than $43,000 combined.

With the wife pregnant, and her second job disappearing, I expect that our last 4 debts will take a while to knock out, but it is worth it to just get rid a card that I have carried a very high balance on for over two years.

We beat our goal this month by over $1,200, due mostly in part to our secondary jobs making more than anticipated.  Probably sometime after Thanksgiving, I’ll write down our December goals, but I can already tell that it isn’t going to be near as aggressive as November was.

Stay tuned & Happy Thanksgiving!!

More Changes…

Well, my wife put in her notice at her second job, so she’ll be done the day before Thanksgiving.  I think that will allow us to pay off the AmEx before her checks are finished coming from that job, and it was only an extra $150/week, but it does slow some things down.

You will notice that we almost got within $100 of our goal for the month this week, meaning that next week’s checks are mostly gravy.  We would have beaten it this week, but I re-arranged our finances to go ahead and start allocating money towards the pregnancy, rather than throwing everything at the debt.  I only pulled back a little, though, so our AmEx should be taken care of by the second week in December – still an accomplishment in itself.

I’m getting very tired, and really look forward to the time that I don’t have but a single job again, but I know that pushing forward and really dealing with our credit card debt is going to have us going into the new year in a much better position than last year was…  And don’t get me wrong, in this day with the economic downturn, weakening economy, high unemployment, etc., I count my blessings – I’m just ready to quit paying “stupid tax”.

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

Count the Cost

This week is slated to be a better week than last week was.  If all my payments hit on time, we’ll make almost twice the progress of last week, and we have a whole extra week to keep paying down.

I’m beginning to adjust to the new work schedule.  Its rough, and has me extremely tired, but if I can just continue to tough it out, then it will speed our process of eliminating credit card debt.  But how much will it speed the process?  And at what cost?

One thing that I didn’t take into account with the extra jobs was extra expense.  I immediately assumed that all monies earned could go directly against the debt, which is, in fact, false.  Due to our schedules being so packed, we are spending more on food because we are eating out more.  We are also spending more on gas (mainly me, since my wife’s second job is on the way to her first), but these are factors I hadn’t considered with the extra job.

So instead of putting an extra $800 or so a month against debt, I’m only able to contribute about $600 a month.  That’s $150 per week, for an extra 28 hours of work.  That means that I’m making less than $5.50 per hour of work to get debt paid down.  I’m not sure that it is worth it.  Given the amount of energy it takes to hold down the second job, I know that my performance at my primary job isn’t quite what it was before the second job.

So, if you were in my situation, what would you do?  Would you keep the job, since it is decreasing my debt, even at a slow pace, or would you turn in your notice, and be done with it?

Sick Time

Ugh.  The flu season has hit full force, and today I'm home from work not feeling good at all.  Fortunately, I was off work last night and am off tonight, so I'll have some time to recover (another 16 hours or so) before I have to get back at it.  To be honest, I don't know if I'm cut out for the 70+ hour work weeks, so we'll see how long the second job lasts.  We are really making such good progress even without the two second jobs that it wouldn't disappoint me too much to see at least one of them go.  On the other hand, if we can get out of credit card debt this year (or by first quarter of '09), I'm sure the extra effort will be worth it.

I have been trying to sleep most of the day (and all last evening and night), which has put a damper on debt reduction this week, and my wife's been working enough that getting by the bank has been difficult, so this week's update may end up being a fairly small one.  However, I get paid at Wal-mart this week, so there will be some extra for next week.