get out of debt

I swear, nothing feels better than chopping up a paid off credit card.

Christmas has come and gone and Shawn went a bit nuts. With no bonus this year and buying a new car we’ve backslid a bit. BUT, we just consolidated more or less everything on to two very low interest cards. It makes it a lot easier to see how much we’re paying and how much we owe. Also, the lower overall payments make it easier to pay more than the minimum, which we’d been stuck doing for a while now.

I’ve taken up couponing as a hobby, and that’s helping with the groceries (probably our biggest money sink, foodies as we are), leaving us more to put into paying off. Also, I’ve been shopping the sales, more or less only buying stuff on sale, groceries, craft items, entertainment, etc – and doing a lot of trading (MovieStop, GameStop, PaperbackSwap, etc) instead of just going to Best Buy or Borders and putting it on a credit card.

It may not seem like much but I figure every $1 adds up.

April this year we paid of a good deal of our credit cards, and then a family emergency had us bring them back up a bit.

Right now, including loans (student and computer), our total debt is: $7689.64. Only $1874.76 of that is credit-card related.

Woot – progress! Overall, we’re over halfway down.

Instead of paying double the monthly on all the credit card debts, now we’re going to try paying the minimum on all but one, and work on that one aggressively, then go down the list one at a time. That will eliminate the tempation of using them (as interest will take up most of the minimum), and give us a clear path, with small achievable goals—constant progress is a good motivator! I have an extremely high-interest card I’d love to get rid of, but as that’s the highest balance, better to start small and get the ball rolling.

Baring any blowups (car problems, family emergency, etc), or windfalls, that would get about 3 a year—excepting this year, which will be five total because of the two we already paid, and the fact that we’re starting with the smallest balances, so knocking off another three should be feasible.

Now, that’s counting paying the same amount per month and all of them maxed, which is likely underestimating things (as income should increase and bills should decrease as we pay things off), but still, it’s a plan.

We’ll cancel a few. Either because we’ll never use them again, because they have a yearly fee, or because insanely high interest rates that are just evil. I’d worry about temptation on the rest, but really, once we’re debt free, we’ll have so much extra money per month it’ll be insane (currently our payments are more than our rent!) and we shouldn’t ever need them again. Especially with putting money in savings at the same time.

Fingers crossed… We’ve been at this for so long.

Our excuse for not chopping up the credit cards is “what if there’s an emergency?”, so that would argue for concentrating money towards savings. So that if there were an emergency, we wouldn’t have to rely on credit cards to deal with it.

BUT. If we paid off the credit cards, we’d have much more money to devote to savings each month.

Argh.

In April, so far, we’ve paid off the rest of Shawn’s computer loan, and our old Fingerhut bill. 2 bills down, 12 to go. Sigh. Next will be my old Capital One. I’ve paid this one off twice before, but then we always “need” it for something.

We’re in way too much debt for people who don’t have anything of real financial value. We always pay more than the minimum but have an awful habit of just respending what we pay. TSK!