So I have three primary goals:
- get out of debt
- get in shape
- build some new marketable skills so I don’t feel trapped in my job and so I have something I can make money with if I get desperate and want to change careers.
For this post I’ll focus on my get out of debt goal, and break it down a bit. I’ll do my debt story in a future post.
My fiance and I have combined finances. I know some experts do not recommend this before marriage, but he and I both feel totally secure with it. It also improved our relationship because we don’t argue about money anymore. I’ll go into detail about how we got there and our specific arrangements/agreements in another future post.
Our debt falls into a few categories:
- Credit cards (both of us) – ~$28,000
- Student loan (me) ~$12,000
- Car loans (both of us) ~$10,000
- Bad debt in collections (him) ~ $8,200 (but we’ll probably settle the debt for a little more than half that)
- IRS (him) $2000
So that’s a nice ugly $60,000 in debt there!
The credit cards are the ones that are really on fire because the interest rates are all over the place, but they’re all high, and even if they weren’t, I still wouldn’t want to have them. The plan is to pay credit cards off first, IRS is on a payment plan already, pay off all the debt in good standing and then settle the collections crap along the way. The past two years were spent dealing with fiance Gogig’s financial “emergencies” so we agreed the next year or two would be about taking care of stuff that is in my name since I covered the majority of both of our expenses for a while prior, and a good chunk of the credit card debt anyway is from spending on both of us, not just my stuff.
Since credit cards are the first goal, I’ll break them down:
- Discovercard ~$1250 – pay off in February 2014.
- Banana Republic Visa ~$5900 – pay off in May 2014.
- CapitalOne ~$5800 – pay off in November 2014.
- Citicard ~$10,000 – pay off in February 2015.
I have a budget spreadsheet and basically the plan is to throw all extra money at this debt until it’s paid off. Some money that doesn’t go to living expenses will be put into savings for an emergency fund and also for some planned future expenses like pet stuff, kid stuff, holiday stuff, birthdays, car registrations, etc.
I’m also expecting a small raise and bonus in June this year (2014), with the possibility of instead getting a promotion and significant raise which may speed up my timelines. So fingers crossed for that.
I tell you, I just can’t wait for February 1 to roll around – it’s pay day and it’s the day I’m going to pay off that Discovercard. I CAN’T WAIT. I hate it! I want it gone and out of my life!!