pay off my credit card debt

I was prepared to do this the “right” way. Have a budget, meet the budget, pay off a little bit of each card every month, try to reduce the interest and fees and whittle away at the principle in a steadfast manner.

Not to say that what’s happening now is wrong, but it doesn’t feel as virtuous.

A family member moved in with me, and the goal is to renovate the basement into a semi-autonomous living space in a short period of time. So we can stop tripping over one another, and so he can pay me rent.

The interest rates are really low, too. So I called my mortgage guy to see about taking some money out of the mortgage in a refinance.

Turns out I qualify for HARP. Which is funny, since I’m not underwater. Anyway, the fees and hoops are much lower if I do a streamlined refi, but, no money out. And since I don’t need an absurd amount of cash to do the renovation, he suggested a home equity credit line.

I’m waiting on it, but I was pre-approved and everything should go through. I hope.

That money has a super-low interest rate on it, and I’ll be using it to insulate the walls, get some electrical done, pay for materials and maybe even the labor for the renovation. I asked for more than I need, so that if necessary?

I could wipe out the credit card debt.

I’ve written a lot about balances, cards, interest rates, big expenses…

But if I’m going to tell the story of getting out of credit card debt, I really need to tell the story of my relationship with The Budget.

Capitalized. It is that important to my way of life.

I use Mint to keep track of my accounts, transactions, trends and in general, consolidate the information that is scattered all over my mind and desk and life. I use its Budget feature obsessively; I live and die by The Budget. Well, maybe not live and die, but definitely eat, shop and improve by it. What’s really great is that it’s available on my iPhone – I can see how I’m doing on The Budget while I’m considering a purchase. Of course, I check it every day, several times a day – so I’m not even considering a purchase with it out of my mind.

I budget the expenses I feel like I can control. Auto insurance is not in The Budget. Neither is the phone bill, electrical bill, taxes, fees, auto maintenance or the mortgage. Just about everything else is.

I budget home improvement. I could run out right now and buy the supplies for half a dozen projects on the house, but I wouldn’t get them done – I’d just have the materials. Budgeting this means I don’t buy things until I’m ready to use them and will get it done. This month I’m way over on the home improvement budget, because I finally got the bathroom renovation done, and there were some expenses I didn’t foresee…but I didn’t buy anything for something other than the bathroom, and am not ready to start the next project. I think it also forces me to space out the home improvement projects, think through them carefully, and not burn out on my fixer-upper.

I also budget shopping and hobbies. These are easy ones to go over on, and also the easiest to save money on. I don’t know about you, but I have a stash of stamps and paper and yarn and fabric big enough to work on for months, if not years. This is the rainy day I’ve been stashing for – not a time when I’d have free time to do a lot of knitting or crafting, but a time when I’d be doing more than I could afford to re-supply. I spend most of this budget on consumables and things that wear out – and again, projects that are actually getting done.

The food, coffee and restaurant budgets are the ones I struggle with a lot. I firmly believe that going cheap on food leads to poor nutrition, mental state, and being overweight. I have enough problems with that as it is! So I focus a lot on eating well, but eating well at home. I spend a lot of money on produce at farmers’ market, fish when it looks good, and coffee. Starbucks is my splurge; I go at least 4 or 5 times a week. But I don’t eat out more than $20 a month – usually when I have no other choice, like on a road trip or when I didn’t have time to pack a bag lunch or leftovers.

Fuel is another budget I struggle with – I don’t let it keep me from going places with friends or family – but I do consider it when I’m thinking of going to pick up a CL find, or check out yardsales, or other gratuitous trips that tend to be trips to spend money I don’t have on things I don’t need. The fuel budget lets me remember that the cost of an item is not just in its purchase price, and lets me feel virtuous for staying in rather than like a lump.

I roll-over my Pet budget month to month. Vet bills can get out of hand, so most months, I’m way under budget since I’m spending on food, treats, classes and toys. I try to keep the toy budget under control, but again – I don’t scrimp on food. Or classes – a good obedience class is worth its weight in gold. But the budget at least lets me keep track of what and how much I’m spending on the animals, order medications when I’m under, and spread out of the vet bills.

My cash budget is where I “balance” all of these budgets. I use it for more coffee than $25/month. I pay for a lot of my farmers’ market purchases in cash…especially the “want” not “need” items like chevre, drinkable yogurt or a croissant. Sometimes I’ll recategorize a cash withdrawal as “food” or “coffee” or “shopping,” the same way I’ll recategorize part of a credit card payment as “cash” if someone is reimbursing me for picking something up for them.

All in all, I spend about $1000 on my budgets. Like I said before, the distinctions are rather artificial – since I don’t include car maintenance, or gifts, or some other random things. And I usually go over on the total budget every month.

But in general, having my budget makes me spend consciously. It lets me feel responsible for every time money goes out, and in control. I get to feel virtuous for living within my means, and rewarded, since my debt balance is dropping. I still get to use my credit cards, I still get to spend on myself in tiny ways.

And it’s a good thing, since this budget? Is here to stay.

I’ve been watching the my balance continue to trend steadily downward. It’s progress. I’m somewhere between 1/3 and 1/2 paid off. I allowed myself a mini-shopping spree for new clothes and shoes – I had no clothes that fit and weren’t threadbare, and my feet were starting to give me trouble again, obviously not getting enough support.

It was a little treat, right around the time I reached 1/3.

The good news is that I received another 12 month 0% APR offer, and when I took it, the balance…the balance was enough that I could put my entire debt load on it, if I wanted. I think this is good news. I’m not going to do that – I still have a few months 0% on at least one card – but I am going to transfer some, and work on another, and hopefully, this’ll be the last one I need. Because my trendline says I should have this paid off by May of next year, and even if I miss that deadline, I should be able to make August.

Right? RIGHT??

Despite the roof work, and the bathroom remodel, my debt is going down. I am in less debt than I’ve been since late last summer. Wahoo!!! Thanks gov’t!

Yes, I’m using almost my entire refund to pay off a card. I still have 2 months of 0% APR, but have enough stashed away to pay it off by then. I’m just holding on to that cash, earning interest, in case some emergency comes up. Though, I still should have a solid $1k in the bank even when it is paid off. After that, I’ll only have 1 maxed out card left.

The expensive part of the bathroom is coming up, and I’m nervous. Mom and Dad paid for the shower pan, the vanity and sink, the faucets and shower fixtures…dad found the tile and bought a bunch of the raw materials…and we split the price of the electrician and plumber. Now is my part: priming, painting, decorative fixtures and accessories. Some of these things can wait, some can’t.

Something must be rebounding in my credit score. I got an offer for a new 0% for 12 months card that I may take. I don’t like it, but it seems to be working. I may wait and see if I get a few more like that…for all I know, these people will give me a $200 limit! But at least I’m being offered free credit again.

There’s a light…

...when you open the refrigerator door.

With the beginning of the year, I had new hope. I got a raise…not a big one, but enough…and my mortgage payment went down because my escrow was now correct.

I’m down to 2 cards, both more or less maxed out. I applied for a third 0% APR card to use while paying those off, and was denied. Maybe because I have too much debt, maybe because no one is actually making any money off of me. Either way, it was a huge blow. I thought my credit was good, and obviously, it’s not.

With the bathroom remodel (see other goals), things are not going to get better fast.

But there’s good news. Filed my taxes last week, and saw my state refund yesterday. I love how fast this stuff goes when you do it early! Used that to pay off the little bit left on the Discover, and waiting for a big federal refund. I’ll use that to finance some parts of the bathroom, and pay off a chunk of the next card.

Then we’ll see whether it’s time to get another 0% card, or just start using whatever I have that has the lowest percentage.

1 card paid off…right before the interest rate kicked in. Yay!

But, I had to buy shingles a few weeks ago, and since they didn’t take Discover, I had to put in on a Mastercard. That I used to pay off every month. So, instead of being down to 2, I’m down to 3.

The good news is that I have a new roof, new insulation, and repaired gutters. Bad news is that I’m in more debt.

I’m going to transfer the MC to the Discover card, since that one has 0% on balance transfers until August or so. It’ll cost about $100, but save me more than that in interest. I hope. Then, pay off the Discover purchase, pay off the other MC, and pay off the Discover transfers.

Just not sure what I’ll be using to pay for day to day expenses through all of this. The correct answer in the 0% MC, but it’s within $500 of the limit right now…which is not a happy place.

So…time to get another 0% card, transfer the first MC balance, use that for living expenses and pay off the other 2? Does this sound like a reasonable plan? D’oh.

It’s been a year since the break-in and the start of the plumbing disasters. Life has been hard this year, but I think better. I quit my second job, got a dog, got debt.

I’m actually up to 3 credit cards at this point…but did I mention there’s a plan? They are all 0%APR right now. That expires for the first one in November…and I will have paid it off that very month. The next one expires in February, and the one after that, in April or May. Falling into this whole only took 2-3 days…getting out will take the better part of 2 years. I’m hoping I don’t have to get any other 0%APR cards…I don’t like the juggling and having to think about how close this one is or which one am I paying off? But I’m making it work for me.

The universe laughs at my silly little plans.

Last night the hot water heater burst. Gallons of scalding water going right down the drain. Turned off the water and the power to the unit.

No way I’ll get done with this for less than $800, though…and likely more.

And until it’s done, I’m losing sleep because I have to get up an hour earlier, drag my ass to the University gym, and shower there. Way less pleasant than going straight from bed.

I was debt free for years…until I bought the house. Even then, I paid off my MC every month, stayed on a budget, saved money for improvements.

Then I had the week from hell, when I found out I needed a root canal, had all my worldly possessions stolen in a break-in, and had all my plumbing…backup.

The root canal was mostly covered by insurance, but it took months to get reimbursed. Insurance paid for all but $500 of the items stolen.

The plumbing was a combo of a very bad plug (probably inherited from previous owners) and roots in the main stack. I ended up having to have half my basement jackhammered up and all the pipes in there replaced. I actually got lucky…they were able to save the hot water heater and didn’t have to dig up the yard.

But the bill was in excess of $5000. That, plus the new security system, means that for the first time in my life, I’m carrying debt. Currently on a 0%APR card. I was trying to get it paid off by the end of the year, but it’s just not going to happen…I’m on a budget, and doing well…until there’s an emergency.

Current plan is to get another 0%APR card, pay this one off before the interest kicks in in December while racking daily expenses up on that one…and buy myself some more time. Hopefully in those 12 months I’ll see another raise and a decrease in my mortgage payments. Because, oh yes, this whole thing was exacerbated by the mortgage company making a mistake in estimating my property taxes and a negative escrow, which I’m currently paying off…as well as the newer, higher escrow payments.

It’s a plan, right? Dino, no more injuries. Mommy can only pay for one veterinary surgery a year.